BILLING FOR INTERNET ACCESS SERVICES: ANOTHER PERVERSE EFFECT OF PROTECTIONISM

MONTREAL, Feb. 3 /CNW Telbec/ - Usage-based billing for Internet services is one of the adverse effects of protectionism in telecommunications in Canada, says the Centre for Productivity and Prosperity at HEC Montreal.

The Canadian Radio-television and Telecommunications Commission (CRTC)'s decision to allow usage-based billing for Internet services encourages the Centre for Productivity and Prosperity to question the functioning of the telecommunications industry.

According to Robert Gagné, Director of the Centre and co-author of the study "Openness to Foreign Direct Investment and Productivity in Canada," Canada is among the most restrictive countries in the OECD towards inward foreign direct investments (FDI) in telecommunications.

"Among 23 countries in the OECD, nearly half went from being totally closed to being nearly free from any restrictions on FDI in the telecommunications sector. However, Canada ranks second among the most restraining countries in this industry, behind Japan," says Gagné in his study.

Previous studies found that investment in telecommunications infrastructure have a significant and positive impact on economic growth in the OECD countries. For the director of the Centre, inward FDI improve competition and spur local enterprises to review the quality of their services and their pricing policies. "Usually, consumers pay the bill of protectionism measures, but do they benefit from a better service?"

According to the study, eliminating the current barriers to foreign investments in this sector would allow the country's real GDP per working age person to increase by 1.7% over a ten-year period.

SOURCE HEC MONTREAL

For further information:

Michael Lartigau
Press relations
HEC Montréal
514 340-7320
Michael.lartigau@hec.ca    
Robert Gagné,
Director of the Centre for Productivity and
Prosperity
514 340-6435
robert.gagne@hec.ca

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