OPINION: Freedom may never be a fourth national player, and consumers need more data

By John Lawford, executive eirector and general counsel of the Public Interest Advocacy Centre I wish to address the recent opinion piece in The Wire Report from Robert Ghiz, CEO of the recently rebranded Canadian Telecommunications Association. Mr. Ghiz is a personable former premier of Prince Edward Island. Now he is a diehard advocate for the large companies in the Canadian wireless business and now the large companies in the home internet market. He says: “Simply put, since the Rogers-Shaw-Quebecor transactions were completed, Canadian mobile wireless users are getting more for less.” Indeed, he put it rather too simply. Consumers know Rogers Communication Inc.’s deal with Shaw Communications is bad for them because it is more of the same old thing. They know wireless prices and home internet prices are high. They know their bills. Mr. Ghiz mentions recent price reductions and bumping up data allotments on entry-level-only wireless plans since the Rogers-Shaw deal remixed the Canadian wireless landscape. He does not note that these are short-term defensive manoeuvres of the “Big 3” that cost them little and are designed to hobble Quebecor Inc.’s Freedom’s reboot. Yet Mr. Ghiz says, “With Videotron’s acquisition of Freedom, Canada now has four national service providers, along with strong regional providers that have brought additional competition to the regions they serve.” This is untrue now and may never be true. Freedom is far from being a fourth national player in all wireless markets. Freedom’s network and facilities (outside of Quebec) are limited to only certain parts of Ontario, Alberta, and British Columbia. Even with Quebecor’s 3500 MHz (5G) set-aside spectrum auction wins in western Canada, Freedom has a distinctly big job to be able to offer Canadians service nationwide. Quebecor does not have a national wireline footprint (that is what Shaw sold to Rogers out west). Wireless networks, and cheap home internet, require connections to the main head office computers of the parent company – which in this case is in Montreal – quite a distance from western Canada. So, absent very favourable regulatory rates, for a sustained period at favourable rates for “MVNO” access, roaming and other wholesale-based competition rules, Freedom will never be a ‘national’ fourth wireless carrier. After all, their main competitors do largely have such backhaul nationwide, whether through acquisitions like Rogers of Shaw, or a weirdly persistent “network-sharing” agreement between our two largest telco-based companies, BCE Inc. and Telus Corp., that lets them serve the whole country while only wiring half of it each. Despite tough talk by the government and Industry Minister François-Philippe Champagne, the new 2023 Policy Direction and a favourable CRTC decision granting Quebecor its preferred MVNO rate over Rogers’ (both secret, however, to the public), the Big 3 and other large cablecos have no end of court appeals, petitions to cabinet and good old-fashioned lobbying to use to reverse any gains made by Freedom or undeniably any independent local home internet providers that might get grandiose competition ideas. My skepticism about the possibility of Freedom being that fourth player and performing the function supposedly played by competition is not just based on the track record of the incumbents effectively killing all wholesale-based competition, but rather the nature of what we sell as telecommunications in Canada, how we sell it and why we sell it, no matter the “competitive environment.” Mr. Ghiz cannot see these concerns, or his lunch depends on not raising them, so I will. What we sell as telecommunications in Canada, particularly for wireless, is a privilege and wealth-soaked aspirational image, not primarily a means of communication. Premium smartphone-led super plans are advertised heavily and pushed by sales agents as a social status and a life(style) requirement. They market these packages to well-off Canadians and provide value only as part of a big spend. People who are new immigrants to Canada -- up to three per cent of the population, and who the Big 3 shamelessly cite as their only real engines of growth -- are offered devices and plans on second-tier flanker brands, typically with lower speeds (LTE not 5G, or even 3G) that still exceed their budgets while providing less data per dollar than “high-value” customers. Seniors and consumers wishing to unbundle services or have more basic services to control costs, such as tourists or temporary foreign workers, are pushed onto prepaid plans that have the highest connectivity costs. Other countries are better at consumer democracy than Canada – at least in essential services where ours are largely controlled by tight oligopolies. What democracy, power, and control of communications mean to consumers in the present era is affordable, easy, and adaptable access to data. That is what Canadians lament when they return from abroad or come here to live: that other countries give them more data for less money and just more data, period. Canadian wireless pricing, especially on data, according to two international market independent wireless consultancies, Rewheel and Tefficient, is effectively the most expensive in the world, but, perhaps more importantly, our mobile data usage is amongst the lowest in the world given the money the carriers make on it. It is also amongst the most restricted data in the world: our carriers can barely manage family share plans, and transferring usage amongst devices with eSIMs is almost unknown. Huge data buckets can be sold, but allotments typically cannot be rolled over to the next month, and speeds are throttled if they are exceeded. We use wireless data sparingly for fixed-wireless solutions that could help solve rural connectivity issues efficiently. Data-only plans are practically nonexistent in Canada after the CRTC fumbled nascent attempts for wholesale-based and other operators to introduce them. This means Canadians do not control their data - their communications companies do – and so the benefits of that data access, and the more egalitarian possible solutions that consumer control could bring to the market, are not in Canada. Mr. Ghiz says: “Just weeks after these transactions closed, prices for entry-level 5G wireless plans offered by Canada’s three largest wireless providers dropped by as much as 35 per cent and the price per GB of data fell by as much as 50 per cent.” This is both the truth and a lie. The truth is: it is easy to increase data allotments in Canada because they are so low (and to lower prices because they are so high). The lie is: the incessant obfuscation of the “price” of data. Not just Mr. Ghiz and the CTA but also StatsCan, and the present government all seem to think that when our data allotment goes from 20 GB to 40 GB that our price has dropped by 50 per cent. This is untrue, and the people know it. They know that telecommunications, like computers, should get faster and cheaper. They also know that their bills are the same afterward. The product is the same. The data will have doubled in a year, but they will still have the same bill with a smartphone payment and a high service cost for a very inflexible product. They will continue to lack control over the cost. When consumers lack any measure of control of essential service costs, it interferes with their use of communications to do other things, like education, health, civic engagement, employment, running their business, keeping track of their children or parents, or any number of social, political or economic things. Telecommunications should be an input into society, not a goal in and of itself. Yet this is what the industry celebrates, and the government unwittingly upholds with the competition model and its constant emphasis on facilities. To get different results that fit what consumers need from their essential telecommunications is to regulate in a manner that provides them with control of their telecommunications and to favour new approaches that achieve that goal. That may mean market reforms such as price regulation, wholesale regulation, structural separation, etc... Still, it may mean, more granularly and achievable, finding a way to get consumers cheaper and more flexible data. That likely means more service-based competition and true MVNOs. It could be regulations from the CRTC favouring such data freedom and increase as an overriding goal of every telecommunications ruling. The Tefficient consultancy has even claimed to find a correlation between countries with higher wireless data use and average revenue per user. Scarcity might hurt us all. So, instead of touting investment in the wires and towers as signs of the good times, which we know are not, Mr. Ghiz can try investing in the people next time. John Lawford has been with PIAC since July 2003 and executive director and general counsel since Sept. 2012. He is active in the areas of telecommunications, privacy and financial services from a consumer perspective. THE WIRE REPORT ACCEPTS SUBMISSIONS BY OUTSIDE CONTRIBUTORS WHO ARE KNOWLEDGEABLE ON THE SUBJECT MATTER DISCUSSED. SUBMISSIONS CAN BE SENT TO JCOCULLO@THEWIREREPORT.CA.

OPINION: Freedom may never be a fourth national player, and consumers need more data

News | July 28, 2023

By John Lawford, executive eirector and general counsel of the Public Interest Advocacy Centre

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OPINION: Freedom may never be a fourth national player, and consumers need more data

News | July 28, 2023

By John Lawford, executive eirector and general counsel of the Public Interest Advocacy Centre

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