Patriotism, English essayist Samuel Johnson wrote, is the last refuge of a scoundrel. Johnson clearly never met a 91原创 interest group. Patriotism is always their first refuge.
Did you see the blaring ads in the weekend papers? Wouldn鈥檛 we feel outraged 鈥渋f the government let a giant foreign corporation buy up half of Canada鈥檚 water鈥�?
Next year, the spectrum space that analog TV once used will be auctioned off for use in mobile telephony. Canada鈥檚 telecom giants 鈥� Bell, Rogers and Telus 鈥� have been scared that the American giant Verizon would get in on their action, though Verizon now says it鈥檚 staying out of Canada.
Verizon, you see, was the foreign giant that was going to swallow up the electromagnetic version of our water. 鈥淲ater鈥� is always emotive. It gives life. 鈥淔oreign鈥� is also emotive.
In some circles, 鈥渃orporation鈥� is also very emotive, though not usually the very corporate circles in which the very large telecom corporations run. Putting foreigners, corporations and water together 鈥� Americans coming to steal our electronic water from us 鈥� well, you can鈥檛 get more emotive than that.
Or ridiculous.
What if the latest ad had said: 鈥淲e鈥檙e the Big Three 91原创 water companies who own the Great Lakes. And Lake Winnipeg. And Great Bear Lake, which we bought and paid for, fair and square, at auction. And we think you should be outraged that in the next big 91原创 water auction, for Great Slave Lake, the federal government won鈥檛 let us bid for more than half the lake.鈥�
I suspect you鈥檇 be able to contain your outrage.
Putting it that way is not nearly as effective as the doomsday vision of Americans sloshing southward with pipelines full of our water. Yes, the Big Three are being locked out of half the next batch of spectrum up for rent. But they鈥檝e already got 90 per cent of the market. How complete do they need their dominion to be?
The whole idea of foreigners taking our electromagnetic resources just doesn鈥檛 compute. They can鈥檛 take the spectrum. They can use it, subject to licence, provided they follow our rules for it. But, unlike what they could do with water by pumping and diverting it, they can鈥檛 appropriate the resource.
If you鈥檙e like me, you didn鈥檛 know quite what to think about telecom when this controversy started. But the Big Three鈥檚 over-the-top ad campaign will have convinced most people that if the companies are so desperate about Verizon coming in, that must be because it would really shake up their cosy operation.
The companies are right; Verizon would have been coming in as a result of a loophole. And a loophole in a flawed policy, to boot. But maybe loopholes and flaws ultimately don鈥檛 matter that much.
The flawed policy is the government鈥檚 attempt to micro-manage competition. The feds undoubtedly are right that more competitors means more competition, which is always good for consumers. But its insistence on going for four competitors in most markets and fixing the rules to get there is much less justified.
The loophole is that the spectrum set-asides on which the Big Three are not allowed to bid are meant to encourage small competitors. Verizon obviously isn鈥檛 a small competitor. In terms of its customer base in the U.S., it鈥檚 bigger than our Big Three combined. In fact, it has more customers than there are people in Canada.
But it would have entered the 91原创 market by buying a small 91原创 operator. If it got to be a bigger operator, that would have been because 91原创s liked what it was doing with their spectrum.
Would that have been a bad thing? Maybe it would be better if a big outsider had to start from scratch, as the Big Three want, and built up its infrastructure from nothing. Maybe it would be better if a big outsider came in by simply buying one of the Big Three. That would certainly keep the other two on their competitive toes. But 91原创 ownership requirements forbid such a purchase.
Verizon coming into Canada through the back door would not have been the cleanest or fairest way to shake up our family compact in telecommunications. But we live in a messy world. If it had got the job done for consumers, that鈥檚 what would have counted.
听
William Watson teaches economics at Montreal鈥檚 McGill University.
