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Competition Bureau Raises Wireless Competition Concerns, Concludes Big Three Have "Market Power"

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Wednesday January 29, 2014
The Competition Bureau of Canada has just released its submission to the CRTC's consultation on domestic roaming rates and with it left no doubt about its concerns with the state of wireless competition in Canada. Despite repeated efforts of the big three incumbent providers to argue that the Canadian market is competitive, the Competition Bureau has concluded that the big three enjoy "market power." As the Bureau notes, market power is "the ability of a firm or firms to profitably maintain prices above competitive levels (or similarly restrict non-price dimensions of competition) for a significant period of time." 

Given its market power, the Bureau finds the wireless incumbents can use roaming to shield themselves from competition. It states:

"Incumbents can use the terms and conditions of roaming agreements to raise their rivals’ costs such that incumbents are shielded from the full effect of their the rivals’ (i.e., entrants) entry. Making it more costly for entrants to access incumbent networks through roaming agreements is one way for an incumbent service provider to relax competitive pressure."

In light of the competition concerns, the Bureau concludes that the CRTC should establish regulatory safeguards on domestic roaming pricing. In fact, it states that given the choice between a remedy that goes further than necessary and one that does not go far enough, it would prefer a remedy that is more than strictly necessary.

The Bureau report notably rejects the wireless companies' arguments that the market is competitive, particularly the Church and Wilkins report on the issue:

In the Bureau's view, the C-W Report does not provide adequate support for Bell’s claims that mobile wireless markets in Canada are competitive. Instead, based on the factors described above, the Bureau believes that incumbent service providers do have market power in the provision of retail mobile wireless services, and the CRTC should take this fact into account when considering this matter.

The Competition Bureau submission is a bombshell finding, confirming concerns about the lack of competitiveness in the Canadian wireless market. It opens the door to regulatory action to address the ongoing competition problems and firmly rejects persistent incumbent claims that there is no reason for worry.
Comments (8)add comment

Maynard Krebs said:

Too little, too late
R.I.P. Mobilicity, Public Mobile, Wind.
We hardly knew you.
January 29, 2014

Brian said:

Canada lacks wireless competition?
Really? I am shocked. Shocked I tell you!

Did we really need somebody to do an actual "study" on this? Everybody knows there is no (real) competition.
January 30, 2014

Shelia said:

...
Let's not forget that this entire charade about domestic roaming rates is about one roaming agreement between Rogers and Wind. In Canada, Wind only roams on Rogers network, they do not roam on Bell or Telus. Rogers has stated to the media on several occasions that there is a dispute resolution mechanism via government supervised arbitration but Wind has declined to initiate a dispute. Instead, they chose the public route via the media to heap more shame on the Conservatives misguided attempts to create artificial wireless competition. Both the CRTC and the Competition Bureau are government controlled instruments for the execution of public policy - whether that policy is misguided or not.

I can't imagine the government going to Canadian Tire and telling them they must lease shelf space in their stores to Walmart at "competitive market rates", yet that is exactly what the government is doing to the telecom industry. With a regressive approach like that, the government is making sure that Canada's telecom sector remains unattractive to foreign investment for the foreseeable future.
January 31, 2014

Joah Moat said:

...
The bottom line is that Canadian families are pissing away their money on phone/internet and cable bills. The technology gets better but yet the big 3 keep charging more. It is quite evident today that the big 3 have a monopoly, a cartel, and are price-fixing the market. Furthermore, CRTC is a joke, they are not here for public interest, they only wish to remain status quo. These exorbitant prices are repressing our economy, if the little man doesn't spend his dollar in retail and restaurants, then the economy doesn't spin. I just can't believe that this is still going on. It's a disgrace to be a Canadian. This laissez-faire mentality is going to pound us into the dirt. But hey, at least you'll have your precious little cell phone.
February 01, 2014

pat donovan said:

kids
like the mass kidnapping of tourists (a world-wide phenom from phiolliphies africia, middle east, s.america, mexico, etc)

I think this and data-capture ike house jacking, should be considered kidnapping.

entire markets at a time, not entire cable systems at a time.

it took 15 years to get dc writers in NA. How long before gigabyte + terra cable connections?

pat.
February 02, 2014

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Marketing Policy
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February 04, 2014

Mika said:

Bring on more competition
Look, I won't argue about the Quality of Canadian wireless and cable companies, they're fairly reliable.

However all the carriers have colluded to raise prices... while the Canadian dollar is dropping. If that doesn't spell out a problem, I don't know what will.

Peering policies at ISP's usually result in a net-zero cost for the ISP's, if there is indeed a cost somewhere, it's the small and medium service providers (eg everyone in Vancouver) that are being ripped off the most (Shaw charges 260$/mo to businesses what they charge 90$/mo to their residential customers for 100Mbit service, and still do not offer symmetrical service. The cheapest plan, 10mbit is 55$/mo.) Telus is no better ( Telus is 80$/mo for 50Mbit D/10Mbit U, While Shaw is 85$/mo for 50Mbit D/5Mbit U, and charges you for the outlet. Telus's cheapest plan for 6Mbit, is 55$/mo same as Shaw's 10Mbit plan.)

There's no options, if you to to Teksavvy it costs more, because they're subject to the whims of Telus and Shaw.

With Wireless, things get ugly quickly because Wind is the only one offering something affordable, but to do so requires getting a 3G phone, not a 4G/LTE one. They also don't offer the iPhone so nobody would willingly switch to Wind unless they barely use it to begin with. Ohhh SUCH a nice alternative to paying Rogers, Telus bell 50$/mo for their smallest plans, and using of all the data just trying to slog through all the ad-laden newspaper sites for one day.

Look the point is that the lowest priced plans are functionally unusable on wireless and barely useable on wired ISP's and people are being ripped off grossly for these plans. 10Mbit wirelines should be 15$, not 55. Wireless should be even less if the service is underutilized. Like 10$/mo until 20 minutes or 20MB have been used.
February 08, 2014

Christopher.RY said:

Competition
It is going to be very interesting to see how this all plays out of course, but there has always been an undertow of thought that there is no real competition, and that they all work together, in a way, to be sure that prices are all kept around the same for each company. They might offer different services, but the costs might be pretty much in line across the board.

 

Competition in the Online Casino industry (update)

Any slot game lovers going to tell you that what they love the most about playing the slot games is the ability to sit back and wants the reels spin without having to putting any money or watch the competition. This always occurs during the bonus feature rounds on games that have this type of a bonus. People will go to great lengths and sit at a game at an online casino for a long period of time hoping for that bonus feature. Unfortunately, a lot of people will spend more money trying to get to the feature than what they actually win during it. Honestly, there is nothing that angers casino applicants more than a game that does not hit the bonus feature in a timely manner.

There are many pros and cons to online gambling but in the end, it is definitely a personal decision that only the individual can make for themselves. Most people who are already gambling online are going to welcome the idea of it becoming a legal in the United States. And, if it is not legalized in the United States, then they are still going to wager online but they will do so in other countries. There really is a lot to consider and hopefully the powers that be will make the right determinations as to what is proper for their owned specific area.

February 09, 2014

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