Can you help me in Politics, please ?

Vanda R. Rideout, Continentalizing Canadian Telecommunications: The Politics of Regulatory Reform (Montreal and Kingston: McGill-Queen's University Press 2003)

OVER THE PAST twenty years, governments of every political stripe have pursued neoliberal policies that cumulatively have transformed Canadian society. In that time we have seen the deregulation of airlines, trucking, and financial services; drastic reductions in spending for social programs, health care, and public education; an undermining of the country's Unemployment Insurance system; a weakening of Old Age Pensions and child benefit programs; reduction in the minimum wage; privatization of public services; sharp reductions in public sector employment; and relentless attempts to enable the corporate sector to take over the country's public health care system. This comprehensive domestic program has been complemented by the promotion of international trade agreements whose purpose is to enshrine capitalist priorities and to ensure that governments whose policies conflict with those priorities face the threat of international trade sanctions.

Aside from those working in and studying telecommunications, few people noticed when corporate forces began to promote radical changes to the system of regulated telephone monopolies that prevailed across North America 30 years ago. This model, created at the turn of the 20th century, arose in response to widespread abuses of phone companies' unregulated monopoly power, which was being exercised in a manner that left entire groups of customers without service and which subjected those provided with service to widespread price gouging. In a few instances--notably in Alberta, Saskatchewan, and Manitoba--government-owned phone companies were established in response to these corporate abuses. But the approach that was applied most widely involved compromise with corporate power. This model of regulation, which was introduced across North America, entailed a trade-off that granted legal protection to privately-owned telephone companies' monopoly status in exchange for their acceptance of the requirement that they provide service to all customers within their operating areas at reasonable (i.e. socially regulated) prices.

Rideout explains that the heart of this social model lay in the system's series of internal subsidies. Under the regulated scheme, regulators allowed monopoly phone companies to charge premium prices for their long-distance service, which was until recently used primarily by corporations and wealthy individuals. In exchange, the monopolies were required to use a significant portion of the revenues generated by their premium-priced service to provide local service at affordable rates throughout their operating areas.

Corporate users were never happy with this arrangement, which effectively required them to pay for the provision of phone service on a universal, affordable basis. But for decades they had no realistic alternatives. By the 1960s, however, the advent of new technologies offered corporate users the possibility of escaping from the socially regulated model in pursuit of a system that offered them lower long-distance rates and that would be shaped to their needs rather than those of the general public. To this end, corporate communications users in the US formed enormously powerful lobbying groups that focused their efforts on undermining the system of social regulation by supporting the introduction of competition in long-distance phone service.

Continentalizing Canadian Telecommunications provides an invaluable history of corporate efforts in both the US and Canada to undermine social regulation and to substitute an approach that prioritizes meeting corporate communications needs. This history is important in its own right. But given what has transpired over the past twenty years as the neoliberal tidal wave has washed across North America and the rest of the world, the fact that the corporate-driven attempt to transform society was first applied in this sector imbues its history with special importance.

Much of this has been chronicled elsewhere. But Rideout's unique contribution lies in her decision to focus on the popular response to corporate efforts to undermine social regulation of communications and to put a corporate-dominated model in its place. She explains how popular forces in the US, including unions and consumer organizations, greeted the prospect of long-distance competition with open arms because they believed it would lead to a reduction in prices and constrain the power of companies like AT&T. What these activists did not realize is that as the system of social regulation was destroyed, they would lose the leverage they enjoyed over the industry.

When competition was introduced in long-distance service, prices for that service did, in fact, decline. At the same time, however, the price of local service, which had been kept low thanks to subsidies from socially regulated, premium-priced long-distance service, skyrocketed. In addition, once competition and deregulation took hold, monopolies allowed the quality of their local service, which had been closely monitored under the socially-regulated system, to deteriorate. And once these companies no longer needed the same number of people to maintain a high standard of service quality, American phone companies issued pink slips to tens of thousands of phone workers. In short, the experiment with the introduction of deregulation and long-distance competition proved to be a corporate dream and a social nightmare.

The final section of Rideout's work focuses on the different response that Canadian unions and consumers' organizations took when the issue of competition and deregulation arose in this country. Benefitting from the American experience, these groups made common cause with Canada's provincially-owned phone companies to oppose the introduction of deregulation and competition when the CNCP company applied for permission to compete in the provision of long-distance service in this country in 1984. The combination of strong cooperation among the social groups opposing the CNCP application and the relatively weak corporate effort on behalf of CNCP--an effort that was much less elaborate than the effort on behalf of competition and deregulation that had been mounted in the States--resulted in a denial of CNCP's application by the CRTC in 1985.

Unfortunately, the story's ultimate ending is not a happy one. Learning from their mistakes, the corporate sector mounted a second effort to introduce telephone competition and deregulation in Canada that was much more serious and sophisticated than the first. By forming corporate users into pro-competitive coalitions, lobbying the government, advertising and promoting their position through corporate-funded think tanks while they applied sophisticated divide-and-rule tactics among the organizations that had formerly opposed competition and deregulation, the forces promoting the overhaul of Canadian telecommunications were ultimately successful.

We have been exposed to such an elaborate and extensive array of corporate-driven political and propaganda campaigns that it is easy to forget how things used to be and how we have arrived at the current conjuncture. Vanda Rideout provides readers with a comprehensive history of the corporate-driven transformation of the country's phone system as well as the extensive popular efforts that were made to resist it. In the process she offers readers invaluable insights into the corporate strategy that was applied early on to communications and later in other sectors to create the business-dominated arrangements that dominate society today. Social activists interested in reclaiming the world from these forces would do well to familiarize themselves with Continentalizing Canadian Telecommunications: The Politics of Regulatory Reform.

Sid Shniad

Telecommunications Workers Union

Burnaby, British Columbia

Shniad, Sid