© David Micalef - 2019

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The Canadian government used to heavily regulate telecom. Due to inefficiencies, the Canadian government was convinced to sell the network to private interests. The current telecom system is based on spectrum management, which means companies can lease frequencies but must own their own infrastructure. For new companies to enter the telecom market, they must either build their own infrastructure, which is prohibitively expensive, or lease infrastructure from the existing companies, which puts them at a competitive disadvantage. In addition, companies backed by foreign funding are prohibited.

Due to these hurdles, competition is fairly limited, allowing telecom companies to charge outrageous rates for their services. Canada has the highest telecom rates in the modern world. What can be done to reduce telecom rates? The monopolies of the telecom oligarchs must be broken up by implementing a free and competitive market. The solution is a mix of private and public.

I propose the following:

  1. A collaborative effort between the federal government, academia, and private industry to establish a modern and efficient access network framework;

  2. A collaborative effort between the federal government, provincial governments, academia, and private industry to establish a standard across Canada. Allow local governments to implement their own standard if it suits their needs better;

  3. Local governments will provide a plan and feasibility study for underground telecom;

  4. Allow creation of local city bonds for funding purposes;

  5. Local government will hire federally certified private companies that could build the access networks;

  6. Local governments will hire a private company to operate the access network; and

  7. Allow private companies to compete in providing service.

The argument against foreign companies participating was due to the fear of gaining control of Canadian telecom but since the infrastructure is nationalized - this would no longer be an issue.

While there would be a significant capital cost to this transition, it is unwise to not plan for infrastructure upgrades on an ongoing basis. In addition, by allowing the telecom industry to operate on the principles of a free market, the cost to consumers will be significantly reduced. This will drive innovation and affordability.