To paraphrase Neil Diamond’s song (recorded by The Monkees), disappointment haunts my dreams. In part, I think it’s because I’m a believer.

Why? I’m talking about watching last week’s emergency meeting of Canada’s Standing Committee on Industry and Technology (INDU), called to review the announcement that there will be price increases for some mobile customers – those not currently under contract – at some of the service providers. You would never know that Canada’s mobile prices are lower – much, much lower – in the past year if you watched that meeting. You would never know that the price increases aren’t across the board.

I wrote about this issue last week in advance of the INDU meeting. But during the meeting, there was so, so much misinformation being spewed that I had trouble figuring out where to start. Indeed, on Monday, National Bank Financial issued a report entitled “What To Make of Last INDU Meeting With Incorrect Statements”.

You can watch the 2-hour committee meeting yourself on ParlVu. In it, you will hear MPs say that the first thing that happened after the Rogers / Shaw / Quebecor transaction closed was prices going up. That simply isn’t true. A month after the deal closed, mobile prices fell. Indeed, they fell enough to warrant stories like “Rogers launches cheaper 5G cell phone plans, doubles data for its most popular plans” in the Globe and “‘A new era of competition?’: Rogers slashes prices for most of its fastest cellphone plans following Shaw takeover” in the Star.

As National Bank Financial observed in its note:

Conservative members of INDU made these statements on Jan. 11: “it was a promise that prices would go down…we realize now that it’s false”, “I don’t think I have a single constituent in my riding that would agree that cellphone prices have come down”, and “Rogers…made it very clear that this deal…would inject a new and substantial source of competition…and we didn’t see that”

It’s hard to reconcile these with reality.

Aggressive price competition characterized the mobile market throughout 2023. This continued a trend of declining prices that has been going on for several years and has seen Statistics Canada’s Cellular Services Price Index decline by almost 50% in the last five years. A number of times in the past year, Statistics Canada pointed to mobile services as the largest downward contributor, moderating the monthly consumer price index. Last month, Statistics Canada wrote “Consumers who signed on to a cell phone plan in November paid 22.6% less than those who did so in November 2022” (The December CPI figures released earlier this week show that cellular services are down 26.8% compared to December 2022). New mobile options have also been introduced, with some service plans waiving roaming fees in destinations like the US and Mexico and 5G service being expanded to include some flanker brand offerings.

MPs cited so-called international price studies claiming Canada had the highest mobile prices in the world. That simply isn’t true. This blog has consistently pointed out the errors in methodology by many groups who try to undertake international pricing comparisons (such as Rewheel Research or Cable.co.uk). Last year, I wrote “Telecom Price Studies: 2022 Edition” (March 21, 2023) and “Trusted Sources For Telecom Data” (June 27, 2023) which should be good reference points for you. The posts would be even better starting points for Members of Parliament, and their staff.

In the INDU meeting, you will hear some Members of Parliament read correspondence from constituents who complain that they are paying over $250 per month for 2 phones and can’t afford an increase in price. If those MPs were really serious about helping their constituents, they would tell their constituents that mobile rates have dropped considerably and they should contact their service provider (or a competitor) to find out what better deals are available.

If consumers have an affordability issue, there are programs offered by a number of service providers to help disadvantaged households. These services are provided by the service providers with no government funding. In addition, to address those subscribers who only want a cell phone for emergencies or occasional use, the CRTC requires that the major mobile service providers offer a $15 plan with 250 MB of data, 100 minutes of outbound calling and unlimited inbound calling and SMS texting. It is worth noting that this CRTC plan skews Canada’s ranking in some international pricing studies because they attribute a $60/GB price to such a plan, even though no one seriously in the market for a data plan would select this mandated offering.

Time expired for the INDU Committee before the meeting could reach agreement on next steps. At some point, the Committee will be returning to undertake a more complete review of telecommunications, one that was proposed by Bloq MP Sébastien Lemire last September:

That, pursuant to Standing Order 108(2), the committee undertake a study on the modernization of the regulatory framework and the convergence of wired and wireless products to ensure that future decisions are informed by robust data and recommendations for the benefit of all consumers in terms of accessibility and affordability; that it examine this convergence with relevant stakeholders and what they can enable through technological advancements such as 5G, fiber optics, Wi-Fi 6, and many others; that it examine the need for ubiquitous connectivity, necessary data transmission speeds, and innovative opportunities for businesses and consumers in Canada and internationally; that it scrutinize the operating costs of these technologies and the maintenance of so-called critical infrastructure; that it examine the need for network resiliency in the face of climate change; that it specifically investigate unused spectrum in more remote and rural areas as well as deployment targets; that it examine the need to expand mobile connectivity to improve public safety, particularly along roads and highways; that it examine telecommunications tower construction programs and infrastructure deployment financing; that the Committee allocates a minimum of six meetings for conducting this study and that it report its findings and recommendations to the House.

It remains to be seen whether such a study will generate heat and smoke, but fail to create light. As National Bank Financial said “There will be more headlines and studies, but any analysis should be based on correct information.”

Watching certain Parliamentarians in Committee means that sometimes disappointment haunts my dreams. But, I’m still a believer.

A recent report from Desjardins Capital Markets looked at changing demographic trends that could impact the trajectory for growth in Canada’s mobile marketplace.

Last March, Statistics Canada reported that Canada’s population grew by over 1 million people in 2022, the first time that a 12 month period recorded a 7-digit growth in population. Canada’s population was estimated at 39,566,248 on January 1, 2023.

Three months later, in June the agency reported that Canada’s population reached 40 million, and noted that international migration accounted for nearly all (96%) of the growth recorded in 2022. “While several countries are bracing for the impacts of population decline, Canada continues to lead the G7 when it comes to population growth.” By the end of September, Canada added more than another half million people to reach 40,528,326, representing 12-month growth of 1.25M people, a growth rate of 3.2%.

In a post last November, I discussed the importance of understanding some basic demographics in order to analyze economic indicators for the telecom sector. Desjardins’ January 7 note locked in on an observation by Statistics Canada attributing so much of Canada’s recent accelerated population growth on the number of non-permanent residents. “From July 1 to October 1, the country saw the number of non-permanent residents continue to increase; the total non-permanent resident population increased from 2,198,679 to 2,511,437.” This net increase of 312,758 non-permanent residents was the greatest quarterly increase since such data started getting collected more than 50 years ago.

Desjardins notes that it is not clear how to predict that trajectory for growth in the future. “We anticipate that population growth will continue to be strong relative to other developed countries but highlight the risk that the current pace of population growth might not be sustained over the long term.”

Desjardins estimates that growth in non-permanent residents of Canada was responsible to 30-45% of Canada’s wireless net additions last year, “outpacing our estimate of 25‒40% for penetration increases and 25‒30% for growth in the number of permanent residents.”

Since there is pressure on revenues per customer (ARPU), overall wireless service revenue growth is even more dependent on subscriber growth. Population growth contributes significantly to subscriber growth. At the same time, strong population growth is seen as likely contributing to ARPU pressure “as companies tend to discount more aggressively when there are more consumers actively shopping in the market”.

On the flip side, population growth has been blamed for driving Canada’s skyrocketing costs of housing.

Canada’s high population growth rate is an outlier among our peer economies, significantly exceeding the rates in all of our G7 partners. Beyond housing, there are impacts on infrastructure, including telecom networks, and the delivery of public services. A January 10 report from Desjardins found “closing the door to temporary newcomers would deepen the recession expected in 2024 and blunt the subsequent recovery.”

One of my first jobs coming out of school looked at population modelling, driving spending requirements for local telecom investment.

Understanding the impacts of population shifts is important. How will changes in public immigration policy impact the macro and micro economics of Canadian telecom?

The government should be celebrating “the thrill of victory.”

Last summer, I wrote how it was time for government policy makers to declare “Mission Accomplished”. Price reductions in the mobile market were “well beyond any of the expectations that were set by Ottawa”.

While such a mission accomplished statement was likely too much to ask for, the Government’s virtual silence surrounding the significant declines in wireless service prices is counterproductive and somewhat perplexing.

Statistics Canada’s Cellular Price Index has declined by 22% in the last year and by almost 50% since 2018. While impressive, it is even more remarkable given that inflation has driven overall prices up by more than 20% since 2018.

So, when opposition parties repeatedly claim that the government has done nothing to lower prices and has failed to keep its 25% price reduction, one might think the Government would have an easy time refuting such claims. One might have even expected Minister Champagne to point out that prices for wireless services are lower than they have ever been, all under this Government’s tenure. That old “Promise made; promise kept” thing.

But, that isn’t what is happening. Having made the telecom industry its political punching bag, the Government has shown itself incapable of pulling its punches. If anything, the Government appears to regard as a weakness any kind of acknowledgment that the industry succeeded in making services more affordable for Canadians.

The failure to properly acknowledge the decline in Canadian mobile prices is a form of misinformation, perpetuating a distorted view of the industry. This leads to uninformed public discourse, and misguided policy and regulation.

In doing so, the Government has ceded the narrative to the opposition parties, who are continuing to push outdated facts and perceptions. As a result, the government comes across as being on the defensive, giving Canadians the impression that they have nothing to show for their years in office.

Let’s look at the accusation that the government has failed to meet its 25% price reduction objective.

As you may recall, in 2020 the government set an expectation that the national carriers would reduce the price of 2GB, 4Gb, and 6GB, so-called mid-range, plans by 25% within two years. As the chart below illustrates, this objective was achieved prior to the two-year deadline. Two years ago, the government boasted that the reductions “were achieved across the country three months before the target date.”

But, the good news does not stop there. As a result of vigorous competition in the mobile services marketplace, those March 2022 target price points come with substantially more data.

The government’s objective was for Canadians to get a 4G plan for $37.50 with 2GB of data. Yet, a quick survey of carrier websites shows that today there are plans from various carriers for $37.50 (or lower) offering 30GB to 50GB, including some that include 5G speeds. That represents up to a 96% reduction in the price per GB compared to the March 2022 target. This does not include some expired Boxing Day promotions that offered even more data.

The $45 price point has a similar result:

Let’s be really clear. The promise of a 25% reduction in mobile prices promise was not only met, but carriers have exceeded the government’s expectations – by far.

But, you’d probably only know that by reading it here.

We will soon be entering a federal election cycle. The current government will have to defend its record on a host of issues, including telecom policy.

By perpetuating outdated and unfounded perceptions that Canadians pay “too much” for wireless services, the Government is painting its policy initiatives (and election promises) as failures, even though the facts say otherwise. When the previous government was in office, it cost over $80 for a plan with 2GB of mobile data. Today Canadians can get as much as 75GB for $45. This should be a good news story – the thrill of victory.

By failing to highlight these obvious truths, the government is snatching defeat from the jaws of victory. And, it is suffering the resultant agony.

What is the best approach for governments to be dealing with disinformation?

Before the holidays, I asked if more sophisticated content consumers would help Canada avoid the need to implement online harms restrictions? Can investment in improved digital literacy be effective?

An article in Financial Times by Bellingcat founder Eliot Higgins argues that “education, not regulation, is the answer.”

As the digital realm’s challenges mount, calls for state-led intervention grow louder. Governments across the world, alarmed by the implications of unbridled platforms, are contemplating regulatory measures to curb the spread of disinformation. But while the intent might be noble, the journey towards state-mediated truth is rife with complexities.
…
The potential for governmental over-reach is clear. While democratic nations might employ regulations with a genuine intent to combat falsehoods, the same tools could be weaponised by authoritarian regimes to suppress dissent, curtail freedoms and consolidate power. Russia, China, Iran and Venezuela could even use western states’ attempts at countering disinformation as a pretext to justify their own draconian censorship and control of the internet. In such contexts, the line between combating misinformation and controlling narratives becomes precariously thin. The risk? A digital space where genuine discourse is stifled under the guise of regulatory oversight.

He warns that government interventions could “inadvertently exacerbate the very problem they aim to solve.”

“If people perceive these interventions as mere tools to control narratives rather than genuine efforts to combat disinformation, public trust could erode further.”

How do we combat misinformation without impeding digital freedoms? Education is the key.

In short, combat misinformation with good information and training how to distinguish between good and bad. Dealing with disinformation requires investment in education.

Addressing the root causes of disinformation requires a grassroots approach. Education stands at the forefront of this strategy. The idea is simple yet transformative: integrate open-source investigation and critical thinking into the curriculum. Equip the youth with the skills to navigate the labyrinthine digital realm, to question, analyse and verify before accepting or sharing information.
…
The potential of such a grassroots movement doesn’t stop at school gates. Envision a world where universities become hubs of open-source investigation, with national and international networks of students sharing methodologies, tools and insights. As these students move into their professional lives, they carry forward not just skills but a mindset — one that values evidence over hearsay and critical thinking over blind acceptance.

Higgins suggests media organisations could form partnerships with university-level, creating “pop-up newsrooms and investigative collectives.”

Such an approach is by no means easy. It will require a collaboration between policymakers, news media, technology leaders, educators, and academic institutions. Implicit is a greater degree of difficulty than we have typically seen emerging from Canada’s digital policy framework. But there is a certain degree of urgency associated with getting started.

In late December, Statistics Canada reported that nearly half of all Canadians found it more difficult to distinguish between true and false information than it was three years earlier.

Let me leave you with a final quote from Higgins: “In a world where any information, regardless of its veracity, is readily accessible, the traditional educational paradigm could be upended. Historical revisionism, fuelled by falsehoods, could reshape collective memories. How does one teach critical thinking in an environment where facts are fluid?”

What is on the agenda for the year ahead?

As we gear back up after the Christmas and New Year’s holidays, it is somewhat customary to look ahead to the coming year.

Here is what tops my list:

• Driving universal adoption
• Online harms
• Regulatory overreach
• Mandated wholesale access
• Impacts of investment on coverage and resilience
• Digital literacy

I published my 2023 reflections in mid-December and indicated that the issue of driving increased adoption would need to be a carry-over to the year ahead. In my agenda for 2023, I wrote “there is a big difference between having universal access to broadband, and attaining universal adoption of that service.”

A number of reports indicate that affordability is not the primary barrier inhibiting broadband adoption. We saw that most recently in Ofcom’s Online Nation report. The UK report matches Canadian data showing just a quarter of those without a home connection cite the cost of service as the main reason. Across the country (including the far north), service providers have targeted programs to address affordability for disadvantaged households.

Still, we continue to have issues with people appreciating the utility of a broadband connection. I sometimes wonder if the social research is sufficiently adept at assessing whether “I don’t have a need for broadband” is a euphemism for “I have other priorities for my limited income”. If a parent is having to make difficult choices about buying name-brand versus no-name macaroni and cheese to feed the family dinner, then maybe a connected computer just isn’t a priority. As various levels of government continue to fund improved broadband access, I believe that more needs to be done to understand the factors that are inhibiting adoption, and then develop actions to relax each of those inhibitions.

Many of my 2024 agenda items have overlap with others. For example, to what extent have concerns about online safety and cyber security hindered adoption of broadband among those who are not yet connected?

Online harms will be on the agenda for the coming year. Misinformation, disinformation, and hate are significant online challenges. However, in a democratic society, what is the appropriate approach to address harmful forms of expression? As I wrote last year, the government is exploring new legislation but I am not convinced that this is the appropriate approach.

Will regulatory overreach be overruled by the courts or by changes in government policy? The CRTC is planning substantial organizational growth (30%) to deal with the Online News Act and the Online Streaming Act. Before the holidays, there was an interesting article from the US Chamber of Commerce, “How the FCC’s Regulatory Overreach Impedes Internet for All”.

We have seen how some of the CRTC’s determinations on mandated wholesale access can lead to reduced competition by stifling investment. How does that impact coverage for broadband, advanced wireless services, and investment in increased network resilience?

Improved digital literacy and education seems to be a common theme across many of the items on this year’s agenda. Can improved digital education help reduce vulnerability to certain forms of cyber attacks?

It is shaping up to be a busy year. Hopefully, I’ll be more successful checking these items off my list than some of my personal New Year’s resolutions.

What else do you have on your telecom policy plan for 2024?