Timothy M. Denton

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Once more into the breach, dear Sisyphus!

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The bankers and creditors of Mobilicity are trying to decide what terms to accept from one or another of Canada's large carriers for the assets of the company. How often must this happen before Canadian governments, Conservative or Liberal or NDP (gasp!), give up the failed idea of competition through multiple carriers? I call this the Marxist fetishization of objects.

First, the government licences some competition to Rogers, Telus, and Bell, who each received their licences back in 1985. Then, as the smaller carriers fail, they are bought out and the spectrum they held is transferred to the larger incumbent or reserved by government for some new enthusiast to come in. How many cycles of this failure to introduce more competition have we gone through now? Two? One and a half?

As I have argued elsewhere, this is a pre-Internet idea of competition. A group of silos seek to hold the customer and to exchange traffic as sparingly as possible, so that revenue is conserved within the silo. To achieve this policy of building out infrastructure, at the expense of interconnection, the government lightly - that is to say, ineffectively - regulates roaming rates and does not embark on a policy of actively establishing MVNOs, which constitute competition on the basis of leasing equipment from a larger carrier and offering a "virtual", that is to say, internet-based customer-facing platform. This is what a Canadian company, Tucows,  does in the United States on the basis of Sprint's facilities.

The most recent decision in mobile services, Telecom regulatory Policy 2015-177, nearly crossed the entire stream, going from one stepping stone to another, supporting MVNOs in principle, but baulking at the last step: leaving to the potential competitor and the incumbent to negotiate their pricing.

The Commission determined that the large carriers exercized market power in wholesale roaming.

In light of the above determinations, the Commission considers that the national wireless carriers collectively have the ability and incentive to, with regard to GSM-based wholesale roaming in the national market, maintain rates and impose terms and conditions that would not prevail in a competitive market. Therefore, the Commission determines that Bell Mobility, RCP, and TCC collectively possess market power in the national market for GSM-based wholesale roaming.

It determined that:

  1. In light of the above, the Commission determines that Bell Mobility, RCP, and TCC collectively possess market power in the national market for GSM-based wholesale MVNO access.

and

the Commission determines that wholesale network access to the GSM-based networks of the national wireless carriers is a required input for competitors in the downstream retail market.

and

the Commission determines that denying competitors access to GSM-based wholesale network access services at a national level would likely result in a substantial lessening or prevention of competition in the downstream retail market.

and

the Commission determines that the GSM-based mobile wireless networks of Bell Mobility, RCP, and TCC cannot be practically and feasibly duplicated by competitors in the short to medium term.

and

the Commission determines that wholesale network access to the GSM-based mobile wireless networks of Bell Mobility, RCP, and TCC is essential for their competitors to provide broad or national network coverage to their retail customers. As such, the Commission determines that GSM-based wholesale roaming and MVNO access provided by Bell Mobility, RCP, and TCC are essential.

Yet the Commission turned down mandatory access by MVNOs. The stated reason was that

Accordingly, if the Commission were to mandate GSM-based wholesale MVNO access provided by the national wireless carriers, this permanent network access would likely discourage continued investment by wireless carriers, because they could rely on this access rather than investing in their own mobile wireless network infrastructure.

Well, given the reasoning, why should they invest in facilities? What is this fetish for facilities? To my way of thinking, facilities are just a way of getting the benefits of competition. If competition could be achieved by a more parsimonious approach to investment - more bang for the buck - then that is the approach to take.

Instead, the poverty of ideas in telecommunications always reasserts itself: facilities-based competition, ladders of investment - the panoply of repeated failure, is once again brought out to justify the superiority of building physical things rather than establishing networks through software. This is, at worst, a  Marxist fetishization of material objects.

Yes, yes, I hear your objection. There must be some physical substrate for communications. Yes, I agree, but you never seem to hear that agreement. Because what the proponents of physical networks never understand  is this: just because there is a physical substrate for networks does not mean that networks are exclusively or preponderantly composed of physical substrates.

Just because we must have highways does not mean that cars must be made by road builders.

Yet in telecommunications we confuse networks for carriers, and carriers with physical substrates. And if I call this Marxist fetishization of objects, it is because the proponents of networks = carriers = systems of physical plant need a good old-fashioned Monty Python fish-slapping to awaken them from their doctrinal slumbers.

 

 

 

 

 

 

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Timothy Denton is a lawyer by training who practices principally in telecommunications and Internet policy and domain name issues, with a strong concentration on explaining what the technology is and what it means.

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Guest Tuesday, 19 November 2019
You are here: Home Timothy Denton's Blog Once more into the breach, dear Sisyphus!