Sign me up! I want $10/month high-speed Internet too. Canadian prices are out-of-whack and too high. At least, that's what the Association of Community Organizations for Reform Now -- ACORN, for short -- is telling us. They are asking the CRTC to mandate that $10/month high-speed Internet be made available to low income families. And yes, that's Internet price controls.
In a January 2016 report titled "Internet for All," ACORN reported that 83.5 percent of respondents to their survey considered high-speed Internet "extremely expensive" and that 59 percent paid for Internet access by forgoing other household necessities. Some 64 percent had to cut into their entertainment budget, while 13 per cent even dipped into their rent payment money for Internet service.
What does ACORN make of the data they collected? Page four of their report says, "ACORN Canada members feel strongly that access to home Internet is essential and a right". And later on it says, "The United Nations now considers access to Internet to be a human right, comparable with freedom of speech." In the Toronto Star on February 2, ACORN spokeswoman Alejandra Ruiz Vargas said that a lack of affordable Internet service "excludes low-income Canadians from equal opportunities to education, employment, government services and modern civic participation."
ACORN wants us to believe that without Internet access, low income Canadians cannot make satisfying social connections and will be unable to better themselves economically. How else could someone satisfy their basic human right to Facebook?
Now, these claims are terribly confused and chock-full of hyperbole. I certainly hope ACORN sees them as such because it wasn't that long ago that Canadians were perfectly capable of making meaningful friendships and finding employment outside of the virtual world. Many still do so today. Were the human rights of previous generations that lacked affordable high-speed Internet service being violated? What this reveals is that ACORN's respondents didn't distinguish between their wants and needs.
But ACORN is correct about the price of Internet service. Netflix executive, Ted Sarandos, said in 2013 that Canadians have "third world access to the Internet," and that it is "grossly overpriced." There's little doubt that Canada suffers from poor quality Internet service and that access is expensive. This was confirmed by a Harvard University study in 2009 and again by an OECD study in 2013. But are these quality and cost problems best solved by mandating $10/month high speed Internet?
A 2011 report by the CD Howe Institute argued that the high price of our Internet service is directly related to a lack of competition in the Canadian marketplace. And as Jesse Kline pointed out in a National Post article two years ago, removing the regulatory and bureaucratic impediments to competition -- like our anachronistic foreign ownership rules and the barriers to new infrastructure investment -- would go a long way toward helping to solve this problem.
ACORN has a history of diagnosing a real problem yet proposing precisely the wrong solution. In 2010, ACORN was part of a coalition of groups that sued the federal and Ontario governments alleging a failure to develop an effective housing strategy. The coalition's legal documents were high on platitudes but low on concrete ideas. Yet they had no qualms about asking that more taxpayer money go to subsidize or purchase housing for low income earners -- effectively expanding the governments' interference in the housing market. As it turned out, the Ontario Superior Court of Justice found little merit to their claim, so the case was tossed out in 2013.
Unlike Internet access, a lack of affordable housing is not a trivial matter. But what is the most effective solution in terms of costs and results? The Demographia International Housing Affordability Surveys have repeatedly confirmed that the affordability of housing is overwhelming linked to the amount of government interference in the housing market -- the greater the interference, the less affordable housing becomes. And yet ACORN advocated for more government interference which would only exacerbate the problem.
Whether it's Internet access or affordable housing -- the same problem presents itself. Government interference drives up prices while constraining the problem solving power of a free market. If ACORN wants to effectively advocate for those in poverty, it's doing it wrong. It should be advocating for less interference, fewer regulations, and a less powerful bureaucracy. The solution is never more government. It's less.
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