Op-ed by Georg Serentschy
As a former regulator and Chair of The Body of European Regulators for Electronic Communications, I believe Canada’s current dispute over wholesale FTTP access is a pivotal moment for its regulatory framework and Canadian consumers. To summarize what is at stake: On August 13, 2024, the CRTC issued its final decision, affirming that carriers such as TELUS, Rogers, and Bell have to sell wholesale, end-to-end access to smaller players and one another, so long as any large player is only trying to access a competitor’s network outside their own incumbent territories. The goal is to foster competition and consumer choice irrespective of which specific business owns the cables to a particular house. This balanced framework has strong support from the Competition Bureau and consumer advocates as essential for competitive dynamics and investment. In November 2024 however, the federal Cabinet intervened, ordering the CRTC to reconsider and potentially restrict TELUS, Bell, and Rogers from using the wholesale access regime, even outside their territories. Regardless of the merits of restricting competition in this way, this government intervention undermines the CRTC’s independence, creates confusion in the marketplace, and raises concerns about the predictability of regulation and the long-term stability of the Canadian telecommunications industry. Uncertainty about regulatory roles erodes investment, reduces consumer welfare, and ultimately harms Canadians through higher prices and diminished service quality. Whether one believes there is too much or too little telecommunications regulation, unpredictable political regulation is worse than either, and the CRTC should therefore carefully guard its independence.
Unlike Canada, the EU Parliament has taken measures to safeguard the independence of telecom regulators, and for good reason. In the past, there have been several highly questionable examples of political interference in telecommunications regulation. These range from drastic measures, such as dismissing the head of a regulatory authority who did not comply with the government’s “wishes,” to more subtle tactics, such as merging authorities into a new entity with management chosen for their obedience. Even in highly developed democratic systems, agency heads may face implicit pressure when their contract expire, with governments subtly reminding them that an extension depends on the government’s goodwill.
The independence of regulatory authorities can be safeguarded by, for example, providing the head of the regulatory agency a long, non-renewable term of 10–12 years. There are also better approaches for selecting the agency head, such as appointment by parliament after a successful hearing. This would reduce the potential for undue influence of individual parties or a minister.
This need for independence is why the provisions of EU law (European Electronic Communications Code – EECC) were strengthened. The EECC stipulates that regulators must be independent in two dimensions. First, they must be structurally independent, with no conflicts of interest, operating separately and autonomously from the telecommunications providers. Second, they must act independently, taking instructions only from a legally authorized appeal body, typically an independent court.
Another strong argument for the independence of regulatory authorities is the difference in time horizons. Governments often think in the short term, driven by election cycles, whereas regulating digital infrastructures and the businesses they support requires a long-term perspective of 10 years or more. This disjunct between the two sets of priorities becomes even more stark in an election year when political incentives may weigh headlines in the next 6 months far more heavily than the effect of regulation in only a few years time. Regulatory stability and predictability are indispensable for consumer welfare and a country’s attractiveness for long-term infrastructure investments. The absence of these conditions is directly detrimental to consumers and the broader economy.
The clear lesson from the EU is that the regulator’s independence is essential for consumer welfare, regulatory stability, and investment security. A situation such as in Canada, where a government refers an independent agency’s decision back to the agency for “reconsideration” until it fits the government’s tactical political calculus, is incompatible with a developed democratic system based on checks and balances. Both consumers and the industry must trust that regulator’s decisions are shielded from political interference.
Regulatory stability and security must extend beyond the term of any government. While governments and political parties think and act in cycles of a few years, investors require long-term security for over a decade. Otherwise, investments in digital infrastructure would never pay off, and therefore simply won’t happen. This would be devastating for both consumers and the country’s economic future. The CRTC should guard its independence.
Dr. Georg Serentschy is a former regulator in Austria and Chairman of BEREC. He advises organizations and companies in the digital sector on strategic matters and global risks through the lens of geopolitics. His advisory work focuses on the resilience and security of digital systems, regulation & competition, spectrum policies, cybersecurity policies, quantum technologies, and innovation.
