When looking at telecom services, regulators should focus on whether the market is sustainably competitive. That seems to be the message arising from merger reviews in Europe.

After years of focus on the number of carriers, regulators are taking note of the impact of hypercompetitive markets on investment. UK service providers are unable to cover their cost of capital. As a result, operators are unable to fund network upgrades. Vodafone and Three UK intend to merge. The Competition and Markets Authority (CMA) in the UK is moving into the next phase of its review of the merger.

In announcing its next phase, CMA said “the deal, which combines 2 of the 4 mobile network operators in the UK, could lead to mobile customers facing higher prices and reduced quality.”

The CMA’s Phase 1 investigation found that Vodafone UK and Three UK provide important alternatives for mobile customers. Both have made significant investments in their networks in recent years – which includes the rollout of 5G. Three UK is also generally the cheapest of the four mobile network operators. The CMA is concerned that combining these two businesses will reduce rivalry between mobile operators to win new customers. Competitive pressure can help to keep prices low, as well as provide an important incentive for network operators to improve their services, including by investing in network quality.

Vodafone and Three UK replied, noting “The current market structure has resulted in the quality of mobile network services in the UK lagging significantly behind other European countries. Vodafone UK and Three UK are sub-scale, unable to cover their cost of capital, and constrained in their ability to invest and compete effectively against the two market leaders.”

In February, OpenSignal reported that the UK ranked 22nd for 5G availability and download speeds when comparing to 25 European countries. The UK has the slowest download speeds in the G7. By way of comparison, I recently wrote that Canada is consistently a leader in availability and speeds.

There is a reason why EBITDA margins are necessarily higher among facilities-based telecom competitors. By definition, EBITDA measures the earnings before consideration of interest, depreciation, and amortization. Each of these are costly factors for companies with large investments in infrastructure. If the EBITDA margins are not sufficiently strong, network operators will be unable to maintain investment.

Last October, I wrote about a CRTC arbitration on MVNO access, where the Commission determination explicitly said “This decision helps to promote access to affordable telecommunications services for Canadians and to foster sustainable competition and continued investment.” At the time, I asked “To what extent does it provide clues for the way the CRTC will approach revisions to the wireline wholesale framework?” I wrote about sustainable competition two years ago, showing how the CRTC and Competition Bureau seemed to be at odds in their approaches.

A singular focus on driving lower prices fails to appropriately consider balancing competing policy objectives. In Canada, telecom policy seeks a balance between quality, coverage and price. I’d submit that the number of competitors should be a less important factor for policy makers. The more important consideration should be fostering a sustainably competitive market to deliver overall consumer benefits.

Is it possible to prebunk misinformation?

Is there a vaccine for fake news?

A recent story on 60 Minutes caught my eye and steered me toward the Social Decision-Making Lab at Cambridge University. The director of the lab, Sander van der Linden, told 60 Minutes that misinformation – that which is outright false or incorrect – represents just a small amount of people’s overall media diet. “The much bigger part is what we would refer to as misleading information, half-truths, biased narratives, information that is presented out of context.”

In collaboration with partners at Yale and George Mason University, the Cambridge lab recently published “Inoculating the Public against Misinformation about Climate Change”. The study is said to be a kind of “psychological vaccine” against misinformation.

A growing body of research suggests that one promising way to counteract the politicization of science is to convey the high level of normative agreement (“consensus”) among experts about the reality of human-caused climate change. … evidence is provided that it is possible to pre-emptively protect (“inoculate”) public attitudes about climate change against real-world misinformation.

There is so much bad information circulating on the internet, much of it placed as commercially driven click-bait. Other sources include politically motivated state actors seeking to disrupt social cohesion. Misinformation and disinformation are motivating many of the most contentious sections of Canada’s Online Harms Act, Bill C-63. The psychological research being led by Cambridge suggests countering bad information with good information. The researchers found that the way we perceive what other groups believe serves as a cue for overall informational judgment. So, conveying facts that scientists and experts are convinced about an issue can increase perceived consensus and acceptance across an ideological spectrum, either directly or indirectly.

The research suggests that communicating a scientific consensus on such issues as vaccines or human-caused climate change should be accompanied by information warning that politically or economically motivated actors may seek to undermine the findings. In effect, audiences should be provided with what they call a “cognitive repertoire” — a basic explanation about the disinformation campaigns — to try to pre-emptively refute such attempts. The research suggests that communicating a social fact, such as a high level of agreement among experts, can be “an effective and depolarizing public engagement strategy.”

According to van der Linden, “everyone is obsessed with influencing each other, but in fact there’s almost no program of research that looks at helping people resist unwanted attempts to persuade them. So that’s where my interest is: helping people resist persuasion when they don’t want it.”

Last fall, I wrote about the cost of misinformation. What if we found ways to prebunk misinformation, inoculate people to be able to detect half truths and lies online?

It seems unlikely that we will be able to block the flow of bad information. Does inoculation represent a better approach, enabling Canada to counter misinformation by censuring, not censoring?

There are signs of accelerating progress in cellular and satellite convergence. A recent report from Scotiabank lead with an attention grabbing headline, “Mobile Carriers Poised to Create $1.0T in Equity in the Direct-to-Cell Revolution”.

Last year, I wrote about the FCC taking steps to explore “innovative collaborations between satellite operators and wireless companies”. In February, the FCC issued a 160-page “Report and Order and Further Notice of Proposed Rulemaking” to establish what the agency called the world’s first regulatory framework for terrestrial to space inter-connectivity. The intent is “to enable collaborations between satellite operators and terrestrial service providers to offer ubiquitous connectivity, directly to consumer handsets using spectrum previously allocated only to terrestrial service.”

A March 11 Scotiabank report discussed work underway between AST Spacemobile and Latin American operator AMX as well as TIM Brasil. The report provided capital cost metrics that demonstrate why there is such a high level of interest in interoperability. Scotiabank is calculating the cost of connecting a subscriber in a remote area with a traditional terrestrial tower at a minimum of US$111/subscriber. This estimate includes “civil infrastructure, radio access network [RAN], backhaul, core, software, and permitting”. In lower population density areas, Scotiabank says the cost could be as high as US$500/subscriber.

By way of comparison, the bank says “SpaceMobile’s BlueBird satellites could do the job for US$10/sub”, based on 750 MB of data consumption per month, “an ideal solution for distant areas out of coverage”.

Recently, RCR Wireless News reported on developments from the Satellite 2024 conference. According to the RCR report, many of the players are talking about the need to get “orders of magnitude improvement in airtime pricing”. During one of the panel discussions, Mark Dankberg, CEO of ViaSat said that “while satellite thinks of pricing in terms of dollars-per-megabyte, terrestrial network operators are thinking dollars-per-gigabyte.”

Nonetheless, work on cellular and satellite convergence is progressing. A year ago, Rogers and SpaceX announced an agreement enabling Canadians to stay connected beyond the limits of terrestrial wireless networks. Last week, the Canadian government agreed to lend more than $2 billion to Telesat to help fund development of its broadband satellite constellation.

How will the economics work? According to Scotiabank, cellular and satellite convergence could be a “structural solution to a cash-strapped telecom industry.” The bank estimates that the global telecom industry invests more than US$310B in capital each year, in addition to US$68B in tower leases. Scotiabank estimates mobile carriers spend more than 15% of consolidated capital each year in RAN investments in lower density or non-profitable areas, “frequently to comply with license requirements.” As a result, Scotiabank believes satellite-enabled connectivity could represent US$46.5B in annual capital savings for mobile operators.

With a trillion dollars in equity potential, cellular and satellite convergence is truly the next space race.

Every grocery shopper has experienced shrinkflation. Headline prices for asparagus, previously quoted by the pound, are now often listed for 325g bundles – you end up with 25% less for the money. Boxes of cookies and snacks are smaller; cereal boxes shrank. Prices for items may appear to hold constant, but the packaging is smaller. The headline price disguises the fact you are getting less.

Last month, I wrote “Statscan says cellphone prices are plunging – and they are”. In that post, I used a purely hypothetical apartment metaphor to describe how Canadians might choose to lower their monthly bill for a similar size apartment, or pay the same amount and get a bigger place with better quality. That might be the case if the cost of accommodations happened to be falling. If only!

But, despite these inflationary times, Canadian telecom – especially Canadian mobile wireless service – is actually delivering more value for less money.

A recent post by the Canadian Telecommunications Association talks about this effect in terms of grocery shrinkflation.

In a world of shrinkflation, Canada’s telecom sector stands apart.

• Lower prices – more data

  While prices for most things have increased, prices for both home internet and wireless services are declining. According to Statistics Canada, overall consumer price inflation has risen by 18.5% over the last five years, but prices for cellular services have decreased by an average of over 47% and prices for internet access services have decreased by an average of nearly 8% during the same period.

  For example, according to the Government of Canada’s annual telecom price study, in 2019 the average price of a wireless plan that offered 1GB of data (and 1200 call minutes and 300 texts) was approximately $65 per month (or approximately $75 in today’s dollars). Today, for $65, a consumer can get a plan that offers 75GB of 5G data and unlimited talk and text Canada-wide, with no overage fees. This amounts to a 98.6% decline in price per GB (without factoring in additional savings attributable to unlimited talk and text and zero overage charges). Smaller data plans are also available, like 30GB wireless plans for $34 and $50 for 60GB, which offer more data at lower prices than what was available just a few years ago.

• Faster Speeds

  If you check the label on your favourite packaged good you may find that one or more ingredients have been switched for a cheaper and lower quality ingredient. The opposite is the case in telecom. Though prices are declining, the quality of service has steadily increased. For example, the average mobile data download speeds in Canada have increased by 90% over 5 years¹ and fixed broadband download speeds by nearly 400%². With faster speeds, Canadians can stream movies, play games online, and join video conferences while on the go.

• More coverage.

  While other industries are shrinking the size of their products, Canada’s telecom providers are steadily expanding the coverage of their wireless and fixed networks, with the vast majority of Canadians now having access to mobile wireless and high-speed internet services. And with investments being made in new innovations like cellular-to-satellite communications, Canadians will soon be able to connect from even the most remote parts of Canada.

…
While other industries are shrinking their products, the telecom sector is giving more, not less. By investing billions each year, it is providing Canadians with more data, faster speeds, and wider coverage, all at lower prices.

I shamelessly stole the shrinkflation metaphor last week when I was quoted by Canadian Press talking about the latest Statistics Canada consumer price index report. In February, the cellular price index was down more than 25% compared to a year ago.

Price declines in the national inflation report could indicate that consumers are getting more bang for their buck through new offers, such as bigger data packages, international roaming perks, or voice-to-text voicemail services.

“They’re either getting more for the same price or they’re paying less for the same thing,” said Goldberg, who likened it to “the opposite of shrinkflation.”

“If you go into a grocery store and the box of cereal on the shelf is $3.99, but last month it was a 500-gram box and this month it’s a 400-gram box … you’d say prices went up 25 per cent. In this case, it’s the opposite.”

For years, Canadian telecom policy has recognized the value of investment in telecommunications infrastrucutre. In approving the merger of Orange and MasMovil, I noticed that Spain has recently adopted a similar view, with Digital Transformation Minister José Luis Escrivá saying “the competitiveness of a country partly depends upon its digital infrastructure and its connectivity.”

Here, we phrase it simply. “Canada’s future depends on connectivity”.

Alan Borovoy, Canada’s great civil rights lawyer, used to say we should censure, not censor, those who spew hate speech.

He and I worked together on a committee many years ago. I would frequently give him a ride home afterwards which gave us opportunities to chat. His views continue to influence my perspectives on Bill C-63, Canada’s Online Harms Act. An editorial in the Toronto Star (written to mark his passing in 2015) should be mandatory reading for parliamentarians reviewing the Bill.

Alan was the long time general cousel of the Canadian Civil Liberties Association. The CCLA has called for “substantial amendments” to the Act.

Our preliminary read raises several serious concerns. While the CCLA endorses the declared purposes of upholding public safety, protecting children, and supporting marginalized communities, our initial assessment reveals that the bill includes overbroad violations of expressive freedom, privacy, protest rights, and liberty. These must be rectified before the bill is passed into law.

I referenced The Star’s tribute a couple years ago, writing about early proposals for the Online Harms Act. It is worth another look. As The Star notes, Borovoy’s view, that even the most offensive speech deserved protection, would lead him into “clashes with others on the left.”

I have frequently cited Aaron Sorkin’s version of that perspective from the film The American President: “You want free speech? Let’s see you acknowledge a man whose words make your blood boil, who’s standing center stage and advocating at the top of his lungs that which you would spend a lifetime opposing at the top of yours.”

There are a number of recent articles highly critical of portions of the proposed Online Harms Act, especially as related to Part 2, amendments to the Criminal Code and the Canadian Human Rights Act. Michael Geist writes about why those provisions should be removes from the Act. Christine Van Geyn writes in the National Post that the proposed process creates financial incentives for filing complaints. Individuals face no costs in bringing a complaint — not even the costs of a lawyer — and could receive a $20,000 civil award if successful. “The process becomes the punishment even if the case does not proceed past an investigation.”

Last week, Andrew Coyne wrote “Canada’s Online Harms Act is revealing itself to be staggeringly reckless”, saying, “the more closely it was examined, the worse it appeared.”

There is, first, the proposal to increase the maximum penalty for promoting genocide from its current five years to life imprisonment. Say that again: life in prison, not for any act you or others might have committed, not even for incitement of it, but for such abstractions as “advocacy” or “promotion.”

The most remarkable part of this is the timing. At the very moment when everyone and his dog is accusing someone else of genocide, or of promoting it – as Israel’s defenders say of Hamas’s supporters, as the Palestinians’ say of Israel’s, as Ukraine’s say of Russia’s – the government proposes that the penalty for being on the losing side of such controversies should be life in prison? I have my views on these questions, and you have yours, but I would not throw you in jail for your opinions, and I hope you would not do the same to me – not for five years, and certainly not for life.

Earlier this week, writing in the Toronto Star, Rosie DiManno says “Bill C-63 is a mess of a bill, a fatally flawed piece of overreaching legislation that has drawn scorn from, and made weird allies of, Margaret Atwood and Elon Musk. So maladroit that it can’t possibly be fixed — apart from the obvious correction of severing the child protection part from everything else”.

Finally, a commentary by David Thomas, former chief of the Canadian Human Rights Tribunal, says Bill C-63 is “terrible law that will unduly impose restrictions on Canadians’ sacred Charter right to freedom of expression”.

I have also said that there are limits to our speech freedoms. As the (oft misattributed) expression says, “one’s right to swing their fist ends precisely where the other one’s nose begins.” As CIJA said in its statement on March 6, “We cannot allow mob-driven demonstrations to obstruct our right to participate fully in society.”

There are lines that may not be crossed. Intimidation, threats of physical harm, go beyond the bounds of protected speech. But, we should be able to find a better balance than what has been proposed in Bill C-63.

As Alan Borovoy espoused, censure, not censor.