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Michael Geist's Blog

Why Verizon's Entry to Canada Would Reduce Consumer Wireless Prices

Fresh off predictions that the CRTC would not eliminate three-year contracts and that a Verizon entry into Canada was "highly unlikely", Scotiabank's Jeff Fan is apparently back with another report  that claims it is a myth that Verizon's entry would lead to lower costs for consumers (I say apparently because Scotiabank declined my request for a copy of the report). The claim mirrors the talking points of the incumbent carriers, who have argued that Verizon is a high-cost carrier that will not enter the market with lower prices.

While no one knows what Verizon's business model will be (or even if they will come), the arguments that they will not result in lower prices requires you to believe that a major new competitor will simply enter with high prices that keep the current incumbent-friendly situation largely intact. One does not need a doctorate in economics to recognize this is highly unlikely. Whether Verizon offers North America-wide roaming or other incentives to attract customers, a new entrant such as Verizon will obviously shake things up and consumers will benefit.


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