The theme of regulation is a central one at the Canadian Telecom Conference in Toronto, ON this week, fueled in large part by the entrance of new wireless carriers and issues of foreign ownership; but also due to convergence in the technology industry.

As several key industry folks noted during a panel discussion earlier this morning called The Regulatory Blockbuster, adjustments in foreign ownership within the telecom sector can't be accomplished without also considering the broadcasting sector as a whole. After all, convergence is upon us in full force. And aside from telecommunications being considered a part of broadcast, the Internet, TV, and mobile all intersect with one another in ways we never could have anticipated 20 years ago.

All key players agree that allowing foreign investments in the telecom sector is a good thing. Whether they like it or not, as indicated in the Honourable Industry Minister Tony Clement's keynote yesterday, the Canadian government is working toward doing just that. But the incumbent wireless carriers, Rogers, Bell and Telus, want equal rights for all, while the new carriers feel that without some sort of advantage, they'll never be able to compete effectively. It's an argument we've been knocked over the head with again and again over the past year with the Globalive/WIND Mobile and Orascom Telecom situation. But one that players feel very passionate about.

"We have no problem if you open it up," declares Ken Englehart, Senior Vice President of Regulatory & Chief Privacy Officer at Rogers Communications. "But if you're going to open it up, open it up! But then if you do it for telecom, you have to do it for cable."

This won't be happening any time soon as Clement is clear that there will not be any changes made to the Broadcasting Act in Canada. So how do we get around this?

Konrad von Finckenstein, Chair of the CRTC, proposes we adjust foreign ownership percentage to 49% from 40%. But according to Edward Antecol, Vice President, Regulatory Affairs & Carrier Services at Globalive Communications, parent to WIND Mobile, that won't attract "one iota more of foreign capital. You have to do more than tinker and tweak control numbers."

Englehart, surprisingly, agrees. But still, the incumbents feel they need to have a fair shot at foreign investments as well.

Michael Hennessy, Senior Vice President, Regulatory & Government Affairs at Telus (left):"If we are going to change the telecom act, we do it for all carriers under the telecom act. If we decide foreign ownership would help down the line, at least give us that right."

"If we are going to change the telecom act, we do it for all carriers under the telecom act," reiterates Michael Hennessy, Senior Vice President, Regulatory & Government Affairs at Telus. "If we decide foreign ownership would help down the line, at least give us that right."

Is that fair? Von Finckenstein says it is, to a degree. "Competition, as wonderful as it is, has limits," he says. "If you don't restrain competition, it will devour itself."

What's more, incumbents strike back with some unfair deals of their own: for one, setting aside spectrum in the last auction exclusively for new players.

"If we keep giving handouts to these small players," jokes Englehart, "it's like heroin. They can't live without it, and they keep wanting more."

The major sticking point for incumbents, however, is that they pay to build out high-speed networks, as they have been doing for the past decade, and are then forced to turn over portions of them to competitors. Analogies are used to best describe the situation.

"What if Air Canada buys a new fleet of jets and then the government tells them they need to reserve sections of each plane for passengers from competitor airlines," Mirko Bibic, Senior Vice President, Regulatory & Government Affairs, Bell Canada proposes. "We don't tell Air Canada to do that. What if FedEx is told they have to give space for small courier companies that want to get into the market; let them use their warehouses, their trucks. We don't do that because there's something called competition. We think it's patently wrong for incumbents to give access to their networks."

Mirko Bibic, Senior Vice President, Regulatory & Government Affairs, Bell Canada (right): "What if Air Canada buys a new fleet of jets and then the government tells them they need to reserve sections of each plane for passengers from competitor airlines. We don't tell Air Canada to do that."

Antecol persists, arguably speaking on behalf of all new carriers. "Incumbents controlled every pipe. One of the best ways to provide for businesses and consumers is to provide wholesale access."

But Antecol isn't alone in his position. Also on the panel was Chris Peirce, Chief Corporate Officer at MTS Allstream, a regional wireless carrier in Manitoba with business services across the country. "Not only does Bell say build your own damn network," he cries, "but they're also saying get all your money from Canada." He cites a recent Harris Decima survey that indicates 63% of Canadians support global investment in the telecom industry. "Canadians believe in promoting Canadian content, he clarifies, "but they don't think ownership limits are the way to do it."

In his keynote, MTS CEO Pierre Blouin echoes this sentiment, adding that while incumbents have been able to rely on investments for the past decades, MTS has been forced to rely on debt because of Canada's limits on foreign investment. While he proposes foreign ownership regulations for carriers that have fewer than 10% marketshare, he admits that he would support a change if it was for all carriers as well. "Either way, it's good for us."

Ironically, many called MTS out for speaking so vocally about the importance of competition in the market when the company did not actively participate in the last auction, putting its money where it's mouth is, so to speak. To that, Blouin says that the price was simply getting too high, and didn't fit the business case metrics of the carrier.

Greg O'Brien, Editor at Cartt.ca and Moderator of the panel, poses an interesting question: "are we getting to the point where broadband has almost become a utility?" Indeed, it seems almost to be an expectation and need in the home, not so much a luxury anymore. And if wireless is increasingly finding its way into the home as a broadband replacement, especially in rural areas, with low-consumption users, and with devices like "hubs" offered by all three incumbents, then should wireless be considered a utility as well?

"Today, the average home has seven or more digital devices," said Rob Bruce, President, Communications at Rogers Communications in yesterday's keynote address. "By 2017, there will be seven-trillion devices. Eight per cent of Canadian households have already gone strictly wireless with no landline. Customers are not waiting for anyone to show them the future."

"We are so ancient and backwards in our thinking in this country," adds Hennessy, "it's like what's going on in the rest of the world has no meaning. We're re-debating stuff that was happening 20 years ago."

Ken Englehart, Senior Vice President, Regulatory & Chief Privacy Officer, Rogers Communications: "The fact that we're having a debate is exactly why we need a blueprint. The government has to tell us what their plans are. We need to know when a spectrum auction will take place, what will be up for auction, and what the rules will be. If we had some way of planning, it would make our lives easier."

There is one point where all panelists agree, and likely the only point: whatever the decision, the industry needs one. "The fact that we're having a debate is exactly why we need a blueprint," says Rogers' Engelhart. "The government has to tell us what their plans are. We need to know when a spectrum auction will take place, what will be up for auction, and what the rules will be. If we had some way of planning, it would make our lives easier."

The Government is working on just that. We anticipate there will be another wireless spectrum auction in late 2011 or 2012, after Canada has transitioned to digital TV and the 700 MHz block is opened up, as well as the 2,500 MHz block.

If we have equal opportunities for all carriers, will it really make a difference in the end? If Rogers, for example, has the same access to capital that a Globalive or a Mobilicity has, which company will a foreign investor want to support? But on the other hand, if we favour new carriers, allowing them to utilize incumbent networks without incurring any of the risk involved in building them, and eventually cutting into the incumbent carrier's profits as they grow, is this right?

The Government surely has its hands full on the issue, but Clement assures that they are focusing on finding a solution that will meet the need of both sides.

Panel (l-r): Greg O'Brien, Editor, Cartt.ca & Moderator; John Lawford, Counsel, PIAC; Ken Englehart, Senior Vice President, Regulatory & Chief Privacy Officer, Rogers Communications; Chris Peirce, Chief Corporate Officer, MTS Allstream; Michael Hennessy, Senior Vice President, Regulatory & Government Affairs, Telus; Edward Antecol, Vice President, Regulatory Affairs & Carrier Services, Globalive Communications; and Mirko Bibic, Senior Vice President, Regulatory & Government Affairs, Bell Canada.

Article Tags:  foreign, carriers, telecom, incumbents, government, canada, wireless, ownership, regulatory, rogers, auction, carrier, communications, competition, canadian, networks, spectrum, englehart, antecol, clement, investments, mobile, incumbent, globalive