As the Canadian government makes overtures to U.S. cell phone provider Verizon to enter the Canadian market, there has been much debate about what sort of welcome the company should receive.
Its Canadian counterparts have launched a campaign against the move, while customers seem to feel more competition would mean lower prices. Public polling and a new study weighed in on the issue on Monday.
The consensus solution seems to be one that your average kindergartener could have come up with: treat everyone the same.
Both the public survey poll, conducted by Forum Research, and a report from the Fraser Institute are in favour of allowing competition in from the U.S., specifically if are not given an advantage over Canada's Big Three — Rogers, Bell and Telus.
The Globe and Mail reports that 57 per cent of those polled want foreign wireless companies to expand into Canada, with an even higher number believing such an expansion would drive down cell phone prices.
In the same poll, 65 per cent felt it was important that those companies played by the same rules as their Canadian competitors.
The U.S. carrier Verizon is considering an entry into Canada, possibly by buying small carriers and buying spectrum — the frequencies by which wireless information is transmitted. Spectrum is limited (consider stations on FM radio), and the more spectrum a carrier has the better the service it can provide.
Ottawa is currently planning on placing restrictions on telecom companies currently operating in Canada, by limiting the amount of spectrum they can bid on at an upcoming auction.
The Fraser Institute says giving Verizon an unfair advantage at the auction would be just as unfair as blocking them from entering the market.
"The goal of achieving and maintaining a competitive market is not the same as having a minimum number of competing firms," study author Steven Globerman said.
"By setting up rules that handicap the three large Canadian telecoms and favour small or new players in the marketplace, the federal government is effectively subsidizing new entrants and promoting inefficient competition."
The study further states that adding a fourth competitor to the Canadian telecom industry would not guarantee a more competitive market or lower prices, but removing foreign ownership rules could.
[ Pulse of Canada: Would you support Verizon in the Canadian market? ]
Industry rules currently prohibit a foreign company from buying a Canadian firm that controls more than 10 per cent of the market. Globerman says the threat of takeover would force the Big Three to find ways to offer better pricing and service.
What both the public poll and the Fraser Institute study seem to agree on is that all companies should be treated equally.
Yahoo! Canada News recently asked Canadians whether they approve of an American company entering the telecom industry and the response was overwhelmingly in favour of open competition.
It seems inevitable that the doors will open for Verizon. The only question is what type of seat it will receive at the table.
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