Peter Nowak has a great post that takes another look at the state of the Canadian wireless market. Nowak uses the latest data from Bank of America Merrill Lynch Wireless Matrix to find that the Canadian carriers’ ARPU ranks as the highest in the world, that profit margin is the […]
Post Tagged with: "Wireless"
Canadian Wireless Reality Check: Why Our Wireless Market is Still Woefully Uncompetitive
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.
CRTC Should Be Bolder With Wireless Code
The Canadian Radio-television and Telecommunications Commission unveiled its much-anticipated draft wireless code of conduct lasts week, offering a promise of new, enforceable protections for consumers. The draft code, which is open for public comment until mid-February, generated a mixed reaction. Some consumer groups welcomed it as a step in the right direction. But other commentators were left underwhelmed, disappointed that the code does little to address consumer frustrations with issues such as long-term wireless contracts and exorbitant roaming fees.
My weekly technology law column (Toronto Star version, homepage version) notes the draft code features some welcome changes to the current wireless landscape, including the possibility of consumer cancellation of contracts when providers change key terms, clear limits on contract termination penalties, and monthly bill caps when additional fees are incurred (thereby reducing the likelihood of bill shock after a trip abroad). Perhaps most importantly, the code is enforceable, backed by the possibility of monetary compensation of up to $5,000.
Yet the draft code ultimately disappoints, since its underlying philosophy is that consumer frustrations with the Canadian wireless market can be best addressed by more information.
CRTC Should Be Bolder With Wireless Code
Appeared in the Toronto Star on February 2, 2013 as CRTC Should Be Bolder With Wireless Code The Canadian Radio-television and Telecommunications Commission unveiled its much-anticipated draft wireless code of conduct this week, offering a promise of new, enforceable protections for consumers. The draft code, which is open for public […]
CRTC Pushes Bill of Rights for Consumers
My weekly technology law column (Toronto Star version, homepage version) notes the decision to embark on a national, enforceable code of conduct for wireless services supported by the wireless carriers represents a dramatic policy shift that was scarcely imaginable only a few years. Indeed, when then-Industry Minister Maxime Bernier pushed through a policy direction to the CRTC in 2006 aimed at limiting regulation by calling for “greater reliance on market forces”, consumer-focused regulations were viewed as an impossibility. Consistent with the market-led approach, the Canadian Wireless Telecommunications Association introduced a voluntary code of conduct in 2009 with no expectation of government regulation.
The move toward new regulations provides a valuable lesson on the role that the provinces can play to jumpstart otherwise stagnating issues. In the case of wireless services, the introduction of provincial consumer protections geared specifically toward the wireless sector ultimately encouraged the carriers to drop their opposition to new regulation as they recognized that a uniform federal policy was preferable to the emerging piecemeal provincial framework.
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