In the aftermath of the CRTC’s hearing on a consumer wireless code and the government’s announcement of its plan for future spectrum auctions, a debate has raged over the competitiveness and health of the Canadian wireless market. Scotia Capital released a report last week titled “Canadian wireless myths and facts” that argued the Canadian market is healthy and that “it is time for the regulators to declare victory on the policies they adopted five years ago”. Meanwhile, Open Media issued a report titled Time for an Upgrade: Demanding Choice in Canada’s Cell Phone Market that places on the spotlight on many of the ongoing problems in the market, with a particular focus on consumer complaints. The report includes many recommendations for regulatory and policy reform.
The reality is that both the regulators and politicians have either expressly or impliedly acknowledged that the Canadian wireless market is uncompetitive. Last week, Industry Minister Christian Paradis promoted the government’s past moves on wireless competition, but admitted that “there is much more to do.” Meanwhile, the Competition Bureau told the CRTC in its submission on the wireless code of conduct that:
certain impediments continue to diminish the effect of competitive forces in this industry. First, certain industry practices have tended to impose costs on consumers who wish to avail themselves of competitive alternatives. Second, consumers are not always provided with sufficient information in an adequately clear manner to make informed purchase decisions.
This post seeks to extend the debate and respond to some of Scotia Capital’s claims. It identifies ten reasons why there is ample evidence that the Canadian wireless market remains woefully uncompetitive when compared with peer countries around the world with higher costs, price gouging, and restrictive terms.