Forcing telecom companies to share their networks is unfair

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A news item earlier this month showed that Bell and Quebecor have some interests in common, despite the often fierce competition that prevails between the rivals. Notably, the two companies favour regulatory and public policies that encourage the owners of telecom infrastructure to continue to make massive investments in their networks.

Bell and Quebecor are absolutely correct to denounce the notion promulgated by some according to which the owners of private telecom infrastructure should be forced to make their networks available to competitors. Such mandates fly in the face of general ethical and philosophical principles, as well as practical considerations related to economic logic.

In general, Canadian consumers would be better served by telecommunications policy based on the market and unfettered competition rather than policy characterized by government interference. More specifically, as the MEI has shown many times in its publications (themselves grounded in major research studies), public policies forcing big telecom companies to share their networks with their competitors at regulated rates are counterproductive and risk leading to a slowdown in infrastructure investments, whereas this is the exact opposite of what consumers need.

Indeed, why on earth would a company constantly invest considerable sums of money in the development and maintenance of its network if any competitor can then seize the benefits of that network under unacceptable conditions unilaterally imposed by government? Would the ant work so hard if it were forced to share the fruits of its labour with the grasshopper?

But there is also a moral argument to consider: Such a policy is no more nor less than a violation of the principle of respect for private property. No one would ever consider requiring one supermarket chain to rent its space and its shelves to a competing chain, or forcing one gym to share its sports equipment with another, or mandating that one farm welcome onto its fields a rival farm.

Let’s recall: Bell Canada in the eastern part of the country, and Telus (or its predecessors) in the west, enjoyed their respective monopolies at a certain point in time, when the first copper wire networks (essentially obsolete today) were being built. It was thus justified in that context, which had become too favourable for the companies, for the government to open up these regions to competition by taking an active hand in matters.

But this is now ancient history. These telecom companies’ new mobile and optic fibre networks, and even more so those of Quebecor, were built using private capital, by private companies, in an altogether competitive context. Allowing their competitors to access those networks as they please constitutes a plundering of the investments of their shareholders in their networks. It is therefore, for this reason, immoral.

Respect for private property goes hand in hand with economic development, as the history of the 20th century has decisively proven.

Michel Kelly-Gagnon is President and CEO of the MEI. The views reflected in this op-ed are his own.

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