The annual meeting of STAC, Canada’s Structure, Tower and Antenna Council, STAC 2021 continued yesterday, with an opening keynote for Day 2 by Hal Johnson and Joanne McLeod on “Keep Fit and Have Fun”. This was obviously quite a change-of-pace type of session for a telecom event, and I thought it was inspirational enough to make this a change-of-pace posting on my blog.
Their message, that we can all live, work and play together, had been ultimately ignited by their commitment to diversity and inclusion. The session heard Hal and Joanne talk about why this commitment is important to them, and what they do about it. Their first interactions with the Canadian media establishment were not shining examples of the Canadian multicultural ideal.
A bit of history: it started with a chance meeting at a gym over 33 years ago. Bodybreak has grown to be one of the most recognized, iconic brands in Canada known for promoting healthy, active lifestyles to Canadians of all ages. The session gave STAC participants a look behind the scenes at what motivated them to start BodyBreak and how it all came together. It comes down to how they dealt with roadblocks that were put in front of them, with a positive perspective. Instead, the pair figured out a way around the challenges to succeed in bringing their message of inclusiveness to the airwaves.
What we do today impacts what we will be able to do as we get older, as we heard from the Heart and Stroke Foundation. “What will your last 10 years look like? Will you grow old with vitality or get old with disease? It’s time to decide.”
Hal and Joanne identified triggers that set poor habits in motion for many. And for those of us who have spent the past year isolating at home, and especially after what seemed like an especially dreary, lonely, and nearly endless winter, the session provided motivation on how to establish new triggers, new routines and the rewards that can be expected for your efforts, with lots of simple tips to enjoy a healthier lifestyle.
A nice change from the standard approach for an opening keynote at a telecom event!
The annual meeting of STAC, Canada’s Structure, Tower and Antenna Council, STAC2021, opened Monday in a virtual format, another event that has transformed digitally in response to the COVID-19 pandemic.
STAC members represent those essential workers who deploy the physical infrastructure necessary to expand the reach and capacity of Canada’s facilities-based networks.
From the outset of the pandemic, over the past year, these workers have developed protocols to enable their work to continue safely to deliver the digital connectivity upon which all of us have depended as most of us are stuck at home. So, it was fitting that one of the sessions on the opening day of the STAC2021 event was entitled “Coping with COVID”. The session was moderated by Anne-Sophie Tétreault from Cognibox and featured Laura Marciniwe of Teletek Structures, Adam Gale of Vertical Specialties, Jeff Selby from Trylon and Steven Bain from Rogers.
How did businesses establish pandemic protocols? How did the industry look after field technicians in dealing with basic needs: finding safe restrooms and safe places to sleep at night when away from home?
As borders closed and shipping faced delays, how were supply chains maintained?
Misinformation and conspiracy theories stoked fears of 5G towers as a cause of COVID-19. Imagine being an installer of equipment on towers or restoring service after an arsonist burned down a tower.
Protecting technicians who needed to go into private residences and uncontrolled workplaces to restore services? Ensuring sufficient personal protective equipment was available to protect technicians and their families.
How did companies deal with team building, burn-out and mental health issues as the pandemic dragged on?
Over the past year, the telecommunications industry has been recognized for maintaining network quality, enabling so many of us to work from home. The presentations represented people on the front line, some of the heroes who made the past year bearable by keeping our bits flowing and building new sites to extend broadband to previously unserved areas.
STAC2021 promises to be an interesting event. There are more than 400 people participating on-line this week. Most of the sessions focus on safety, for workers and the public, such as:
Building a Safety Culture;
Rope Safety: Everything You Should Know About Working with Rope (But Probably Don’t);
Last week, I had the pleasure of participating in an hour-long fireside chat with Scotia Capital’s Jeff Fan to discuss Canada’s current regulatory environment and, of course, we talked about the implications for the Rogers-Shaw transaction.
Jeff created a summary of our conversation and issued it as an Equity Research Alert. I have embedded the note below.
The session was recorded. You can watch it here (registration required).
With so much going on in area of telecom policy I figured this would be a good time to update the list and expand it to include more than just wireless.
Policy decisions should be evidence-based, but unfortunately there are a lot of myths that keep being repeated, so much so that some even show up in the media and elsewhere.
Let’s take a look at some of the most common myths. We’ll start with these five, and follow-up with some more sometime soon.
Myth: Canadians pay more for less
Whether it’s mortgage payments, the gas bill, or internet connectivity, nobody likes paying bills. The feeling is even worse when you think that someone is getting a better deal. So it’s understandable that Canadians get upset when repeatedly told that they pay more than others for the same or worse service. But like most folklore, it’s not true.
So why do people think this? There are number of international price comparison studies that purport to show that prices in Canada are higher than in most other countries. Unfortunately, most people just read the headlines and do not examine how the study was conducted, what data was used, or critically assess the conclusions. To quote a review of one such study, these price comparisons are often little more than “a careless mish-mash of data points from which no reliable conclusion can be drawn.”
To be clear, there are differences in prices between carriers and between countries. But in addition to using faulty methodology and outdated data, one-dimensional price comparisons make no effort to understand the differences or determine the underlying value that customers are receiving from country to country.
To give one hypothetical example, consider a mobile plan that provides 10GB of data per month with an average download speed of 60Mb/s for CA$60 versus a plan that offers 10GB of data with an average download speed of 3Mb/s for CA$40. Which is the better plan? Based on the methodology of some price comparison studies, consumers would be better off with the 3Mb/s plan because it costs less. That may be true for consumers who don’t use data intensive applications, but for those who do, the $60 plan provides better value.
Another factor to consider is the cost of providing the service. One study found that the cost of building wireless networks in Canada is 83% higher than the average of a group of benchmark countries (Japan, Germany, France, U.K., Italy and Australia) and 34% higher than the U.S.. This makes sense as Canadian network operators, among other challenges, must serve a much lower customer base spread over a wide area, purchase equipment in $U.S., and face much higher spectrum costs.
The point is, price comparisons are meaningless unless one takes into account the plan attributes, quality of service, country attributes and cost of providing the service. While they don’t generate the same headlines, there are studies which take these factors into consideration. For example, a U.S. industry association commissioned a study to compare the value received by wireless subscribers across 36 countries, including Canada. It concluded that Canadians receive more value for their dollar – or “more bang for their buck” – than all other G7 countries plus Australia.
Myth: Pricing equals Affordability
Similar to the previous myth, the term “affordability” gets thrown around without enough consideration of the facts. A couple of months ago, I wrote that the expression has been getting hijacked and applied to alternate agendas, such as ISPs seeking to bypass wholesale broadband access with taxpayers footing the bill for capital investment.
We all want lower prices for everything, but that doesn’t mean that current prices aren’t affordable. To look at affordability, we need to look at price relative to the ability to pay. As I wrote recently, Canadian communications pricing actually ranks pretty well using that metric.
That is certainly not saying that that all Canadians can afford the cost of connectivity, or the devices to connect. Unfortunately, there are Canadians who find it difficult, if not impossible, to purchase mobile devices or computers, and basic internet connectivity. As long time readers know, for nearly 15 years, I have been campaigning and advocating for solutions to this important social challenge.
When people can’t afford necessities such as housing, electricity, food, and dental care, we do not try to resolve the problem by forcing the repricing of these goods and services for the entire marketplace. Instead, governments provide targeted social assistance.
In the U.S., the government recently introduced the Emergency Broadband Benefit which provides a monthly subsidy of between $50-75 that can be used to acquire broadband connectivity. There are also efforts to make such programs permanent.
A similar government program may ultimately be required in Canada, but in the meantime, we applaud the efforts of service providers like Rogers with Connected for Success, TELUS with Internet for Good, and the various carrier partners delivering the Connecting Families initiative.
Meanwhile, prices are falling. Statistics Canada data shows that prices for wireless services are continuing to fall while the prices of other goods and services are rising.
Myth: MVNOs aren’t allowed in Canada
Yes, Mobile Virtual Network Operators (MVNOs) should be allowed in Canada. And, (surprise!) they already are.
Indeed, there are a number of MVNOs that have been operating in Canada for years, as well as newer MVNOs like CMlink and CTexcel. Just like most countries in the world, MVNOs are permitted in Canada but, just like almost everywhere, MVNOs aren’t mandated by the regulator.
There are very few countries in the world where the regulator has ordered mobile carriers to make their networks available to MVNOs, and I’m not aware of any regulators that have set wholesale rates. Rather, in the majority of countries with MVNOs, the MVNO must negotiate an arrangement for network access with the mobile network operator. As in all commercial negotiations, there must be a benefit for both parties to the arrangement. This could be through having a well-known brand or reaching a market that the network operator is not targeting. In the end, the MVNO must be able to attract new subscribers to the network operator’s network that the network operator cannot gain by itself.
Myth: Government has set a 50/10 minimum speed target for everyone
Over and over I keep reading people say that the CRTC set a minimum basic internet standard of 50 Mbps (down) and 10 Mbps (up) with unlimited download capabilities. A recent ‘Framing Paper’ for a workshop series from Ryerson’s Leadership Lab on ‘Overcoming Digital Divides’ perpetuates the myth that 50/10 is a minimum basic speed.
The CRTC did indeed set a target with those characteristics, but the intent was for all Canadians to have the choice to subscribe to such a broadband service, not a statement that 50/10 is a minimum basic speed that all Canadians require.
There is an important distinction to be made. Some people may choose to subscribe to speeds and capabilities below the infrastructure target; not everyone needs a 50/10 service.
So if you read a report that says X% of households in a given area do not have broadband connectivity that meets the 50/10 target, look closely to see if the report makes clear whether those households do not have that level of connectivity because it is not available or because, for whatever reason, they have chosen not to subscribe to that level of connectivity.
It will be difficult to overcome digital divides if we can’t keep the targets straight.
Myth: Other countries have a lot more competitors
Some people say that Canada’s mobile wireless market is too concentrated. But what standard are they applying when making these statements?
Of 29 European countries (including the UK), as of the beginning of 2019, there were 19 countries with 3 mobile operators and 10 with 4 mobile operators. In the period between 2010 and 2018, there 4 European countries that went from 4 to 3 mobile operators, and 3 countries that went from 3 to 4. [pdf, 889KB]
In the United States, the number of tier 1 national mobile operators went from 4 to 3 when T-Mobile and Sprint merged in 2020.
Canada has 3 national operators and a number of regional operators that serve different parts of the country.
In addition to the number of competitors, a common measure of market concentration is the Herfindahl-Hirschman Index (HHI). The HHI is determined by squaring the market share of each firm competing in the market and then summing the result numbers. The lower the HHI the less concentrated is the market.
According to data from GSMA Intelligence, as of 2018, the HHI for Canada was 2518. The HHI for the United States, prior to the merger of T-Mobile and Sprint, was 2664, while the weighted average HHI for the EU was 2966.
Whether looking at the number of mobile wireless operators or the HHI, to say that Canada is an outlier is simply not true.
Which other myths you would like addressed in a follow-up?
With the Shaw – Rogers merger announcement, and Parliament debating a bill that threatens to bring a lot of internet content under CRTC regulation, it seems everyone has been forming an opinion on regulatory reform. Unfortunately, there is a lot of misinformation being spread, and opinion pieces being written using deeply flawed reports. Garbage in; garbage out.
I have written much on two sets of reports that seem to keep being cited, despite egregious errors that should be obvious with even a cursory examination. As I wrote last November, studies from Rewheel Research have been thoroughly discredited, with 24 leading academics and telecom economists and lawyers from around the world referring to their reports as a “careless mish-mash of data points from which no reliable conclusions can be drawn.”
I wrote about some obvious problems with the methodology for a UK-based mobile study from cable.co.uk in a piece last summer, “Look at the data”. As I wrote at that time, “It’s very easy to look at a chart on social media, nod one’s head, and retweet or reply without bothering to look beyond the headline. It is tougher to apply a critical eye, look at the data, and determine policy based on deeper analysis.” Sadly, not enough people take the time to look beyond the eye-catching headlines before regurgitating them.
A more recent report from cable.co.uk suffers from the same methodological problems as I documented about the mobile report. One glaring data point jumped out at me. If you are to believe cable.co.uk, the average monthly cost of broadband in Canada is US$76.14, up from US$34.86 last year – an increase of US$41.28. Does anyone believe prices more than doubled last year? Anyone?
CWTA president Robert Ghiz had this response published in Saturday’s Star:
Canada’s telecoms among world’s best in overall value Questionable studies report misleading findings on price of country’s wireless services
Canadian telecom providers offer some of the best and most affordable telecom services in the world.
The Economist’s Intelligence Unit’s Inclusive internet Index ranks Canada third out of 100 countries in internet affordability. Similarly, global accounting firm PwC recently ranked Canada first in the G7 for affordable wireless services.
Unfortunately, these studies are too often ignored. Instead, more attention has been given to one-dimensional and misleading studies that paint an inaccurate picture of telecom prices and affordability in Canada. These include Cable.co.uk’s fixed broadband price study and price comparison reports by Finnish consultancy, Rewheel.
The Cable.co.uk study looks at the median of surveyed broadband plans to develop its country rankings. Using this median price, it claims that broadband fees in Canada are 27 per cent higher than the U.S. But the actual dataset used by Cable.co.uk tells a different story.
Of the Canadian and U.S. broadband plans measured by Cable.co.uk, the cheapest was offered in Canada. By focusing on the median plan, irrespective of which plans consumers choose, Cable.co.uk gives the false impression that Canadians pay more for broadband service.
The questionable quality of the Cable.co.uk methodology is made crystal clear when its 2020 report is compared to its findings in 2019.
For 2020, Cable.co.uk concluded that the average fixed broadband monthly cost in Canada was $76.14 (U.S.) while the average monthly cost in 2019 was $34.86.
Clearly, prices for fixed broadband internet in Canada did not more than double in one year. In fact, in its most recent pricing study, the government of Canada observed that “over the last five years, Canadian broadband prices have trended downwards” and were lower than the U.S.
Meanwhile, Rewheel has been widely criticized for its flawed approach to mobile wireless price comparisons. Last year, 24 leading telecom academics, policy experts and economists released a highly critical review of Rewheel’s methodology, including the recommendation that Rewheel’s reports should come with the same kind of warning labels that social media platforms apply to suspicious information. Similarly, the International Center of Law and Economics published an article cautioning that a Rewheel study examined by the article’s authors amounted to little more than a “careless mishmash of data points from which no reliable conclusions can be drawn.”
In addition to the Economist and PwC reports, other studies have found that Canada’s telecom industry offers superior value. For example, a U.S. industry association-commissioned study found that Canadian wireless subscribers receive more value for their dollar — or “more bang for their buck” — than customers in all other G7 countries plus Australia.
While the studies cited above do not generate the same eye-catching headlines as those which misrepresent telecom prices in Canada, they offer a more meaningful consideration of affordability and value.
Also under-reported is the fact that the three federal government agencies charged with carefully monitoring the telecommunications industry have all concluded that wireless prices in Canada are dropping quickly. According to the CRTC, the average price of wireless plans declined by 37 per cent between 2016 and 2019.
Statistics Canada’s Cellular Service Price Index has declined 23 per cent since January 2019, in contrast to its all-item Consumer Price Index, which shows the cost of all goods and services increased. Finally ISED’s quarterly price monitoring has found that most wireless plans surveyed have decreased between 10 and 18 per cent compared to benchmark prices collected in early 2020.
Even as prices decline and usage soars, Canada’s telecom network operators continue to invest billions each year in expanding Canada’s digital infrastructure to underserved communities and ensuring that Canada maintains its global leadership in quality of service by deploying next-generation technologies such as 5G. Largely due to these investments, Canada’s telecom industry contributes more than $74 billion in GDP and supports more than 630,000 jobs across Canada.
As the COVID pandemic has highlighted, Canada’s economic well-being, safety and quality of life depend on high-quality digital infrastructure. Making world-class telecommunications services available to all Canadians at affordable prices remains the focus of our members.
Flawed data leads to flawed conclusions.
Canada’s telecom policy needs to be based on high-quality reports and studies.
