CRTC’s measures are just the beginning

According to the big three wireless and cell providers in Canada (Bell, Rogers and Telus), protecting customers from incurring ridiculous costs by setting caps on their bills is bad for customers and bad for competition.

The statement was made by a Telus representative to a panel of CRTC employees at the Gatineau, Quebec hearing, and echoed by representatives from the other two companies during day two of the CRTC’s hearings on proposed rules to govern contracts and fees.

The measures the CRTC has requested are at the behest of wireless customers in Canada, who have submitted online feedback to the organization over the past few months. Customers have requested caps (to avoid the shock of being charged ridiculous amounts of overage fees) and shorter-term contracts (three-year contracts are practically non-existent outside of Canada). Not only are the big three companies haggling or downright refusing to abide with some of these suggestions, but they are claiming that these measures are bad for competition, while competition is already non-existent in the Canadian market.

Together, the big three own 95 per cent of Canada’s market—they do this through sister companies, such as Fido or Koodo. All of the companies operate through cooperative pricing—whether it’s legally collusion, or not, they essentially hold an oligopoly on the market. If you pull up and compare cell phone or Internet plans from each company, they’re all essentially the same price. We’re also not getting what we pay for. Due to poor access and high fees, Netflix considered pulling out of Canada, with the CEO stating that thanks to our poor ISPs we have almost “third-world access to the Internet” and that it’s “almost a human rights violation,” during a media conference on Sept. 12, 2012.

According to a study published this year by the Organization for Economic Co-operation and Development, an organization that promotes social and economic government policies to help out people around the world, the average Canadian cell phone user also pays the third highest for their monthly bill among users in developed countries; Canada was also the only country in the study that had three-year contracts.

The CRTC hearings are a start, but more measures need to be taken. Canadians deserve shorter contracts, unlocked phones at competitive prices, and lower costs for data and internet service. The only cost incurred for data and text messages is the cost of infrastructure to supply that service (it costs less than a fraction of a cent for every 100 text messages—CNN estimated in 2010 that the average text message has a markup of 6,500 per cent in the states, where texting is much cheaper than in Canada) so why are we still paying so highly for it? If the government wants to show that they are taking Canadians complaints seriously, they need to allow for competition, and start regulating these companies that have taken advantage of the fact that there is none. Canada is one of the best countries in the world in a number of studies on healthcare, living standards, and general happiness—it’s time that we bring our Internet and cell phone service up to that standard.

Cell Phone Facts:

*87 per cent of Albertans have a cell phone (Statistics Canada, 2008)

*47 per cent of Canadian cell phone users have a data plan (Canadian Wireless Telecommunications Association, 2011).

*77 per cent of Canadians with a cellphone feel that the increase in wireless competition from companies like Wind and Mobilicity breaking up the market over the past two years has been positive. (Canadian Wireless Telecommunications Association, 2011).

*Curious who many hours of work it would take on average to pay for a monthly phone bill in different countries? Check out this interactive infographic: http://www.cbc.ca/news/interactives/map-cellphonecosts/

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