Why Canada Doesn’t Need Another Broadband Provider

Canadian telecommunications policy under successive governments has taken for granted that the domestic industry suffers an inadequate supply of market participants. The operating assumption behind the so-called “fourth-player policy” has been that if government policy can catalyse more players into the broadband market (particularly mobile virtual network operators), it will lead to better outcomes for Canadian consumers.

But as Rob Atkinson explains in The Hub, this assumption is unmoored from reality on various fronts. The first is that it neglects the inherent disincentives for capital investment and the key consequences for connectivity. Although there are still Canadian households in rural and northern communities (particularly Indigenous communities) without access to high-speed internet, we have achieved pretty impressive outcomes when it comes to connectivity. Canadian broadband access is on track to meet the federal government’s broadband access goal of 96 percent of the population by 2026.

Another is the notion that current market structure is inherently uncompetitive in itself. As will be discussed in more detail below, the net profit margins for Bell, Rogers, and TELUS—the country’s three leading internet service providers (ISPs)—are between 3.7 percent and 7.7 percent, which is not indicative of a lack of competition.

Read the essay.