THE BLOG

Big Telecom V.S. Canada -- Who Will Win?

07/25/2013 12:29 EDT | Updated 09/24/2013 05:12 EDT
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Big Telecom is at it again - Telus is now actually threatening the government with legal action if they follow through on their commitment to stop the Big Three cell phone giants from taking over public spectrum assets that were set aside for new affordable telecom options for Canadians.

Telus reps are throwing a tantrum because they are afraid of losing the regulatory protections they've received in the past. We'll see if the government gives in, but if they do it will be a complete about-face -- the Conservative website currently boasts "We will not allow the big telecommunications companies to shut down competition by buying up undue amounts of wireless spectrum."

Let's not forget that this latest affront from Big Telecom on Canadians comes after we've just seen Telus and Bell introduce new two-year contracts with substantially higher monthly rates than before. It now looks like Rogers are following suit and increasing their monthly rates too.

These price-gouging hikes come despite the fact that Big Telecom is making hugeprofits off the backs of Canadians who already pay some of the highest prices in the industrialized world -- as confirmed by a recent 320-page independent report -- for some of the worst service.

The price hikes are further evidence that Big Telecom have embarked on a systematic campaign to undermine our widely welcomed new cell phone rules -- rules that were shaped by thousands of Canadians who took part in CRTC consultations. Big Telecom's multi-pronged campaign against Canadians includes:

Why these higher monthly rates? Big Telecom's flimsy excuse is that this huge jump in monthly fees is because of our long overdue move to two-year contracts. What do the experts have to say about Big Telecom's claims? Here's what you need to know:

  • Telecom expert Professor Michael Geist examines Big Telecom's argument in detail in this well-researched piece on his blog. Professor Geist concludes that "Without new competitors, the incumbent carriers will use this opportunity to increase monthly costs." In other words, our higher monthly fees are the product not of shorter contracts, but of lack of independent choice in the marketplace -- over 93% of the market is currently dominated by just three large, unaccountable conglomerates.
  • Professor Geist also highlights that many other countries have 2-year contracts with cheaper rates than here in Canada. Spain for example has a highly competitive wireless market with much lower prices than here in Canada. Fancy a new iPhone 5 on a 2-year contract for under $35 a month, including 1GB of data? You'll have to move to Spain for that. That same deal from Telus will cost you $85 a month under their new pricing structure.
  • Expert analyst Peter Nowak points out that even Bring Your Own Device (BYOD) users will see their fees increase under Telus' new fee structure -- despite the fact that BYOD customers aren't tied to a two or three year contract term. Big Telecom clearly doesn't need any excuse to price-gouge Canadians -- that's why Canadian carriers make more money off of cell phone users than almost anywhere else in the industrialized world (fourth highest in the entire 34-country OECD).
  • Big Telecom also likes to use the excuse that our sky-high prices are the result of Canada's large size. Our own Catherine Hart thoroughly debunks that argument, crunching the numbers to show that most Canadians live in a handful of cities - that's why, according to Big Telecom's own lobby group, Canada has just a quarter the number of wireless towers that the U.K. has - despite our being 40 times the size of the U.K.

Our high cell phone prices are acting as a real dead weight on our economy, stifling innovation and hampering job creation. Canada cannot afford to keep falling further and further behind our counterparts in the rest of the industrialized world.

It looks like it's Big Telecom against price-gouged Canadians, innovators, entrepreneurs and business, legal experts; and the list goes on. It's Big Telecom against Canada - and I for one am betting on Canada to win like we have in the past.

The way ahead is clear - we need bold action to lower prices by opening up our networks to all Canadians and new service providers. This idea has worked successfully in the U.K., Australia, and New Zealand. Canadians have laid out a clear road map forward - send this road map to your M.P. and demand action - tell your M.P. that Canadians have put up with Big Telecom's price-gouging and disrespectful customer service for long enough.

P.S. If you haven't already, don't forget to tell Canada's new Industry Minister James Moore you expect him to rein in Big Telecom at: DemandChoice.ca