CRTC wireless hearings: Recipe for continued disagreement

As CRTC hearings into the future of wireless service in Canada get underway in Gatineau, Que., the Montreal Economic Institute is warning the national regulator against intervening too deeply into the sector.

The MEI, a not-for-profit research and educational organization, has published a paper, “Three Myths about Competition in the Canadian Wireless Sector,” that concludes Canadian wireless consumers are better off than popular perception suggests. Despite a longstanding contention by many Canadians that they pay more and get less for their mobile dollar, the MEI says things aren’t that dire.

"The negative perception of the industry that justifies interventionist measures is simply mistaken,” co-author and MEI Senior Writer and Editor Martin Masse wrote in a statement. “Canadian consumers enjoy one of the most advanced telecommunications networks in the world, are among the biggest users, and pay prices that are generally close to the average of what is found in other industrialized countries.”

Not quite a have-not?

The study cites data from the Organization for Economic Cooperation and Development that suggests Canadian prices for representative bundles of wireless services are about average within the 34 nations studied - and are actually cheaper than prices in the U.S. Canada’s wireless providers shine on the quality front, as well, ranking 8th out of 25 in download speeds, and 9th in upload speeds.

It’s a perspective that doesn’t sit right with OpenMedia.ca spokesperson David Christopher, who says there’s plenty of publicly available data that reaffirms Canada has a long way to go before wireless service here can be considered competitively affordable.

“Our wireless market is broken and Canadians are paying the price,” he tells Yahoo Canada Finance. “Just last week StatsCan confirmed that telephone costs had risen by 7.6 per cent over the past year, or over three times the rate of inflation. Independent reports confirm that Canadians are stuck paying some of the highest prices in the industrialized world for wireless because of the lack of choice in a market dominated by the Big Three.

Christopher says other countries have successfully lowered prices by opening their networks, with consumers in the UK, for example, now able to purchase a nationwide monthly plan with 1 Gigabyte of data for the equivalent of under $20 a month.

“The Big Three have been systematically crushing affordable, independent services for years - for example by blocking Canadian-owned affordable wireless provider Ting from operating in Canada,” Christopher said. “The CRTC also recently found Rogers guilty of engaging in “unjust discrimination” against Wind Mobile - unfairly rigging the market to limit choice and keep prices artificially high.”

To intervene or not to intervene

Co-author and MEI Associate Researcher Paul Beaudry said federal government efforts since 2008 to stoke competition haven’t worked, and it needs a different plan to encourage greater levels of competition.
“Instead of trying to micromanage competition in the telecommunications industry, the government should concentrate on eliminating the obstacles that prevent true, dynamic competition,” Beaudry said.

The timing of the MEI report is hardly coincidental, as the CRTC kicks off what could very well be the most pivotal hearings in its history. Its Let’s Talk TV hearings, which wrapped up last week, proved similarly eventful, with a high-profile showdown between CRTC Chair Jean-Pierre Blais and Netflix  global public policy director Corie Wright surrounding the over-the-top provider’s refusal to share customer data with the regulator. Continued debate over the CRTC’s role in regulating domestic roaming fees charged by national carriers to smaller operators who can’t afford their own wireless networks is already threatening to derail the discussions before they even get warmed up.

With memories of Industry Canada’s stillborn post-2008 push to encourage competition still fresh, the hearings represent the CRTC’s final opportunity to solicit input before next year’s planned AWS-3 and 2.5 GHz wireless spectrum auctions. Given the wide gulf of opinion between those who believe the market is irrevocably broken and those who think Canadian wireless pricing and accessibility compares favourably with other developed nations, the CRTC might want to buckle in for a bumpy ride. This isn’t something that a few days of discussions will fix.