Search Results for: affordable

The Montreal Gazette ran an editorial yesterday entitled “Canada’s wireless policy is clueless“. It left me scratching my head.

The article was based on a superficial assessment of the wireless market in Canada, ignoring facts that didn’t agree with its agenda. I had to wonder about the lack of depth in researching its position.

Take for example the paragraph bemoaning Canadian cell-phone penetration:

About 58 per cent of Canadians now have cellphones; in the U.S. the figure is 77 per cent and Britain, the Czech Republic, and several other European countries have more than one such device per person.

Let me be perfectly clear. “More than one such device per person” makes no rational sense. It is a statistic driven by customers arbitraging aberrant pricing plans. Canada should not strive to have disfunctional European pricing models that lead to supra-normal penetration rates. The Gazette apparently thinks that it is good to have multiple phones so that when you call someone on the Bell network, you use a Bell phone; have another phone for your Rogers-based friends and a third for TELUS calls. That is one of the phenomena that drives European penetration in excess of 100%. People holding onto foreign country pre-paid SIM cards is another contributor.

Europeans typically receive no subsidy for their phones. Would the Gazette also want each of us to pay upwards of $150 more for our phones as well?

As the old commercial use to say, “you can pay me now, or pay me later.” Canadians like to pay later. We also like to be able to call local numbers for free from our home phones. Europeans get gouged.

With multiple phones per person, Europeans are also paying multiple bills per user – paying more for the privilege of claiming superior penetration rates over those of us in the colonies.

Here is another juicy paragraph from the Gazette editorial:

As the well-informed University of Ottawa professor Michael Geist explains on the opposite page, lack of competition in the mobile-data business means prices are high, which is keeping Canadians off the newer sections of the information superhighway. Hardly anybody in Canada would be able to afford the mobile Internet service provided by the iPhone, and certain other handheld devices – because all of Canada’s service providers keep their mobile data rates sky-high.

As I have written before, blaming high data plan pricing for the delay in iPhone’s launch is just not credible. The iPhone hasn’t been launched in Germany or any country other than the US. Other countries are said to have better suited data prices; their markets are bigger. But no iPhone. Why is that?

Could it be that Apple is rolling out the product on their own schedule?

Canadians continue to buy the latest versions of Blackberry. Carriers have introduced special plans for Mobile TV that don’t charge by the bit. Canadians are continuing to buy wireless services for the first time increasing our penetration rates, and add new enhanced multi-media features which speaks louder to affordable prices than repeated rantings from opinion pieces in papers.

Rogers’ launched its Vision service in April, beating any of the US carriers to market with truly advanced high speed mobile internet. Barrett Xplore has made broadband internet universally available to every household and business in Canada, coast-to-coast, sea-to-sea-to-frozen tundra.

It seems to me that The Gazette should get better informed before calling Canada’s wireless policy clueless.

Let me again point out the OpEd by FCC Commissioner Robert McDowell has an Opinion piece in the Wall Street Journal on July 24, called Broadband Baloney. He refutes the tendency for people to want government intervention in communications markets that are working pretty well on their own:

Looming over the horizon are heavy-handed government mandates setting arbitrary standards, speeds and build-out requirements that could favor some technologies over others, raise prices and degrade service. This would be a mistaken road to take — although it would hardly be the first time in history that alarmists have ignored cold, hard facts in pursuit of bad policy.

As I wrote on Tuesday, his piece concludes:

When it comes to broadband policy, let’s put aside flawed studies and rankings, and reject the road of regulatory stagnation. In the next few years, we will witness a tremendous explosion of entrepreneurial brilliance in the broadband market, if the government doesn’t micromanage. Belief in entrepreneurs and a light regulatory touch is the right broadband policy for America.

Sasktel has announced that it is appealing parts of the CRTC’s Price Cap Decision (2007-27), dealing with mandated price increases in ‘high cost serving areas’:

We believe the part of the CRTC’s recent Price Cap Decision that systematically reduces the amount of subsidy SaskTel receives to support residential service in high cost serving areas was not within the original scope of the proceeding. This decision essentially forces SaskTel to raise rates in high cost serving areas. We want to continue providing our customers in high cost serving areas with affordable phone service but this decision ultimately ties our hands, therefore, we feel strongly that the CRTC should re-evaluate and conduct a separate hearing to deal with this issue.

The appeal is based on procedural grounds, with SaskTel asserting that the issue was not part of the original scope of the proceeding and therefore the CRTC did not solicit sufficient evidence upon which to base its determination.

SaskTel is a provincial crown corporation. A reduction in transfer payments to rural operators (such as SaskTel) from other carriers is a resultant effect of the Price Cap determination to raise rates in high cost serving areas.

Update [July 13, 12:35 pm]
The appeal is in the form of a Review and Vary application back to the CRTC, asking it to review its own decision.

As I indicated yesterday, there are a number of touch points for government review in a transaction like buying a phone company.

Regardless of who acquires BCE – even if it is a private equity firm – there will need to be an application to the CRTC for approval of the transaction, under the Telecom Act, Broadcast Act and Bell Canada Act.

It appears that the time pressures for the CRTC could be considerable. Under the Bell Canada Act:

Unconditional approval shall be deemed to be given under subsection 11(2) thirty days after written notification of a proposed transaction to the Commission, without prejudice to the exercise of the Commission’s powers under the Telecommunications Act.

That seems to mean that the CRTC has only 30 days under the Bell Canada Act, but perhaps more time under the Telecom Act. [Lawyers, can you help us here?] As we saw in the CRTC’s review of the CTV/CHUM transaction, the CRTC can be very responsive, but even that determination still took 6 months from the date of the original application in order to allow oral hearings.

The CRTC would be guided in its review the transaction by assessing the consistency with the objectives of the Telecom Act:

1. to facilitate the orderly development throughout Canada of a telecommunications system that serves to safeguard, enrich and strengthen the social and economic fabric of Canada and its regions;
2. to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada;
3. to enhance the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications;
4. to promote the ownership and control of Canadian carriers by Canadians;
5. to promote the use of Canadian transmission facilities for telecommunications within Canada and between Canada and points outside Canada;
6. to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective;
7. to stimulate research and development in Canada in the field of telecommunications and to encourage innovation in the provision of telecommunications services;
8. to respond to the economic and social requirements of users of telecommunications services; and
9. to contribute to the protection of the privacy of persons.

The Broadcast Act will also come into play because of broadcast licenses held by Bell.

On top of these CRTC review points, there is also the Competition Bureau that will need to assess whether a substantial lessening of competition is expected to result, substantial being the operative word.

With TELUS saying that it is no longer pursuing its bid, it may plan to pick up assets expected to be divested after a private equity acquisition. Depending on the pieces, the entire review process may start all over again!