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HomePolicy Articles Article Summary

Dynamic Competition in Telecommunications: Implications for Regulatory Policy

Commentary by Neil Quigley

Neil Quigley begins his report by noting that in recent years the Canadian Radio-television and Telecommunications Commission (CRTC) has adopted a range of policy initiatives designed to: a) promote the entry of new firms into the business of providing wireline local access telephone services; and, b) increase the number of viable competitors in that market. Quigley supports the CRTC’s own assessment that despite its efforts, competition on these fronts is limited in the largest urban centres – and virtually nonexistent outside them.

In this report Quigley looks at the policies the CRTC has adopted, and their implications for competition in the provision of wireline local access services. He considers the importance of technological change as a driver of competition in telecommunications, and the implications of regulatory restrictions on retail prices for investment in, and entry to, the wireline local access business.

Quigley argues that where technical change provides a credible threat to a network that is already in place, high levels of competition and substantial benefits to consumers do not, in fact, require that numerous competing providers operate in the market. He argues that investment in new technologies and services that allow a firm to compete with existing technologies may provide greater benefits. He concludes that policies designed to promote entry using the current facilities and technology will reduce incentives to invest in new technologies, which will limit long-term benefits.

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Policy Publication Details

Author(s): Neil Quigley;
Publisher: C.D. Howe Institute [ Visit Website ]
Year Published: 2004 ; Publisher Type: Research Institute
Publicly Available: Yes Research Focus: National;
Registration Required: No Language: English
Payment Required: No Publication Format: Adobe PDF

Subjects / Categories:

Policy Articles / Media & Communications / Telecommunications
Policy Articles / Media & Communications / Regulations
Policy Articles / Media & Communications / Regulations / 2004
Policy Articles / Media & Communications / Telecommunications / 2004
Policy Articles / Media & Communications

Keywords / Tags:

Canadian Radio-television and Telecommunications Commission; wireline local access services; market competition; new technologies;