Low-cost data plans need higher caps, lower prices, CRTC hears

The Competition Bureau is among those who are telling the CRTC that mandated low-cost, data-only plans should have more data on offer, in a move that raises the stakes of the regulator’s proceeding on the plans, according to a Desjardins Capital analyst. The bureau said in an intervention that it is “not obvious... why Plans should not feature a variety of capacity limits, stretching into multiple gigabytes per month.” In March, the CRTC ordered Canada’s large telecoms to file proposals for lower-cost, data-only plans. When they did so in April, Rogers Communications Inc. proposed a $25 for 400 MB per month plan; BCE Inc. a $30 for 500 MB plan through its flanker brand Virgin Mobile; and Telus Corp. suggested a $30 for 500 MB plan through Kodoo and a $30 for 600 MB plan through its Public Mobile flanker brand. Interventions on those proposals were due Wednesday. The Competition Bureau told the CRTC that although it doesn’t normally favour price controls, the regulator should institute low-cost data plans as a “temporary solution to competitive issues brought about by the existence of market power in this industry.” It said that while such plans are not a substitute for true competition, they should be put in place until the CRTC can “establish longer-term, more robust solutions to competition problems and other public policy issues that may exist in this marketplace.” In a research note Thursday, Desjardins Capital analyst Maher Yaghi said the bureau’s comments add weight to other interventions the CRTC has received, even though the commission isn’t obliged to follow the Competition Bureau’s suggestions. Yaghi noted the current consensus is that the process is likely to lead to low-cost data-only plans with small data offerings, not larger data buckets “where incumbents make the bulk of their money.” “At this point, we are not changing our forecasts as it is difficult to predict the CRTC’s decision; however, we suggest investors keep an eye on the proceedings as the stakes have now become a little higher with the Competition Bureau’s intervention,” Yaghi said. The Canadian Internet Policy and Public Interest Clinic (CIPPIC) and advocacy group OpenMedia said in a joint intervention that the proposed data buckets are too small and the prices too high. “The data plans submitted by Bell, Rogers, and Telus contemplate 400-600 MB of data per month. However, the average Canadian consumer uses about 1.5 GB of data on a monthly basis,” they said, citing usage by Canadians with plans that also include voice and texts in 2016. Carleton University PhD candidate Ben Klass and professor Dwayne Winseck suggested in a report commissioned by Consumers’ Association of Canada Manitoba Branch and submitted as part of the proceeding by a Manitoba-based coalition that the plans on offer should start at 250 MB for $5, and go up proportionally in increments, up to 5 GB for $45. They said their proposal “provides smaller amounts of mobile data at affordable rates, while at the same time ensuring that people who require larger amounts of data pay existing rates. Even at the lower combinations of price and usage, this plan is designed to provide a return to carriers that is more than remunerative with respect to the cost of building and maintaining their respective mobile communication networks.” At the same time, it would provide lower-income individuals “with flexibility with regard to usage while offering service at rates that are more affordable than those already found at the market,” the report said. There is a problem when it comes to to mobile service adoption, especially when it comes to low-income individuals, Klass and Winseck said, outlining data from Statistics Canada that shows that households in the lowest income quintile, or those who earn less than $32,090 per household, have a mobile subscription rate of 68.7 per cent, compared to households in the second-lowest quintile, whose subscription rate was 85.6 per cent, while adoption in the top three quintiles ranges from 92.7 per cent to 96.4 per cent. OpenMedia and CIPPIC aimed for higher data buckets, arguing that data-only usage plans shouldn’t be lower than 6 GB a month, in order to align with how much data the average Canadian is expected to use in 2019. The Public Interest Advocacy Centre (PIAC) also said the “data allowance proposed by the Commission is insufficient to meet the mobile data needs of most Canadians. While there may be some interest in a 500 MB at a more reasonable price point (~$8/month), one or more plans with a higher data allowance should also be mandated.” It suggested that, for 4G plans, 100 MB be priced at $5.65 a month, 1 GB at $11.62 a month, and 10 GB cost $71.15 a month. The Forum for Research and Policy in Communications (FPRC) pointed out that not only “are people throughout Canada increasingly relying on higher volumes of mobile data every year, but more vulnerable or marginalized communities are overrepresented among those who rely exclusively on mobile wireless services to remain connected, such as low-income households, new immigrants, and those seeking employment.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca

Low-cost data plans need higher caps, lower prices, CRTC hears

News | June 14, 2018

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Low-cost data plans need higher caps, lower prices, CRTC hears

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