Telecom by yum9me (CC BY-NC-ND 2.0) https://flic.kr/p/53jSy4
Bell announced plans this morning to buy MTS, the Manitoba-based wireless carrier that has been critical to creating a more competitive wireless market in the province. The nearly $4 billion deal would include a commitment to divest one-third of MTS wireless customers to Telus. The agreement is still subject to regulatory and shareholder approvals along with figuring out how some customers go to Telus and some stay with Bell. While the government has yet to articulate a clear strategy for wireless competition in Canada, the deal appears to kill the hope of four carriers in each market and will likely mean sharply increased prices for Manitoba consumers.
With the four competitors in Manitoba – Bell, Telus, Rogers, and MTS – the province features some of the lowest wireless prices in Canada. Compare Bell’s wireless pricing for consumers in Manitoba and Ontario. The cost of an unlimited nationwide calling share plan in Manitoba is $50. The same plan in Ontario is $65. The difference in data costs are even larger: Bell offers 6 GB for $20 in Manitoba. The same $20 will get you just 500 MB in Ontario. In fact, 5 GB costs $50 in Ontario, more than double the cost in Manitoba for less data. The other carriers such as Rogers and Telus also offer lower pricing in Manitoba. The reason is obvious: the presence of a fourth carrier creates more competition and lower pricing. With MTS out of the way – and Bell and Telus sharing the same wireless network – prices are bound to increase to levels more commonly found in the rest of the country.
The Trouble with the TPP series has identified several instances where promises about deal’s benefits for consumers prove to be largely illusory upon closer examination of the actual text. These include weak privacy protections, anti-spam standards, and e-commerce rules. The same over-promise and under-deliver TPP approach arises with respect to consumer mobile roaming. The TPP contains a large telecom chapter, which some governments used to promote as a key pro-consumer feature of the agreement. For example, the Australian government claimed:
Australia has successfully advocated for a provision that addresses, for the first time, the high cost of International Mobile Roaming.
The Canadian government used similar language in its TPP summary, stating that the TPP “includes, for the first time in a trade agreement, a dedicated article addressing the high cost of international mobile roaming.”
Last year, the Quebec government introduced legislation that would require Internet service providers to block access to unlicensed online gambling sites. It provides that “an Internet service provider may not give access to an online gambling site whose operation is not authorized under Québec law.” The Quebec bill, which is currently before the provincial legislature, is a terrible idea that has been opposed by ISPs and consumer groups. The government views this initiative as a revenue enhancing measure because it wants to direct gamblers to its own Espacejeux, the Loto-Québec run online gaming site. The mandated blocking legislation is unprecedented in Canada and if enacted, it will surely be subject to legal challenge, including the possibility of a constitutional challenge.
The legal challenge may not be limited to constitutional issues, however. The Quebec bill may also be blocked by the TPP, which may be a good outcome, but raises the question of whether a trade agreement is the right way to dictate provincial laws.
How might the TPP apply to provincial online gambling regulation?
CRTC Chair Jean-Pierre Blais traveled to Toronto yesterday to deliver a speech to the Canadian Club on television news in an era of change. The talk laid out his vision for the future of communications policy in Canada and feistily defended recent CRTC decisions for broadcast and the Internet. While there is much to like about Blais’ vision – CRTC skeptics will be surprised by the forward-looking approach – it will be lost in the chair’s unnecessary attacks on the industry’s efforts to slow the pace of regulatory change and use of the appellate process.
Blais’ speech tackles many of the big communications of the moment. He notes the need for more aggressive broadband targets and the real-world impact of leaving even a few percent of Canadians without Internet access. He rightly identifies the benefits of the forthcoming broadcast changes, including pick-and-pay and small cheaper basic packages. He argues that the days of simultaneous substitution are coming to an end (and not just for the Super Bowl), noting “squeezing every last drop of profit out of simultaneous substitution and rented, made-in-America content is no longer sustainable.” He is sensitive to the concerns on local television news, but warns of the dangers of government interference in the industry if independence is lost through direct funding mechanisms.
The Canadian battle over broadband services has taken an unexpected turn in recent weeks as Bell’s effort to win high profile support for its appeal of a crucial ruling issued by Canada’s telecom regulator appears to have backfired. After support from Toronto Mayor John Tory and Ottawa Mayor Jim Watson for the telecom giant came to light, city councillors in both cities fought back with motions rejecting the mayors’ positions and expressing support for more competitive Internet services.
My weekly technology law column (Toronto Star version, homepage version) notes that the issue started with a July 2015 Canadian Radio-television and Telecommunications Commission decision that extended policy measures designed to support independent Internet providers to emerging fast fibre connections. The ruling meant that Bell would be required to share their infrastructure with independent carriers on a wholesale basis. The policy guarantees Bell a profit on the connections, but also promotes increased competition that should provide consumers with more choice and better pricing.