Here are some excerpts from a must-read piece from Andrew Coyne called:

Canada’s telecom industry in need of real competition

No sooner had the Conservative government issued its decision blocking Telus from taking over Mobilicity than the Conservative party was raising funds off it. “Our Conservative government is taking action to reduce your cellphone bill,” ran the pitch, in emails that went out to party supporters that same day. “We will not allow the big telecommunications companies to shut down competition.”

That’s nice. But the competition the government wants to protect is not competition as you or I understand it, where all the players are free to buy and sell in open markets and may the best firm win. Rather, it’s a carefully circumscribed, artificially sustained affair, a kind of hothouse competition in which the weaker firms are kept in the game by government action, a simulacrum designed to preserve the illusion of competition in place of the real thing. That may be good for the industry, but it’s not clear it’s good for consumers…

…wireless is not the only part of the telecom sector where this sort of highly directed competition is the rule. Across the television and Internet universe, also dominated by Rogers, Bell and Telus, along with Shaw Cable in the West and a handful of other players, the CRTC is engaged in the same kind of complex jiggery-pokery. As with wireless, this is sometimes subject to cabinet override, adding a second layer of unpredictability.

The issue here is that the major carriers, the people who own the “pipes,” are also involved in producing the content that travels along them – in competition, as it were, with their customers, the television networks and smaller Internet service providers that pay to use them. The carriers’ obvious conflict of interest in this regard is a constant source of controversy.

The flare-up over usage-based billing, for example, was in part based on the suspicion that the caps were aimed at limiting the retail ISPs’ share of the market. So, too, the recent CRTC hearings on “mandatory carriage” heard accusations that the carriers were favouring their own offerings over those of the applicants. The industry is consumed with this, an endless game of point-the-finger, again aimed at persuading the regulators, rather than consumers.

We’ve tried the government’s way. It hasn’t worked. Protecting consumers from the ill effects of fake competition may give the Conservatives an issue to raise funds with. But personally, I’d rather have real competition.