The Design of Regulatory Institutions for the Canadian Telecommunications Sector

Abstract

As the result of competition arising from new technology, extensive economic regulation of the telecommunications industry has become less appropriate over time. In this article we consider corresponding institutional reform. Both the Canadian Radio-television and Telecommunications Commission (CRTC) and the Competition Bureau/Tribunal are presently involved in telecom regulation. We propose a framework in which there is a clearer division of responsibility between the CRTC and the Bureau/Tribunal. The latter would be responsible for enforcing laws against predatory pricing, price discrimination, and other standard competition policy matters in the telecom industry. Where there is concern simply about high prices, a matter that competition policy does not ordinarily address directly, we propose that the Bureau/Tribunal assume responsibility for identifying markets in which there is market power, and only then would the CRTC have the authority to regulate prices. We argue that such an arrangement would allow each agency to exploit its comparative advantage, would reduce costly duplication across agencies, and would address concerns about regulatory overreach.