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Wednesday June 05, 2013 |
For the past few years, there has been a lively debate on the state of the Canadian wireless marketplace.
Consumer advocates and others have argued that Canadian market is not
sufficiently competitive and that aggressive policy action is needed to
foster greater competition and to adequately protect consumers until
market forces can be fully relied upon. The incumbent telecom
companies and the CWTA present a far different story, contesting
multiple international studies and painting Canada as a market leader.
The events of this week - the introduction of a CRTC consumer wireless code and the Industry Canada decision
to uphold its set-aside spectrum policy by killing the Telus -
Mobilicity deal - point to the fact that this debate is now over in the
minds of the government. Government telecom policy in 2006 was focused
on deregulation and a hands-off, industry-led approach. Those days are
long gone as the government has now adopted a consumer-focused, populist
approach premised on the view that a public fight with the telecom
companies is a political winner.
Moreover, the government may have shifted, but the incumbent providers
clearly have not, failing to adapt to the new policy terrain.
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Monday June 03, 2013 |
The CRTC released its much-anticipated consumer wireless code this morning. While much of the code remains unchanged from an earlier draft proposal,
the headline-grabbing change is that the Commission has effectively
brought three-year contracts to an end. The issue of contract length was
the top issue raised by consumers, who argued that Canadian wireless
contracts were longer than most other countries and that they
represented a significant barrier to effective competition.
While the incumbent wireless carriers argued that consumers like
three-year contracts, the CRTC sided with consumers. Effective December
2, 2013, consumers will be allowed to terminate their wireless contracts
after two years with no cancellation fees. The ability to cancel with
no further costs should result in two years becoming the standard for a
long-term wireless contract. It will be interesting to see how quickly the
carriers implement this change as smart consumers may decide to delay
signing new contracts unless they are protected by the new wireless code
if the carriers insist on retaining early cancellation fees in the
final year of a three-year contract until the code takes effect.
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Monday April 22, 2013 |
Appeared in the Toronto Star on April 13, 2013 as Deep Divisions Surface in Canada's Wireless Industry
The Canadian wireless sector was shocked last week by the abrupt
departure of the three major new entrants - Wind Mobile, Public Mobile,
and Mobilicity - from the Canadian Wireless Telecommunications
Association. The new entrants took the CWTA by surprise, issuing a stern
release claiming the association has shown consistent bias in favour of
Bell, Telus, and Rogers, the three incumbent providers. Moreover, the
companies pointed to a blatant disregard for new entrants and alleged
that the CWTA had failed to honour repeated promises of fair
representation.
The move is a major blow to the CWTA, which has long promoted itself as
the voice of the industry. For example, during the recent CRTC consumer
wireless code hearing, it opened by telling the commission that it
“represents virtually all of the major companies in Canada's wireless
telecommunications ecosystem.”
No longer.
While analysts searched for a specific incident that led to the
departure, the more likely explanation lies in the ongoing battle over
the state of competitiveness of the Canadian wireless sector. The
question is not a mere academic debate since key government policies,
including the framework for the forthcoming multi-billion dollar
spectrum auction, the creation of an enforceable consumer wireless
protection code, and the rules on much-hated three-year wireless
contracts, all hang in the balance.
The CWTA has long argued that the Canadian market is competitive and
that no government intervention or additional regulation is needed.
Indeed, as far back as 2000, the association told officials “the
Canadian wireless market has been competitive from the outset.”
As study after study pointed to high consumer prices and comparatively
low subscriber rates, the government began to entertain the possibility
of a set-aside in a spectrum auction to pave the way for new entrants
into the market.
Once again, the CWTA argued against the approach, claiming that the
market was already competitive and that no intervention was needed. The
government rejected the CWTA’s position, leading to the 2008 set-aside
and the eventual entry of Wind Mobile, Public Mobile, and Mobilicity
into the market.
The new entrants succeeded in providing lower-cost alternatives, yet the
incumbents did little to alter their approach, hoping that the new
competition would be short-lived. Provincial governments became involved
with several proposing new wireless consumer protections. The CWTA
first argued against provincial involvement in the issue and later
against immediate implementation of a national code being crafted by the
CRTC.
For the new entrants, an association committed to fighting efforts to
enhance competition and consumer protection was an association fighting
against their own interests since their long-term viability depends on
maintaining policies designed to promote further competition. While the
CWTA and the new entrants may have been able to paper over their
differences on technical issues, the competitiveness issue was too
important for compromise.
At the recent CRTC hearing on a consumer wireless code, Wind Mobile openly broke with the CWTA, telling the commission that
“The CWTA has elected to take certain positions over the express
objections of WIND Mobile (on the basis that such positions are not
"industry positions" but rather those of a BRT-dominated CWTA board).
Accordingly, without needing to single out positions taken by the CWTA
which align with those of WIND Mobile, WIND Mobile simply states that
WIND Mobile does not support the CWTA submission.”
Moreover, Mobilicity had already publicly differed with the CWTA on
consumer issues back in 2011, stating that it was “exceptionally
disappointed with the CWTA's lack of foresight in continuing to act only
in the interests of the Big Three wireless oligopoly.”
Viewed in this light, the only surprising thing about the decision to
abandon the CWTA is not why, but rather what took so long. The move
sends a strong message to the government and the CRTC that there remain
deep divisions within the industry with many legitimate concerns about
competitiveness of the Canadian wireless market.
Michael Geist holds the Canada Research Chair in Internet and
E-commerce Law at the University of Ottawa, Faculty of Law. He can
reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.
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Wednesday April 17, 2013 |
The issue of spectrum transfers has generated considerable attention
over the past few weeks as Industry Canada prepares to unveil a transfer policy in response to the proposed sale of spectrum by Shaw to Rogers. Industry Minister Christian Paradis has made it clear
that he is uncomfortable with the proposed sale, acknowledging that the
intent of the 2008 spectrum auction set aside was not to have the
spectrum end up in the hands of incumbents. While the incumbents and
their supporters are raising the concerns about market uncertainty and potential lawsuits,
the reality is that the government's policy on the Canadian wireless
market has been clear since 2007. Despite the efforts of the CWTA and
the incumbents to convince politicians and the public that Canada is a
competitive market, the government believes more competition is needed.
The Conservatives' policy on wireless competition solidified in 2007,
when Prime Minister Harper shuffled then-Industry Minister Maxime
Bernier (who most believed was opposed to government intervention in the
form of a set-aside or other measures) with Jim Prentice. Within
months, Prentice unveiled the government's policy with the headline "Government Opts for More Competition in the Wireless Sector." In case there was any lingering doubt about where the government stood, the release noted:
Recent studies comparing international pricing of wireless services
show Canadian consumers and businesses pay more for many of these
services than people in other countries. These services are key to
strengthening the competitiveness of Canadian business.
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