Rivalrous Behaviour vs. Competition

The CRTC’s current wholesale access proceedings have featured just about every possible variant on special pleading imaginable. All the arguments of past years have been recycled, and perhaps some new ones trotted out. This applies both to the incumbents and the independent resellers.

One of the more blatant and embarrassing arguments has been the reliance by incumbent telcos and cablecos on their heroic battle for customers to demonstrate how competitive telecommunications markets are. In particular,philip palmer in the lower mainland of British Columbia, testimony indicates that incumbents are competing by offering incentives such as PVRs and televisions as rewards for residential customers who sign up for service packages.

Just to be clear, incentives for customer switching, or drawing the few potential new customers in long-served areas into their networks are hardly signs of a competitive market: it is symptomatic of a static market where there is no significant differentiation between the products offered, and no competition on price. In a dynamic market, one would expect telecom service providers to be either offering clearly advanced products or appreciably lower prices. The evidence heard by the CRTC to date seems to indicate that neither is a factor in the current telco – cablecos rivalries in B.C. The kind of competition we see in BC is not one that results in consumer benefits: it merely shifts consumers between companies and raises long-term costs. As a by-product, it also raises the costs for new entrants – ensuring that true consumer choice remains limited.

We can only hope that the CRTC will not be mislead by the smoke generated by the mighty incumbents. Please, CRTC, look for signs of real cost-based competition.

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