Tuesday, 11 December 2012

The Wireless industry- an unfortunate oligopoly

Canadians are divided over the regulations to allow foreign owned companies to buy Canadian companies in the energy industry. However there is no outraged about regulations and operations of Canadian owned companies in the wireless and communication industry.

 The Canadian Radio-television and Telecommunications Commission ( CRTC ) seems to be blind to the way that companies in the wireless and cable industry operate. Increasingly politicians and consumers are getting restless about the contract terms and roaming fees. As for cable TV, the CRTC refused to allow the acquisition of Astral Media by BCE Inc., but will still consider the takeover if the bid is amended. If allowed this takeover will further shrink the number of companies. This $19.1 billion industry is an oligopoly tolerated by the government and the CRTC.

In the wireless industry, most if not all contracts demand that a consumer signs a three year contract. In the meantime as technology changes rapidly the consumer is boxed in and continuously pays more for the services. ‘Canadians look at consumers and services in other countries and are getting tired and frustrated with bigger bills, poorer service and limited choices. Data produced by the Organization for Economic Co-operation and Development shows that Canadians still pay higher prices than subscribers in the United States and Europe, While it may be a strategic move in his leadership campaign for the Liberal party, Marc Garneau, a former astronaut, has taken a stance regarding the wireless industry dominance, he said: , “I am doing what I think is important for Canada, important for the economy,” which he said was the “No. 1 priority” of his campaign
While The Hon. Marc Garneau advocates a more competitive industry by allowing multinationals to enter the Canadian market, it is unfortunate that a takeover by a foreign giant company is unlikely at this stage. The existing Canadian operators all own television distribution businesses. They are not only licensed by the CRTC but are also protected because of restrictions by foreign-investment laws under the Broadcasting Act.

The three year term contract is not the only complaints as almost 90 per cent of consumers want their wireless carriers to halt their data use abroad when they’ve spent a maximum of $50 on international data roaming fees. A recent survey found about 90 per cent of consumers had received a bill that was much higher than expected for international data roaming. , The Public Interest Advocacy Centre said that Canadians face cellphone bill shock while using their phones outside of Canada.

As for TV, Canadians are given very little choice. Often the same companies which provide them with their TV are also their internet and cellphone providers. The bundling of channels is full of programs which are duplicated and with several repeats during the day. Consumers are forced to buy certain channels as part of a bundle, yet these channels must carry a level of Canadian content. For example if you get BBC Canada, you now get a plethora of Canadian programs such as ‘Holmes this or that’ which has nothing to do with the BBC.  Mr. Holmes the construction guru already appears on other channels which are already offered through other bundles.  

While most American channels are offered as part of the mainstream, it is ironic that news channels are offered under different rules. For example CNN is widely accessible, yet Fox News must be bought as an additional channel not readily accessible by the masses. Therefore Canadian perception of U.S politics may be indirectly shaped, and influenced.

 The CRTC has a number of issues to look at in the new year; starting with the opening of the communication industry to foreign investors, followed by a revision of channel bundling by providers and the percentage of required Canadian content. They could include the limitation of long term contract and how customers are notified of international roaming rates in its new wireless code of conduct, .

The regulation of the industry is not and should not be one drawn on political ideology.   Rather the CRTC should look at how it can change this oligopoly into a more competitive industry to better serve the Canadian consumer.
Marcel Latouche

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