corcoran … Canada’s competition anachronisms.

Canada’s giant regulatory anachronism, the Canadian Radiotelevision & Telecommunications Commission (CRTC), competes with Canada’s other regulatory anachronism, the Competition Bureau, in working up rules, regulations and orders that literally move billions of dollars around, emptying pockets here and filling them over there. Under federal legislation, the two bureaucratic agencies wield power, much of it arbitrary, with essentially no real analysis of what benefits, if any, they bring to the economy or to consumers.

Last week, both made news by claiming to be standing up against corporate interests and in favour of competition and consumers. On Tuesday, the CRTC unveiled its decision to “mandate” wholesale Internet services so as to “drive competition” in broadband and alleviate the “market power” enjoyed by the big telephone and cable companies. In a Wednesday release, the Competition Bureau invited “Canadians to share their views on the merger between Renaud-Bray and Groupe Archambault,” two Quebec booksellers, to determine whether competition would be reduced.

The two agencies thrive on the same economic jargon, the same populist claims, and under identical lack of scrutiny as to whether their activities serve any meaningful economic purpose.

The merger of the two Quebec book retailing chains was announced last May, a local reflection of a global trend from bricksand-mortar bookstores and the continuing Internet revolution.

Apparently staff at the Competition Bureau can’t figure out the book market and so has decided to call on people to share their views as to whether the Archambault deal, in the official language of competition regulation, “is likely to substantially lessen or prevent competition.” That’s a long-standing definitional weasel in competition law, under which any number of deals can be stopped and meddled with.

The whole premise of the Competition Bureau’s existence is that the free market, left to operate on its own, is constantly moving to create monopolies and oligopolies as corporations organize to screw consumers. Under this model, the only good market is one with many competitors, preferably dozens. So when two companies of a certain size merge, the Bureau automatically swings into action.

Maybe some deep corporate malfeasance lies buried beneath the surface of the Renaud-Bray merger with Archambeault, but more likely it reflects the very thing the Competition Bureau is supposedly enforcing: competition. Bookstore chains are like taxi companies and department stores, under constant competitive attack from innovators using the latest technologies.

Evidence of consumer-crushing anti-competitive behaviour is rarely obvious, leaving the bureau to engage in endless meddlesome interventions in mergers, takeovers, and corporate behaviours it concludes are anti-competitive. In March, after a review of the Loblaw takeover of Shoppers Drug Mart, involving 4,600 stores across Canada, the bureau found the deal would substantially lessen or restrict competition and forced the sale of 18 retail and nine drug stores to independent buyers. Loblaw was also forced to sign a behavioural agreement on some its merchandising practices. But how is it possible that selling 27 out of 4,600 stores alters the competitive structure of the industry, especially an industry that is in murderous competition with other retailers, including Walmart and Costco?

Over at the CRTC, Chairman Jean-Pierre Blais played his populist game by extending the commission’s decision to force the telephone and cable companies to open their broadband infrastructure to third-party wholesalers. Again, the official aim is to curb “market power” and assure “competition” in the industry.

The CRTC, in convoluted spurts of analysis, has concluded broadband Internet is an “essential” service that Canadians are entitled to receive as a matter of public policy. The essential service concept is a favourite of corporate rent-seekers who pushed for the CRTC to act. “The CRTC seems to be acknowledging that there’s a very, very important need for another platform,” said George Burger, an adviser to VMedia Inc., a company that aims to cash in on the CRTC decision. He called it “another way to receive the essential service of the Internet, which is just as essential as water or gas.”

The CRTC decision might be essential to companies like VMedia, TekSavvy and others, but 95 per cent of Canadians are already receiving competitive broadband services from their telephone and cable companies. If broadband is an essential service, Canadians have it. What the CRTC decided is that other companies will have the right to ride on the existing broadband connections and sell the same product but at reduced prices in competition with the broadband cable owners. That’s not competition, that’s confiscation of somebody else’s assets for the benefit of a third party.

By mandating wholesale services, the CRTC can claim to be “continuing our work to drive competition so Canadians have access to more choice, innovative services and reasonable prices.” But somewhere along the way additional costs are being loaded onto the system. For the few consumers who sign a cheaper deal with a wholesaler, other consumers will have to pick up the tab. The telecom companies, who have been asked to invest to support the mandate, will inevitably pass all the costs on to consumers.

The big unknown in the CRTC’s decisions, as with those of the Competition Bureau, is how much their essentially arbitrary activities impose in costs on the economy. They keep making regulations, changing the industrial structure of the country, without ever having to justify their existence beyond frequent and repetitive streams of economic jargon on the merits of a limited definition of competition.

The CRTC and the Competition Bureau going about their business with little scrutiny, but at what cost to the economy?