You would think mobile devices should have killed off payphones by now. Those of us who have an alternative don’t go looking for a couple quarters to make a call from the shopping centre or the airport.
Most Canadians now have a mobile option, but 25% of households don’t. That is what is behind a request by PIAC for the CRTC to take a fresh look at the issue of access to pay telephones. The last time the CRTC looked at the issue was in 2002, with a Decision that came out in 2004.
The CRTC wrote at that time:
Based on information presented in this proceeding, the Commission considers that low-income Canadians, especially those without access to basic residential service, are more likely to use pay telephone service for important personal and emergency calls. The Commission notes that although wireless service may constitute an alternative for many consumers, it is not an affordable option for all.
…
The Commission concludes that, although demand for pay telephone service is declining, pay telephone service is still an important public service that wireless services have not rendered obsolete.
PIAC’s letter is asking the CRTC to expand the scope of a recent tariff filing to allow it to update the evidence last reviewed nearly a decade ago.
PIAC expects to raise issues of social utility of payphones and ideally to introduce evidence of payphone use by the public, in particular those persons living on low income. However, commissioning and compiling this information will take more time than is allotted for intervention.
PIAC raises a valid point. The CRTC should take a fresh look at payphone accessibility.
The reason that 25% still lack access to mobile is CRTC interference in the market place. Canadians pay much higher rates for all telephone services than Americans, and outrageous mobile service rates in comparison.
For example, I can purchase a pay-as-you-go mobile phone for $10 (which usually includes at least $10 service to get started with the phone), and without a contract or a minimum monthly spend, get expensive-per-call but affordable with low use, or a month long service that for $15 includes 10/c minute calling and unlimited text, or for $30 1500 minutes + text and 30mb data. And, you can go truly pay as you go, with service charged by the day ($1 for calls, free text), or pay 2/c per text if you don’t make any calls. Most services above $30 include unlimited talk (long distance too), text and data (at 4G speed) with no commitment. And, that’s pay as you go — the most expensive way to consume services. It’s a far better deal if you can afford a contract.
There simply isn’t any service in Canada that compares. Services here average 30-50% more for equivalent, and that’s assuming there is an equivalent, which in many instances, there isn’t. Most reasonably priced plans cap minutes and data usage in Canada, so to get an equivalent service to unlimited minutes (i.e. pay for the next number of minutes above what you’re likely to use), Canadians are often paying nearly 2x what Americans do.
If carriers truly had to compete, many more people would have phone service, and they’d pay a lot less for it. CRTC’s meddling adds cost and inhibits competition.
The result: 91% of Americans have cell phones, and only 2% of households lack phone service of any kind (Pew Research).
I have phone services in both countries, and for the most part, I try to use my US phone even when I’m placing calls in Canada because it’s a lot cheaper (even though the calls are going out on the Canadian networks — I’ve never been able to understand why the US carriers can charge me so much less for Canadian service than if I bought the same thing here). I only have a Canadian phone so that people here don’t have to pay long distance charges to reach me.
The CRTC should put itself out of business. There’s no need for payphones in Canada, just more fairly priced phone services.
Latest US statistics show about 11% of households with no mobile phone, so it is not clear to me that they have solved the payphone accessibility issue south of the border either.
Careful not to confuse mobile penetration with households. Metrics for penetration (usually total mobile subscriptions over population) often exceeds 100% in some homes, leaving others with no mobile devices at all. High pre-paid numbers often over account for active subscribers making comparisons difficult.
While it may be cathartic for you to say we should disband the CRTC, it is hard to see how that will lead to the outcome you seek.
Come on Mark. You’re a mathie, and you know stats can say whatever you want, but the report you posted lists penetration in 2008. This 2009 survey says 91%. But survey data on this page says that there are 322.9M cell service subscribers in the US, or 102.4% of the population, which I assume accounts for people like me with more than one, and it includes Puerto Rico, Guam and the US Virgin Islands, where penetration is certainly lower than the US proper. The data you posted also says 20% of households have only cellular phones, whereas in 2011 that number is over 30%.
What does all that mean? Your 13% number is certainly wrong. It was less than 9% a year later. And an average of more than one cell phone per person and rapid loss of landline subscribers over the past couple of years suggests that the number without a cell phone has continued to fall both as costs have come down and more people abandon old fashioned fixed phones. So, let’s be conservative and say that by 2011, it’s less than 5% of people without a cell phone, and far fewer households without one (most pre-schoolers in the US now carry cell phones).
Regarding the need for payphones, I know it’s been at least 7-8 years since I’ve even looked for one. And in an emergency, people rush to offer their cellphone, so even if I didn’t have one, I’d have several opportunities to use one. Since no one pays for individual calls, offering use of a phone costs them nothing, so why wouldn’t they? I’ve even seen homeless people carrying mobile phones, so I’d have to say that the “need” for payphones has been virtually eliminated, although I did go looking for a phone book to confirm an address for someone that I had wrong in my contact records.
In any case, no matter how accurate any of these numbers are, I’m willing to put my neck out and say mine are more current and closer to reality. But my point was not to be cathartic — simply to point out that the CRTC is an anachronism. And one that is harmful to Canadian interests. It keeps prices higher because it keeps costs higher, and reduces competition. It restricts freedom of access to content in radio and tv — surely that too is an anachronism in an era where kids are surfing the internet on iPads before the age of 2. In fact, the regulatory constraints slow change and inhibit any carrier from aggressively trying to expand share or compete on price.
The outcome I seek is fairer pricing. It’s too hard for new entrants, especially foreign ones to set up shop in Canada. Service here stinks. Plans here stink. I felt like I was being time-warped back 5 years when I went looking for a service plan and phone in Canada. There is no effective competition, and I lay that problem on the CRTC. When there was a single monopoly carrier for landlines, maybe we needed them, but they are costing Canadians dearly today, and not adding any value. I find it hard to imagine how you could defend that.
The law of supply and demand is pretty consistent and accurate in its predictive ability. If prices come down, usage goes up. Prices in Canada are significantly higher than south of the border. If you lower prices, the percentage of people without a mobile phone will also drop accordingly — probably to the same level as the US if not lower. The problem that you document in this post is created by the CRTC — if they were simply out of the way, prices would fall, and fewer people would find a cell phone unaffordable, especially if payphones went away. Payphones are simply not needed, and they are an expensive luxury to maintain so that a few laggards and holdouts can avoid having their own phone.
Perhaps my time away from Canada has made me more cognizant of the bureaucracy, poor service standards that are tolerated here, and socialist tendencies, but it surely takes the logic of a Soviet apparatchik to defend the continuing need for an agency like the CRTC.
Paul… I said that there is a difference between personal and household adoption rates. Let’s look at a simple example. 3 households, A, B and C each with 3 people and a fourth household, D, with one person. Household A and B have one mobile phone per person, while the solo professional in household D has a personal phone, and office phone, an LTE stick and a 3G tablet. The population of the 4 households has 100% penetration (10 devices for 10 people), but 25% of the households have no mobile phones.
The numbers aren’t important; we’re talking about accessibility to reliable, affordable communications.
As to the point about disbanding the regulator, it is tough to think of an example where telecommunications and broadcasting are completely unregulated. Certainly not in the US with its mix of state and federal regulation and constant political interference.
Yes, I know that’s what you said.
Several things:
– the handset rate doesn’t include sticks, iPads and anything that isn’t a phone with a voice plan, so that’s a red herring. if you include those things, the rate per person approaches 200%, or even more as it does in my household.
– there are more mobile phones than people in the US (not households, people)
– many people in households do not have a cell phone
– elderly couple shares a single phone
– babies don’t have phones
– even a few young kids still don’t have phones
– so even in households that have mobile phones, at least 25% of the people in the household don’t
– this drives the household penetration figure up, not down
– the number of individuals with cell phones is over 95%
– which means that household penetration is very near 100% (and it can’t be less than 95%)
And, I agree, it is about accessibility to affordable communications. In the US, that rate is nearly 100%, and payphones are irrelevant. The reason that’s true is that in the US, plans cost a lot less than Canada. And, while I can’t prove it beyond a shadow of a doubt, my strong speculation is that the cost difference is almost entirely attributable to the CRTC.
Yes, the FCC regulates telco, but it has a much, much lighter hand than the CRTC. State regulation mostly concerns 911 calls, and whether you can talk and drive. They don’t get involved in regulating competition, or rates, or access for the most part. The FTC regulates anti-trust. Politicians care more about selling spectrum and beating up on the internet to enrich Hollywood. There is nothing quite so political as the CRTC in the US. Nor, so anachronistic.
note that the US also has a number of Universal Service programs – state and federal – (Tracphone, Virgin come to mind) that provide simple wireless phones and a little airtime to low income americans
Actually, Mark, the CDC report you link shows 11% of U.S. households with landline but no mobile. Another 2% are shown with no telephone service at all. So that’s a total of 13% of U.S. households without mobile.
Interestingly, [url=http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db1229/DOC-311775A1.pdf]the FCC’s annual monitoring report[/url] shows 4% of households with no telephone service, double the number shown by the CDC. I haven’t seen these two sources reconciled.
Traditionally there have been three social functions for payphones. First, they provided the convenience of being able to make calls away from one’s landline phone. This has pretty much been taken over by mobile phones and shouldn’t be a public interest concern any more.
Second, payphones have been seen as a lower-price alternative to residential primary exchange service. People who couldn’t afford their own landline could always call out (but not in) from a payphone. But it’s not clear that this is still needed. For example, in the U.S., mobile — not payphones — is seen as the lower-cost alternative to landlines. And in Canada, penetration rates are close to 99% — as high as they can go. Cost of landline service is rarely an obstacle. Anyway, at prices of 50 cents to a dollar per call, it is not at all clear that payphones would be considered a lower cost alternative.
Third, payphones have been seen as emergency communications devices. If one were in an emergency when away from one’s landline, one could use a payphone. (I remember a CRTC hearing where Nick Schultz evoked the image of teenage girls on dates carrying dimes in their penny loafers, so they could call for help in case things got out of hand.)
But payphone providers are increasingly concentrating on locations where payphones are profitable, not where danger lurks — and rightly so. My understanding is that a negligible proportion of 9-1-1 calls come from payphones. People carrying mobile devices are ubiquitous — sometimes annoyingly so — and in Canada at least are always willing to help in an emergency. So I think that this third social function of payphones has pretty well disappeared.
More generally, voice-only telephony is increasingly marginalized in our society. Who cares whether there is a payphone or not? I want my WiFi/WiMax/LTE Advanced/other connectivity.
George
As a factual matter, the FCC regulates cell carriers far more aggressively than does the CRTC (or Industry Canada) — you should read the regulations sometime, Paul. The European Union more aggressively than either the U.S. or Canada all over again.
As for pay telephones, it’s unclear why you keep quoting statistics which take total devices as a numerator, and total people as a denominator. They are utterly irrelevant to the number of households that have zero devices, which is the relevant issue. Will you next start dividing cars into people in order to explain that there aren’t any Canadian households that don’t have cars, either? The data in question come from surveys undertaken specifically among low-income households to verify the proportion of households that simply have no cellphone and, in many cases, no landline service. Fortunately, there aren’t very many such households. Unfortunately, they exist. Serving them is part of social policy. Closing our eyes and wishing them away isn’t.
Payphones used to have three important social functions. These have faded away with time, and payphones today are just another service, which should be examined from a purely commercial point of view.
Far and away the most important historic function of pay phones was to enable calling while away from one’s landline. This “nomadic” access was a great advance over being tethered to a given location. Of course, this has been overtaken by mobile devices, which offer true mobility. We don’t really need payphones for this, although they are sometimes convenient.
Second, at one time it was thought that pay phones were a low-cost alternative for those who couldn’t afford regular landlines. This may have been true in the 1960s, but even then it was quite marginal. It was mostly limited to boarding houses, university residences, and the like. It was not the kind of location which is currently under discussion. Anyway, there is serious doubt whether affordability has been a problem since the 1970s. Surveys of non-subscribers showed that only a fifth mentioned cost as a reason. And when urban two-party service was introduced as a lower-cost alternative, there were no takers. Today, there is absolutely no evidence that anyone regards pay phones as low-cost substitutes to landline or mobile.
Third, pay phones were thought to provide emergency service when one was out and about. (In one CRTC hearing, arguing against raising the price of pay phones from 10 cents to 25 cents, Nick Schultz used the example of teenage girls out on a date, with a dime in their penny loafer, so as to be able to make an emergency phone call if things got out of hand; a quarter was too big to fit.) This “emergency” function may have existed when there was a dense network of pay phones in various outdoor locations. It is no longer valid as the number of locations has decreased and are mostly indoors (bars and restaurants, office building lobbies, etc). Anyway, as pointed out by someone else, mobile devices are ubiquitous now. In an emergency, one can borrow such a device (I have never heard of a situation where such a request was refused.)
I like the folk at PIAC and I think that consumer voices need to be heard more loudly. But pay phones are a strange hill upon which to do battle. They no longer have a public interest role.
George