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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.

Where can you find trusted sources for telecom data?

I have written extensively about bad data sources such as Rewheel or Cable.co.uk. It is hard to do meaningful international price comparisons, given wide variations in quality and underlying costs. But where can Canadians go when looking for trusted sources for telecom data?

I tend to be a fan of government data. I did my graduate work in mathematical statistics at a time when Statistics Canada was one of the world’s most respected statistics agencies. It remains the most reliable source of Canadian telecom data in my books.

Statistics Canada maintains a telecommunications information portal, “Telecommunications: Connecting Canadians”, as a subset of its “Digital economy and society statistics” portal. There are also communications industry sub-indices produced each month as part of the Consumer Price Index.

The Digital economy portal has breakouts for:

• Cyber security and cybercrime;
• Digital technology and Internet use;
• E-commerce;
• Information and communications technology sector;
• Price indexes for digital economy goods and services;
• Telecommunications;
• and, Television and radio industries.

There is a lot of other information available through that portal, including the Canadian Internet Use Survey.

The Statistics Canada telecom portal also has links to the CRTC’s Communications Market Reports, which are regularly updated with financial and performance information. The CRTC’s portal generally has more current information than it publishes annually. The Commission’s 2021 annual summary was published last week, eighteen months after the end of the year represented in the report. According to the CRTC, “With its investment in new technologies, and its new streamlined data collection and validation processes now in place, the CRTC has the tools to release data not only in a timelier fashion, but also in a more transparent and accessible way. The timing of the releases of the future iterations of the Annual Highlights will benefit from these improvements.”

The CRTC’s Communications Market Reports site is also a portal, with data summaries on various sectors and access to raw data in spreadsheet form. The CRTC portal also offers a number of tableaus (such as the one below), produced in conjunction with Statistics Canada, that can be configured dynamically by the viewer.

So where do I go for reliable facts and statistics? I start with government agencies, especially data produced by Statistics Canada.

A week and a half ago, ISED released the latest edition of its series of telecom price studies. I’m going to look at that report over the course of a few posts.

It’s a real challenge to create meaningful international telecom price studies.

Remember when two dozen leading economists and academics said, “The Rewheel story is easy to understand. It is also completely wrong.” and “Rewheel’s rankings are of no value in comparing prices and assessing the level of competition in wireless markets.” Rewheel’s reports were characterized by ICLE as “a careless mish-mash of data points from which no reliable conclusions can be drawn.” Last week’s report [pdf, 1.2 MB] lives up to that billing.

I looked at a couple well publicized international telecom price studies about a year and a half ago. In that post, I write of my frustration with “the misinformation from pseudo-statistical studies being circulated with viral velocity”. I pointed out what should be easy to detect flaws with the methodology being used by Cable.co.uk.

Typical problems with telecom price studies arise from overly simplistic examination of the different countries. While most studies adjust for currency variations, very few make adjustments for PPP (purchasing power parity). If consumers are earning 80% less in one country, it doesn’t help for them to pay 25% less for their digital connections.

Fewer still account for variances in quality of the products and services, such as speeds, coverage, costs of building networks. That can be like comparing prices for bicycles and motorcycles. A recent PwC study [pdf, 660 KB] compared Canada to the rest of the G7 plus Australia. Canadian carriers invest almost double the amount capital measured on a per subscriber basis ($168 vs $87), with capital intensity 35% more (19% versus 14%).

There are hundreds (or thousands) of price plans available in each country. It is virtually impossible for telecom price studies to look at which plans are the most popular in each market. And then, how would a study start to compare those to the plans in other countries? Arithmetic averages (means or medians) are somewhat meaningless. Are the plans that most consumers are buying are weighted more heavily than those on extreme ends of the menu? In countries with 150 to 200% mobile penetration rates, does the study account for people paying multiple bills?

Let’s consider the telecom price study released earlier this month by Innovation, Science and Economic Development: “Price Comparisons of Wireline, Wireless and Internet Services in Canada and with Foreign Jurisdictions: 2022 Edition” [pdf version, 1.8MB]. Wall Communications prepared the report for ISED.

As in some other recent years, the 2022 edition is missing a section on caveats to the interpretation of the findings. Those notes used to be an important part of the study. For example, in 2016, the ISED study included a page of notes, including these two paragraphs:

Prices in Canada and international jurisdictions are driven by a complex mix of a number of factors: cost of service, competitive positioning, technological advances, consumer behaviour and regulatory frameworks. As wireless technology is constantly improving and consumers demand ever more bandwidth and data caps, service providers are constantly increasing features. In the Study, these changes are reflected by the need to regularly update the definition of service baskets. Hence, price increases in those baskets may in part, simply reflect better service levels offered to consumers.

This Study did not take into account the network technologies deployed in the networks nor the speed or quality of service of those networks. Finally, this Study did not account for any cost of service or socio-economic factors that may be relevant for price differences across different domestic and international jurisdictions. Thus, factors such as population density, terrain and climate have significant impacts on the cost of service. Similarly, socio-economic factors such as affordability indicators (i.e. mobile prices in relation to disposable income), number of handsets per subscriber, number of minutes of usage per subscriber and other factors were not within the scope of this Study.

The 2022 edition includes a few caveats in its Introduction, but it would benefit from a separate “reader’s notes” section.

I’ll look at the results of ISED’s 2022 price report in another post later this week.

I’m a numbers guy. An eternity ago, I studied statistics and have a graduate degree in the subject. I helped edit a university level textbook in econometrics.

So I get somewhat frustrated when I see the misinformation from pseudo-statistical studies being circulated with viral velocity, despite flaws that should have been immediately apparent, even to those with just a modicum of numeracy.

For example, last week, an article in the National Post cited figures from Cable.co.uk claiming that for home broadband “Canadians paid $0.94 (U.S.) per megabit per month. The French paid US$0.48, the Americans US$0.20, the Swedes US$0.12.” That same study was discredited last April in a blog post by CWTA. “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 US$76.14 while the average monthly cost in 2019 was $34.86.”

Does anyone really believe that Canadian broadband monthly prices more than doubled between 2019 and 2020? Doesn’t this show that there just might be a problem with the methodology being used by Cable.co.uk? I wrote more detail about those issues last April in “When flawed data leads to flawed conclusions” and a year ago in “Look at the data”.

Price comparisons from Rewheel have merited dubious distinction for systemic problems, referred to as “a careless mish-mash of data points from which no reliable conclusions can be drawn.” As I wrote a year ago, critics have said “The Rewheel story is easy to understand. It is also completely wrong.”

Given the many theoretical and practical flaws and errors contained in the Rewheel study, we find it of no value when comparing prices internationally or establishing the level of competition in a country. A warning label informing readers about the lack of intellectual rigor and the misleading and incorrect nature of the Rewheel study’s results is appropriate and recommended.

For a dozen years, I have been writing about flawed studies being used to support advocacy efforts (see: “Mixing passion and scholarship” from November 2009).

As the year winds down, I will try to put together some general notes on how to read price comparison studies, and what to watch for.

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?

That is why I say, “Look at the data”.

A week ago, Toronto Star columnist David Olive appears to have relied on the flawed cable.co.uk data and rankings as the basis for his article “The time is right for Ottawa to fix Canada’s disgraceful telecom system”. By failing to detect the fairly obvious errors in the report, there is no support for Olive’s conclusions.

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.