Last week was a busy one in the wireless world in Canada. Just as people were debating the proposed Rogers – Shaw merger, the CRTC released its long awaited wireless decision involving the possibility of mandated MVNOs or mobile virtual network operators. While the CRTC notably concluded that Canadian wireless pricing is high relative to other countries and attributed that to insufficient competition, it ultimately was unwilling to fully embrace a broad-based mandated MVNO model. To help break down these recent developments, joining the Law Bytes podcast this week are Dwayne Winseck, a professor at the School of Journalism and Communication at Carleton University and the director of the Canadian Media Concentration Research Project, and Ben Klass, a senior research associate at the Canadian Media Concentration Research Project and board member at the Internet Society Canada Chapter. They both join the podcast in a personal capacity representing only their own views.
Post Tagged with: "Wireless"
The Law Bytes Podcast, Episode 83: Inside in the Industry Committee Hearing on the Proposed Rogers-Shaw Merger
When the proposed Rogers – Shaw merger was announced last month, it immediately became a flashpoint for Canada’s ongoing debate over wireless competition and pricing. The Standing Committee on Industry, Science and Technology moved quickly to put the proposed merger under the microscope with hearings that have included Rogers and Shaw along with academics, competitors, and regulators. I was invited to appear before the committee and provide my take on the implications of the merger. This week’s Law Bytes podcast goes inside the virtual hearing room with my short opening statement followed by clips of the Q &A with several Members of Parliament.
Having spent a good chunk of Monday talking to reporters about the proposed Rogers merger with Shaw, I thought it might be worth highlighting my initial three takeaways. First – and this is stating the obvious – the deal will result in higher prices and less competition. There is no need to overthink any of this. Removing a company that some have touted as the best chance at a viable national fourth carrier would leave some of Canada’s biggest markets (notably Ontario, Alberta, and B.C.) without a much needed competitor. Canadians already pay some of the highest prices for wireless services in the world and if this merger is approved, the situation will only get worse. Indeed, when Rogers promises that it will not raise prices for Shaw/Freedom Mobile customers for three years, it is effectively committing to raising them as soon as the clock runs out on that timeline.
Bains’ Other Wireless Affordability Problem: The Broadcast Panel Plan for WhatsApp, Skype and Other Internet Services to Pay Canadian Broadband Taxes
Navdeep Bains, the Minister of Innovation, Science and Industry today promoted the government’s plans for wireless affordability. The effort was largely an attempt to reiterate its wireless affordability platform, which targeted a 25 per cent reduction in consumer wireless bills by emphasizing more competition through MVNOs and spectrum set-asides. The renewed emphasis on the policy comes as an updated Wall Report finds that prices have been declining in some baskets (the long-overdue emergence of unlimited-ish plans a key factor), but not in the core middle tier of plans where prices remain high. The government states “Canadians have been paying more overall compared to consumers in other G7 countries and Australia” and noted that the government will track pricing on a quarterly basis starting from January 2020. Coming on the heels of threats from incumbent telecom companies such as Telus, it was good for the government to re-assert its policy objectives for the sector.
The big headline story from the first week of the CRTC hearing into the wireless market was undoubtedly Telus CEO Darren Entwistle closing hours of testimony with a threat to slash investment and jobs if the Commission follows through with a mandated MVNO model. Entwistle told the CRTC:
There’s been a lot of conjecture related to disinvestment or reduced investment. It’s been a high topic related to what will happen as it pertains to MVNOs being introduced or another 25 percent price reduction being enforced, having already bettered the existing one that’s in place. And there are some views that this is just theatre perpetrated by the incumbents, in that if mandated MVNOs come to fruition or there’s an enforced second tier 25 percent reduction we will go on with status quo investing.
So one of the additional things I would like to file with you in confidence that I brought here today is a Board resolution at TELUS signed by all of our Board directors instructing management to pursue an investment reduction plan and a job reduction plan and a philanthropic giving reduction plan should these eventualities present themselves. And we’re discussing numbers where the reduction, and we’ll go public with it, but I’ll file with you the Board resolution, in the vicinity of a billion dollars of reduced investment over the next 5‑year. The reduced employment is in the zip code of 5,000 jobs over the next 5‑years.
In other words, in a bid to demonstrate that this was not theatre, Entwistle engaged in theatrics by pointing to a resolution from a board of which he is a member that supports his case.