Speaking Notes for Sheridan Scott Commissioner of Competition

Competition Bureau

55th Antitrust Law Spring Meeting Telecommunications: What's Next? Where Will We Be in Five Years?

April 18, 2007

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This paper addresses a number of current and emerging issues involving antitrust enforcement in the telecommunications sector in Canada. It begins with a brief overview of the Canadian telecom industry and some of the key recent developments affecting the sector. It then turns to some specific antitrust issues involving the sector, discussing the approach that the Competition Bureau (the “Bureau”) would take in addressing these issues in Canada. These include market definition, barriers and issues involving foreign ownership and trade.

Recent Developments in the Canadian Telecom Sector

As elsewhere, the Canadian telecommunications sector has undergone a profound transformation in recent years. This has been characterized by, among other things, increasing competition, industry consolidation, price wars, and the introduction, growth and bundling of products and services. Numerous companies have both entered and exited the market during that time.

The Canadian Radio-television and Telecommunications Commission (“CRTC”) compiles annual monitoring reports that summarize competitive developments in Canada. The Canadian telecommunications services market had estimated revenues in 2005 of $34.5 billion, an increase of $1.2 billion or 3.5% over 2004.¹  The CRTC estimates that competitive service providers accounted for 35%, or $12.2 billion, of the total revenue in 2005. These competitors include the incumbent telephone companies' out-of-territory activities, accounting for 11%; facilities-based competitors that have 19%; and, resellers with the remaining 5%.

The competitive environment in Canada benefits from very high cable penetration rates, with 95% of Canadian households being located in a cable broadcast distribution undertaking (BDU) serving area. Furthermore, 89% of households are in areas served by cable BDUs that can provide broadband services.²  This has resulted in 64% of Canadian households having Internet access and 51% subscribing to high speed Internet. The major cable BDUs have 54% of these subscribers. As in the United States, cable is now expanding rapidly into cable telephony. A recent report by Moody's Investors Services predicts that Canadian cable companies will expand their current customer base by 52%, to 2.2 million phone subscribers, in 2007.

These new competitive pressures have prompted Canadian legislators and the CRTC to re-examine Canada's current regulatory environment. There have been a number of significant developments on both fronts in the last 18 months.

In the policy area, in April 2005 the federal government appointed a panel of Canadian experts to undertake a comprehensive review of Canada's telecommunications policy framework. The Telecommunications Policy Review Panel issued its final report in March, 2006. Underlying the Panel's 127 recommendations was the fundamental conclusion that Canada's telecommunications markets have now evolved to a point that justifies replacing the current legislative presumption that favours regulation with one that favours reliance on market forces. While it recognized that there would be an ongoing need for regulation in certain specific circumstances, the Panel concluded “the legislative framework should specify the circumstances in which regulation is still warranted and that it should provide clear direction on the use of regulatory powers so regulation does not unnecessarily impede the development of market forces.”³  In November, 2006, the Minister of Industry adopted one of the Panel's key recommendations and formally directed the CRTC to adopt a policy of placing greater reliance on market forces whenever possible when making decisions.

On the regulatory front, the CRTC undertook a complex review of the conditions necessary for forbearance from regulating retail local exchange services . In its decision, the CRTC adopted a 25% market share loss test, in combination with a requirement to meet a number of quality of service indicators, before it would forbear from continued regulation of incumbent service providers. It also adopted a geographic market that was a based on “a social and economic community of interest, where customers have common expectations of service and pricing, should be administratively practical, competitively neutral, and should have well-defined, stable boundaries.”⁴  The Local Forbearance Regions (LFRs) that were subsequently defined coincide generally with the census metropolitan areas (CMAs) defined by Statistics Canada, with an extension into economic regions adjacent to the CMA where there is a level of economic and social integration between the immediate surrounding area and the CMA.

The CRTC's decision was appealed to the executive branch of Government by a number of parties to the proceeding. At the end of 2006, the executive branch, under its power in the Canadian Telecommunications Act⁵ to review and vary a decision of the regulator, proposed an order that would vary the CRTC's decision by changing the criteria for forbearance and removing certain regulatory measures.⁶  The proposed order to vary the decision was published for public comment in December 2006 but as of February 2007, it is not yet in force. The proposed order would replace the market share loss test with three alternative tests. Two of these tests are based on the number of facilities-based competitors in the market. In the case of residential services, three independent facilities-based competitors would be required. In the case of business, two facilities-based competitors would have to have a presence in the market. The third test is one proposed by the Competition Bureau during the course of the CRTC proceedings. The latter would require that a streamlined market power analysis be conducted to determine if the existing or potential competition is sufficient to prevent the exercise of market power. The proposed order would also revise the geographic market definition adopted by the CRTC. Comments on the proposed order from interested parties are currently being reviewed.

In light of the recommendations of the Telecommunications Policy Review Panel and the announcements by the Minister of Industry, the Competition Bureau has been preparing for what it anticipates will be an increasingly active role in the telecommunications sector. The Bureau recently published a draft document entitled: Information Bulletin on the Abuse of Dominance Provisions as applied to the Telecommunications Industry (the “draft Bulletin”). The draft Bulletin is part of the Bureau's continuing effort to maintain a transparent and predictable enforcement policy. It describes the Bureau's approach under the abuse of dominance provisions (sections 78 and 79 of the Competition Act⁷ (the “Act”)) with respect to conduct in the telecommunications industry to the extent that the CRTC has made a determination to refrain from regulating such conduct. The Bureau received 14 submissions from interested parties providing comments on its approach, including comments from the American Bar Association Sections of Antitrust and International Law. The Bureau is currently reviewing and revising the draft Bulletin in response to the submissions and hopes to be able to finalize the document by later this spring.

Antitrust Issues in the Telecom Sector

In preparing the draft Bulletin, the Bureau had the opportunity to consider a wide range of antitrust issues that could arise in the telecom sector. The following provides an overview of the approach that we have suggested to market definition and barriers. Related to the issue of barriers is the issue of foreign ownership restrictions, although this is not discussed in the draft Bulletin. Foreign ownership, along with the question of international trade obligations, is also discussed below.

Market Definition

A range of issues arises in the telecom sector when considering product and geographic market definition. Emerging technologies, such as the entry of cable, the growth of traditional wireless networks and the emergence of new technologies such as WiMax and Broadband over Power Line have the potential to broaden the product market definition significantly. As with any new technology, the question for antitrust enforcement is the significance of their entry – at what point do these technologies become true substitutes for the traditional wireline services? A related problem is the question of market boundaries. Given the difficulty comparing price and quantity in telecom markets, can antitrust authorities use a test based on the possibility of the imposition of a small, but significant and non-transitory increase in price (SSNIP) for market definition, or are there other proxies that can be used to determine substitutability?

There are two challenges that any antitrust agency must always bear in mind when considering matters before it. The first is to ensure that the analytical tools that it routinely uses remain relevant. The second is to recognize that because markets are dynamic, competition analysis must be dynamic. This protects against biases being introduced from previous cases where the facts may differ significantly from the current circumstances. These challenges are most apparent when considering a rapidly evolving and innovative industry such as the information and communications technologies sector. Markets dynamics and the competitive interaction of firms in this sector will change dramatically over the next five years. Technical innovations in areas such as WiMax and Broadband over Power Line will result in a range of new products and services coming to market, which in turn have the potential to greatly reshape the competitive landscape in telecom. Similarly, any antitrust analysis of these markets will need to recognize these dynamic trends and ensure that they are properly reflected in the conclusions.

The Bureau's approach to defining relevant product and geographic markets relies upon the traditional methodology of identifying competitors that are likely to constrain the ability of a firm to profitably raise price or otherwise restrict competition.⁸  Such competitors are identified by their provision of alternative products or geographic sources of supply to which buyers would be willing and able to substitute if the price for the product were to rise above competitive levels.

The boundaries of a market that is defined for a typical competition analysis are delineated using the “hypothetical monopolist” framework to determine the smallest group of substitute products and the smallest region of production that a firm must control such that a profit-maximizing firm (the hypothetical monopolist) would have an incentive to implement a SSNIP above competitive levels. When the Bureau considers a complaint regarding the abuse of dominance provisions of the Act, the alleged anti-competitive acts effectively provide the initial candidate product and geographic market in which the acts have the potential to maintain or enhance market power. These acts can also identify the time period during which it is alleged that the firm exercised any such market power.

As in all cases involving dominance, appropriate safeguards must be taken to ensure that markets are properly defined in terms of measuring substitution at prices approximating competitive levels in order to address the “cellophane fallacy”. This can be difficult in an industry such as telecommunications, with a history of dominance and monopoly pricing, that is moving to a competitive model since there is no historic competitive price that can be used as a reference. The Bureau's draft Bulletin discusses a number of alternative approaches that may be useful to control for the cellophane fallacy in the telecom sector. As noted above, the draft Bulletin represents the Bureau's current thinking on this and other issues in the telecom sector. We are currently reviewing the comments received from interested parties and our views may change once we have had time to consider those comments.

Within the telecommunications sector, the Bureau recognizes that emerging technologies such as cable, wireless, WiMax and others will increasingly have the potential to discipline price and other non-price elements of competition in markets previously subject to monopoly supply. This highlights the importance of performing a proper competitive market analysis in order to assess market conditions at the relevant point in time. Absent such an analysis, there is a significant risk that one will fall prey to relying on previous conclusions that no longer hold true.

This is reflected in the Bureau's submission to the CRTC on its proceeding regarding forbearance from continued regulation of retail local exchange services. The Bureau suggested that the CRTC adopt a market definition test that would allow it to more quickly determine when competition from other sources is sufficient to allow for forbearance. The conditions that the Bureau felt were essential were: at least two independent facilities-based service providers exist (the incumbent local exchange carrier (ILEC) and a facilities-based entrant) that are capable of offering local service that has been determined to fall within the relevant product market for ILEC local service; the entrant is able to obtain and retain a customer base; the entrant's variable costs of providing local service are similar to or lower than the ILEC's variable costs of providing local service; neither the ILEC nor the entrant is capacity-constrained; there is evidence of vigorous rivalry between the ILEC and the entrant in the provision of local service; and industry characteristics are such that the ILECs are unlikely to engage in anti-competitive behaviour.⁹

A recent example of the Bureau's approach to market definition in the telecom sector arose in a 2004 merger between Rogers Communications and Microcell, two Canadian cellular service providers. As part of its review, the Bureau considered whether wireline services acted as a disciplining force on wireless pricing. At the time, the available empirical evidence indicated that there had been little substitution from wireless to other telecommunications services such as wireline. As such, we could not conclude that wireline pricing was acting to constrain the wireless market. Looking forward, changing consumer habits resulting from preferences associated with the flexibility offered by mobility strongly suggests that this market is likely to be protected from the competitive discipline of fixed landline competition in the future. At the same time, as spectrum use evolves and wireless service offerings expand, what will be the relevant product market in five years will likely include a much broader set of services than it was in 2004.

An emerging trend in the telecom market is the bundling of service offerings. The entry of non-traditional players has brought about bundled product offerings that include products from outside of the traditional telecommunications sector. In Canada, this is referred to as the “quadruple play” – wireline telephony, wireless, high speed Internet and video offerings. For antitrust enforcement, this raises difficulties when defining product markets. When should the individual product offerings be considered on a stand-alone basis, and when should it be viewed as part of a broader package of products?

The Bureau fully anticipates that bundles will have an increasingly important role in the marketing of telecom services over the next five years. This may be to the incumbents' advantage as they have the system penetration and range of product offerings that make bundling a profitable strategy. At the same time, entrants may find that product bundles tied to new software applications, IP-based delivery platforms and advances in wireless spectrum capacity allow for successful entry that would not be possible based upon entry using the previous heritage systems.

From the Bureau's perspective, a bundle is an offering of a package of services at a price benefit compared to the price of the individual services in the package taken on a stand-alone basis. Generally, bundling of multiple communications services raises the possibility that the relevant product market will be defined as the bundle. Whether bundles define the market may depend on whether there is a significant enough difference in the cost to consumers between buying a bundle and buying each service independently. Bundles may be a separate product market if consumers would not turn to separate services if the bundled price increases by a SSNIP. If that is the case, relevant markets could be defined around the bundles.

However, a few key services may differentiate one service provider's bundle from that of another's and accordingly may significantly affect the willingness of consumers to substitute between bundles. In such cases, if not all competitors can offer a comparable bundle, aggregation of products into a product market consisting of the bundle may not be possible. In the alternative, to the extent that any key service of the bundle is simply a function of the intelligence of the network/technology, and other providers can access the appropriate software on similar terms to provide that service as part of their bundle, it is unlikely that such services will be sufficient to differentiate one supplier's bundle from another. In this case, aggregation of the product market as described above may be possible.

The question of geographic market definition can raise similar difficulties. Even in circumstances where there are competing facilities-based service providers, can an antitrust authority properly define a geographic market if those competing networks have holes in their geographic coverage of their networks? Does the geographic market become a single location, or can an antitrust authority safely aggregate territorial coverage to define more workable and practical market areas?

For many telecommunications services, the provision of the service is tied to a location. The number of competitive alternatives that are available to consumers can differ depending on where they live or carry on business. In such cases, geographic market definition typically involves starting with the location(s) where telecommunications service is supplied and considering whether customers would switch to suppliers at a different location in response to a SSNIP.

For example, with respect to telecommunications services, the Bureau would define the relevant geographic market based on a specific location if subscribers to services provided at that location were not willing to substitute to services supplied at a different location. A key issue involves the extent of transaction costs incurred by a subscriber at a given location to substitute to an alternative location for access. Prima facie it seems very unlikely that a subscriber at one location would cancel service there and substitute to access at another location in the face of a SSNIP. If this is true, then every location is a relevant geographic market and only suppliers that can provide access to that location are in the market. In essence, a household or place of business theoretically could be defined as a relevant geographic market.

In considering this issue, the Bureau feels that where it is appropriate, it can aggregate all locations that have the same competitive alternatives (within the product market) for the relevant telecommunications services into a single geographic market. In some cases, such an aggregation may follow directly from an examination of the geographic location of networks and consumers. Where there are differences in the geographic coverage of competing networks (i.e., “holes”), it may be necessary to also look at the standard antitrust factors for geographic market definition in order to ascertain whether a hypothetical monopolist would impose a SSNIP with respect to the customers found in these holes.

After such an aggregation, a geographic market can be defined around the network of a dominant firm based on its overlapping footprint with competing networks that provide the relevant telecommunications services (i.e., in assessing which locations have the same competitive alternatives, the Bureau includes potential competitors that can easily provide service to that location). Aggregation of geographic markets identified by competitive alternatives (including potential entrants) is generally sufficient to delineate geographic markets that are appropriate for the identification of market power.

In the Rogers/Microcell merger, the Bureau found the geographic market to be less than national in scope. A national market was rejected because there were some differences in the number of competitors, product offerings and prices across provinces, and there was no persuasive explanation showing that a SSNIP could not have been imposed on a provincial basis. The Bureau did not pronounce on whether the geographic market could have been defined more narrowly (e.g., individual cities) since it was determined that the findings would have been the same whether markets were defined as provinces or more locally. It was determined that an aggregate description of the geographic market (i.e., provinces) was appropriate.

Barriers to Entry

Without barriers to entry, any attempt by a firm with high market share to exercise market power is likely to be met with entry or expansion such that the firm would lose enough customers to its rivals that it is not profitable to attempt to raise prices above competitive levels. A competitor must not only be able to enter, but must also be able to remain in the market long enough to recover its sunk investments. In Canada, entry must be timely, likely and sufficient before it can constrain the exercise of market power. Timely means that entry will occur relatively quickly – in the Bureau's usual analysis, the beneficial effects of entry on prices in a market normally must occur within a two-year period, as is the case in the US. Likely refers to the expectation that entry will be profitable. Sufficient means that entry would deter firms from raising prices by a significant amount. A thorough entry analysis will involve consideration of all possible barriers to entry. In telecommunications markets, certain barriers to entry are more common than others. These include sunk costs, regulatory barriers, economies of scale and network effects, long-term contracts and market maturity.

A number of issues arise with respect to the analysis of barriers in the telecom sector. One such issue is the two-year time period for considering the effect of entry in a market. In its recent preliminary draft report, the US Antitrust Modernization Commission has proposed a recommendation that agencies be more flexible in lengthening the two-year time horizon for entry to account for innovation that may change competitive conditions beyond that two-year period. This raises the question of how long should agencies allow when considering the potential effect of new entry, particularly when entry is expected to be the result of innovative processes that allow for improved efficiencies?

As noted above, one of the conditions for entry to be meaningful in Canada is that it must be timely. As with any guidance provided in any of the Bureau's written Guidelines, there is room for flexibility and this is the same with the Bureau's approach to entry. It does not consider itself bound to a strict two year time period if there is strong evidence that dynamic innovation will result in entry shortly after that date. At the same time, challenges can arise when looking beyond this time period.

In the Bureau's view, two years is often the outer bound where one can reasonably predict the likely effect of innovation in a market. When a firm that has acquired market power by way of a merger has longer than two years to benefit from that market power, it is more likely to entrench itself in its dominant position. One needs to consider the likelihood that the merged entity will be in a stronger financial or technical position to invest in those technologies because of its market power than entrants who are considering adopting it for their entry. Similarly, it is often risky to base conclusions on predictions of innovations that are not yet tested in the market. It is too easy to underestimate the likely time-to-market of such innovations as well as the likelihood of success. The counter to this argument is the introduction of a truly disruptive technology, but often these technologies are not recognized as disruptive until they are well on the road to displacing the market share held by the traditional technology.

The Bureau has recognized the important role that innovation has in the telecom sector. This was a significant factor in determining that grounds did not exist to challenge the Rogers/Microcell merger. Similarly, while the Bureau has not conducted a proper market analysis, we would not be surprised if such an analysis concluded that innovation has allowed cable to become a credible substitute to the telcos' wireline residential service offerings. As noted above in the discussion of recent developments in the Canadian telecom industry, cable's penetration rates in Canada, as well as their success in offering high speed Internet access, provide a strong basis to believe that cable is well placed to enter local residential telephone markets. In these types of circumstances, where there is a proven innovation that is in the process of being introduced more broadly in a market, the Bureau is willing to consider more flexibility when it comes to timeframes.

Another important issue is the role of regulatory barriers, particularly those that have an impact outside of the traditional direct industry regulation that is the usual focus of sector regulators. Two examples arise in this regard. The first deals with the emergence of wireless and the rapid evolution in the use of spectrum. The second deals with foreign ownership restrictions.

Spectrum management will have an increasingly greater role in the development of the sector. Will spectrum management become a major barrier and how should spectrum issues be resolved in the future? Can competition principles be easily applied to spectrum management?

In Canada, Industry Canada is responsible for spectrum regulation and management. Its spectrum regulation and management functions include: development of spectrum management, regulatory and operational policies and procedures; spectrum authorizations (granting licences for satellite and radiocommunication systems); and enforcement of spectrum-related regulations. Industry Canada also sets domestic spectrum policy and coordinates spectrum usage and radiocommunication standards so that they are consistent with our international agreements and treaty obligations with other countries and the International Telecommunications Union (ITU).

There has been a trend internationally to move away from the traditional models of spectrum assignment. Many countries, including Canada, are moving towards a more flexible and market-oriented approaches in order to promote innovation, competition and the efficient use of spectrum. Countries increasingly are relying upon auctions as a tool to assign spectrum to users when demand exceeds supply. They are also liberalizing spectrum use and promoting the development of "secondary markets" for spectrum by allowing spectrum trading and lease arrangements. Canada has adopted the auction model for spectrum use but it is still considering whether to allow secondary markets for spectrum trading.

The Competition Bureau has actively promoted the adoption of a more competitive framework for spectrum assignment in Canada. In the past, the Bureau has provided advice to Industry Canada on the structure and mechanics of auctions in order to ensure that the competitive bidding process is protected. We have also made submissions on policy issues arising from the spectrum auction process, such as whether incumbent telephone and cable wireline providers should in certain auctions be restricted from bidding spectrum and also on the merits concerning the imposition of a spectrum cap.

From a competition policy perspective, spectrum has the potential to raise a wealth of issues. While spectrum is a finite resource, innovations in spectrum usage have allowed an increasing number of new digital services to be offered within a limited amount of usable frequencies and this will only increase over time as digitization and compression technologies improve. At the same time, because availability of spectrum is still an absolute barrier to entry for providing those services, there is the potential for incumbents to hoard or bid up the price of spectrum to hinder or prevent the entry of competing service providers. This could have the effect of deterring competitors who could otherwise enter efficiently from offering innovative new services. This could have significant implications for competition as wireless markets develop over the next five years.

Some of these issues may be dealt with through specific auction rules such as spectrum caps or set-asides, but some of these issues may only arise if market power emerges after an auction, such as through the consolidation of license holders or the ability to lease and trade spectrum in a secondary market. In assessing markets for services that require spectrum, the Bureau would look at elements like the current competitive state of the market, the potential for efficient and viable entry versus the scale economies of spectrum consolidation, and the likelihood for entrants to "innovate around" incumbent providers in determining whether or not either pre- or post-auction intervention is required.

The second example above deals with an issue that has been the focus of recurring debate within Canada for many years. Foreign ownership restrictions can represent a significant barrier to entry into industries that have been identified as sensitive from a national perspective, such as telecom and broadcasting. Typically this type of restriction is the result of legislation that is outside of the control of the industry regulator and requires a change in public policy before it can be addressed.

Canada is one of a small number of OECD countries that still have in place explicit foreign investment restrictions on domestic telecommunications service providers. The Final Report of the Telecommunications Policy Review Panel noted the following:

“While legal barriers to foreign investment in telecommunications carriers have been lifted in many countries, some still maintain various types of de facto controls through ownership of incumbent carriers, public interest tests for foreign investment and other less explicit policies. Nevertheless, it is clear that Canada ranks among the most restrictive countries in the OECD when it comes to explicit restrictions on foreign ownership of voting shares or on other means of controlling domestic telecommunications carriers.”¹⁰

The major concern about liberalization of these rules relates to the potential impact of removing the restrictions in the telecommunications sector for owners of BDUs who provide both broadcasting and telecommunications services through their facilities.¹¹  A further complication arises because some of Canada's largest telecommunications common carriers are now licensed as BDUs. Thus, even if the Telecommunications Act were amended to permit greater foreign ownership or control of Canadian telecommunications common carriers, these companies would remain subject to the foreign ownership and control provisions of the Broadcasting Act . As a result, asymmetrical liberalization of Canada's foreign investment rules could leave cable companies and some telecommunications companies at a competitive disadvantage.

Nonetheless, the Bureau is of the view that foreign ownership restrictions in telecom represent a considerable and sometimes insurmountable barrier to entry. In the Bureau's view, they have served their intended purpose and are no longer necessary to harmonize Canadian policy with that of our global trading partners. Furthermore, the Bureau is unaware of any concerns tied to national sovereignty, security or economic, social and cultural well-being that support the view that foreign ownership restrictions are needed or even well-suited to address. The telecommunications sector is extremely capital intensive and entry into the sector, as well as survival once established, requires having adequate access to equity capital and debt at the lowest possible cost. For these and other reasons, the Bureau supports the removal of these restrictions in the telecommunications sector.

International Trade

Under many current trade agreements, parties have committed to maintaining measures to control or prevent traditional issues of dominance in telecom markets (e.g., mandating access to "essential facilities" and broadly defined interconnection obligations) and to provide for recourse to domestic regulators for dispute resolution. A question arises as to how these existing obligations affect the future telecommunications regulatory environment?

A legal analysis of the obligations themselves and how they would or should be interpreted is necessary before one can determine more precisely what impact parties' international commitments will have on the future telecommunications regulatory environment. However, a high-level view suggests some potential general effects of these obligations on the domestic telecom regime and the interplay between the sector-specific regulator and the competition authority. For instance, these obligations may mean that regulation will have to persist (in order for parties to meet their commitments) in telecom service markets in which forbearance would otherwise be justified by the level of competition in the market. These obligations may also, in some respects, dictate or delineate the institutional framework for the oversight of telecommunications markets. In Canada, there has been recent public debate on the appropriate institutional framework for telecommunications regulation and telecom market oversight. These international obligations suggest that a sector-specific regulator may have to maintain its regulatory function over certain aspects of telecom markets. Alternatively, framework competition legislation may need to be amended to ensure that those regulatory functions persist. This could mean a fundamental change to the role of the competition authority. At this point, we have not examined this issue closely and it is too early to state definitively whether these obligations will have a bearing on future telecommunications regulatory reform.

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¹ CRTC, CRTC Telecommunications Monitoring Report, Status of Competition in Canadian Telecommunications Markets, Deployment/Accessibility of Advanced Telecommunications Infrastructure and Services , July 2006

² Ibid, p. 15.

³ See Telecommunications Policy Review Panel Final Report, 2006 , (2006) p. 2-6.

⁴ Forbearance from the regulation of retail local exchange services, Telecom Decision CRTC 2006-15 , 6 April, 2006, at paragraph 164.

⁵ Telecommunications Act, 1993, c. 38

⁶ Order Varying Telecom Decision CRTC 2006-15 , Canada Gazette, Part I, December 16, 2006 at 4312.

⁷ R.S.C., 1985, c. C-34.

⁸ Unless otherwise indicated, price means price, output, quality, variety, service, advertising, innovation and other dimensions of competition.

⁹ Forbearance from the regulation of retail local exchange services, Telecom Decision CRTC 2006-15, at paragraph 213.

¹⁰ See Telecommunications Policy Review Panel Final Report, 2006 , (2006) p. 11-14.

¹¹ The foreign ownership rules for BDUs are similar but not identical to those for telecommunications carriers. They are set out under the Broadcasting Act.