Policy and Regulatory Trends in Canada: What it means for IT and network managers

Last week in Toronto at the Canadian Telecom Summit conference, I participated in a panel discussion on the regulatory and policy direction in our industry in Canada.

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I know this subject is probably not the first – or the last! – thing on an IT professional’s mind when you’re arriving at work for another day of impossible demands. But as our panel explored different viewspoints that were often very far apart, it occurred to me that the resolution of our debates underway today in Canada have the potential for far-reaching impact on how you do your job – and whether you’ll succeed or fail.

The heart of the matter, in my view, comes down to how regulation and policy either promote – or detract – from competition in Canada. Competition is the biggest driver of investment and innovation in our industry — the force that leads to better, more cost-effective networking services delivered faster to Canadian businesses. The more competition the better. And I’ll bet that more competition is something all IT and network managers would like in choosing among the service providers they want to do business with.

When I evaluate the regulatory environment in Canada today and how it’s shaping competition looking ahead, there is room for optimism.

Today our federal government recognizes the need to increase investment and competition in our industry. The recent federal budget included legislative changes for lifting foreign investment restrictions on competitive service providers, perhaps as soon as this month.  And when that happens, competitive Canadian providers will more easily be able to tap into global pools of capital outside Canada to invest in their networks and, in the end, create more competition: all of which is good for IT professionals managing networks that are critical to their business every which way.

It’s fair for you to question the urgency of this change in policy direction. But the urgency is real. In the digital and information age, networks are vital to our economic growth in Canada. They’re critical to the life of every business, and to the standard of living we, as Canadians, aspire to.  But competitive networks – in Canada – have for decades been starved of investment. We were operating with rules that basically prevented providers like Allstream from going to international markets for new capital to invest in competing networks.

It’s no great secret that telecom is a very capital intensive business.  Despite the billions invested in the Allstream network to date, we must keep investing more each year. And thanks to the recent decision of the federal government, we and other competitor Canadian providers will now finally have the flexibility and freedom to access more capital internationally.

That’s good news for all Canadian businesses – and there’s more to come, I hope. We are confident that, in support of creating a stronger, more competitive telecom industry, the government and regulator will move fast to provide mandated wholesale access to Ethernet access and transport facilities operated by incumbent telcos, which is long overdue.

Why overdue? Ethernet is the native protocol of the 21st century fibre network – the proverbial local loop for enabling new and innovative business services in all those new areas that IT managers are exploring today – like cloud, big data, virtualization, convergence, mobility, business continuity, security and others. By mandating access to wholesale Ethernet over the so-called last mile, we will get these services to market faster, and generate even more innovation. That, too, is great for Canadian businesses and productivity.

In my reading of international trends, the idea that new or alternative competitive providers can – or should – duplicate the local Ethernet loop already built by incumbents, has been discredited. The government, I believe, understands this. That’s an exciting proposition for all Canadians. What happens remains to be seen. But things are definitely moving in the right direction and our government should, again, be congratulated for that.

While policy and regulation are never going to be top of mind with most IT professionals who have networks to operate and optimize, I believe we all know the value of more competition among service providers. In an industry like telecom which for so long was a regulated monopoly, the fact is that policy and regulation have a very real impact on the choice you as a customer have in services and in providers.


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