Verizon fallout taints telecom relations with Ottawa

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Relations between the federal government and the wireless industry have sunk to a historic low, raising the prospect that Canada's Big Three carriers will face increasing pressure from regulators on issues such as domestic roaming charges.

Industry insiders speaking Tuesday at the annual conference of the Canadian chapter of the International Institute of Communications said the fight over the now-aborted effort by U.S. telecom giant Verizon Communications Inc. to expand into Canada has created fallout that could last for years.

Rogers Communications Inc., BCE Inc. and Telus Corp. mounted a "Fair for Canada" lobby campaign this summer that accused Ottawa of offering Verizon unfair advantages. to enter Canada. Ottawa is defending its efforts to foster competition with a PR campaign featuring newspaper, radio and television ads that state, "Canadians pay some of the highest wireless rates in the developed world."

Richard French, a former vice-chairman of telecommunications at the Canadian Radio-television and Telecommunications Commission, said he hasn't seen "as low a point in business-government relations" since the National Energy Program was introduced by former Liberal prime minister Pierre Trudeau in 1980.

"I don't think it is in the consumer interest to have a telecom industry and its government … engaging in these childish exchanges that we've seen in the last six months or so," said Prof. French, who now teaches at the University of Ottawa.

"I am not hostile to government policy which seeks to introduce a new carrier," he added. But he said the government's ad campaign is "the most extreme example that I have ever seen of an essentially political argument being made with taxpayers' dollars."

Bernard Lord, head of the Canadian Wireless Telecommunications Association, said it is a mistake to "overdramatize" the state of government-industry relations. But he, too, questioned whether the government's ads are a legitimate use of taxpayers' money.

"I think it's wrong for the government to use tax dollars to run ads to attack a very successful Canadian industry that employs close to 300,000 Canadians," Mr. Lord said in an interview. "No one has broken the rules here. We're not talking about the Senate here. We are talking about companies that have respected the rules."

The government ads have proven controversial. Several delegates at the conference said their message of better service and lower prices is strikingly similar to talking points issued by the Conservative Party of Canada.

John Lawford, executive director of the Public Interest Advocacy Centre, characterized the incumbents' summer PR campaign as an "extreme slap in the face" for consumers, but agreed the government's ads are politically motivated. "You are darn right they're using it just for political purposes," he told delegates. "The context was that three large companies in this country purposely tried to embarrass the government, which they never had openly done before."

Jake Enwright, press secretary for Industry Minister James Moore, did not immediately comment on criticisms of the ads. Separately, he stressed the government will announce its plans to reduce domestic roaming costs in the coming weeks. "Our government believes roaming costs are too high," he said in an e-mail late Monday.

BCE owns a 15-per-cent stake in The Globe and Mail.