Canadian Government threatens the "Big 3" cellular provider to cut their prices by 25% ... Or else!

[kokakolia]

This policy is horse poop! 25% discount on a service that's horrendously overpriced already!? You're still bowing down to the monopoly of the big three. Further, the big three will just jack up the price later. Because who is going to stop them?

 

If you really want to make a difference in this country, you should start by founding state-owned comapnies for all services. Saskatchewan has far better cell phone plans than most other provinces thanks to Sasktel! Sasktel is not trying to rip Candians off because they're not a private company trying to monopolize and jack up the price. And nobody in their right mind would say that Sasktel isn't profitable or providing bad service. Otherwise Rogers, Bell and Telus wouldn't be "inconvenienced" to lower their prices in Saskatchewan. 

 

Case and point: just go to the Koodo website and look at cell phone plans from Alberta VS Saskatchewan. Saskatchewan plans are half the price. 

 

And it's not like Saskatchewan is much different from Alberta in terms of climate, density and economic activity. The two provinces are virtually indistinguishable. So the whole population density argument to justify the high costs is BS. 

 

We should never let private companies run the utlities like the internet, water and electricity. Because you'll guarantee an oligopoly between several companies. 

[Engineer.AI]

I feel that this should otherwise be a great ruling, but the 'trickle down' aspect of it is damaging the people. In India, we pay the least for Broadband and Data, but that has cost small time providers to drop out of the race in favor of another BIG 3 in the telecom dept. We also had a socialist democracy before the current government sold off our public sectors towards private greed.

~Engineer.AI

[Touch My Hamm]

On 3/6/2020 at 6:11 PM, dizmo said:

Uh what? I've lived in rural areas in northern Canada and it's not any more expensive than a city. Province to province is the only place I've seen it differ.

I should have been more clear. When I meant nowhere Canada I kinda meant NWT as a inside joke. Depending on the infrustructure it could change city to city but they try to keep the same prices but if the city.town is not equipped it can change the costs. When I lived in Small town Sask years ago the cost for internet was more than in one of the major cities. The different was around $10-20 a month depending on the plan.

[straight_stewie]

On 3/6/2020 at 2:43 AM, wkdpaul said:

if that doesn't happen, they'll use the CRTC (the regulatory board for telecommunication) to make sure they won't have access to new broadcast band that will become available (5G).

I'm not sure that that's strong enough. The Big 3 could always just say "well, I guess Canadians don't want 5G then" and just keep doing what they are doing. That would save them the expense, headache, and initial investment of building a large new infrastructure anyway. Keep in mind, Canada can't just tell them to close their doors, then Canadians wouldn't have cell phone networks (and would probably lose one or two tier one or two ISPs as well, if they are set up the same way as US telecom providers anyway). Even if the government did shut them down (through whatever means), there's no requirement that a company being forced to close liquidate their assets, they could be dicks and just scrap their assets and end the rental contracts/sell the land, which would severely hamper infrastructure repair efforts if the Big 3 did close down.

 

I think what would be more effective would be to say something like "you cut your prices for these services by x percent or we will raise your tax rate across the board by x percent." Effectively, make it more expensive for them not to do it than it would be for them to do it.  I'm not up to speed on how the Canadian government works, so I'm not sure if they could actually pull the targeted tax hikes off. I know that in the US that would be basically an empty threat, because there's no way enough members of the legislature would get behind that.

 

 

[WkdPaul]

@straight_stewie

 

5G would still happen though, since the government are putting the bands up for auction, what would happen is all the smaller provider would get their hands on the 5G bands and the Big 3 would then be stuck renting the bands from other providers.

 

While they complain, renting out part of their network is a big recurring income, and they would lose money on that.

[Kisai]

28 minutes ago, gabrielcarvfer said:

And it totally makes sense. That is exactly why researchers are working on larger cells (e.g. 50 km radius supercell in purple). 

A Supercell simply won't work in BC. BC isn't flat. There is nothing stopping Telus/Rogers from having towers in the middle of nowhere but power access. 

28 minutes ago, gabrielcarvfer said:

 

 

Just saying: the government can, and will, use that same argument against you/your business/etc.

 

It's not a crime to make money, but it is a crime to collude and fix prices, which is exactly what goes on in the US and Canada. Seemingly strange how prices where there is good internet connectivity are all conveniently lower (eg Saskatchewan, places with Fiber internet), but places that only have the big-3 carriers all have the same prices. This isn't competition, this is collusion.

 

You can see this exact thing with gas stations in every city. Two gas stations across from each other are rarely a different price, yet go to the next city over and the prices might be different. Recently in BC they basically did an investigation and found like 25% of the price of fuel was completely unexplained, so they cut the prices, a bit.

 

A certain level of transparency does not exist with wireline and wireless companies. It certainly does not cost them $70 per customer to operate when a prepaid account can cost $5/mo. It only cost them energy (which means it might only cost them $50 per cell site per month if they were paying retail energy rates, which is more than made up by having at least one customer per cell site) Those MSC/Tower locations do not use as much energy as 500 sq ft apartment. What costs them money is the property leases in major cities. It costs them practically nothing to have a MSC out in the middle of nowhere surrounded by a fence. So to argue that "oh, it's too expensive to cover the boonies" is utter BS. No the expenses are all very much centered on the population centers where they had to negotiate some good and bad contracts with individual property owners.

 

[straight_stewie]

8 minutes ago, wkdpaul said:

what would happen is all the smaller provider would get their hands on the 5G bands and the Big 3 would then be stuck renting the bands from other providers.

I guess that depends on the analysis of the smaller providers. It may end up that the Big 3 think that the smaller providers would take too long to actually build enough infrastructure for 5G to be truly marketable (as in, 5G is available in most places) or think that they might never be able to build useful 5G infrastructure. In which case they would just try to buy the smaller providers after they secure the 5G bands at their auction and fail to successfully build large networks. That would actually be somewhat of an ideal solution because they would be getting rid of competitors and getting 5G all without having to comply to the governments pricing demands.

No matter which way you slice it, it's risky, and the end result could go either way.

Of course, I make all these arguments, and it could be the case the the Canadian government is right and the big 3 are just gouging customers so badly that they can reduce the prices for these services by 25% and still be profitable. The assumption that I'm making here is that a 25% reduction in pricing would severely hamper the Big 3 (which is likely a bad assumption), and so they would be willing to fight it strongly.

[Kisai]

5 minutes ago, straight_stewie said:

I guess that depends on the analysis of the smaller providers. It may end up that the Big 3 think that the smaller providers would take too long to actually build enough infrastructure for 5G to be truly marketable (as in, 5G is available in most places) or think that they might never be able to build useful 5G infrastructure. In which case they would just try to buy the smaller providers after they secure the 5G bands at their auction and fail to successfully build large networks. That would actually be somewhat of an ideal solution because they would be getting rid of competitors and getting 5G all without having to comply to the governments pricing demands.

No matter which way you slice it, it's risky, and the end result could go either way.

Of course, I make all these arguments, and it could be the case the the Canadian government is right and the big 3 are just gouging customers so badly that they can reduce the prices for these services by 25% and still be profitable. The assumption that I'm making here is that a 25% reduction in pricing would severely hamper the Big 3 (which is likely a bad assumption), and so they would be willing to fight it strongly.

It would almost certainly result in a repeat of what Shaw did the last time. Shaw bought a bunch of spectrum, then sat on it until they ran out the clock and sold it to Rogers. So the only carrier that came out of that spectrum auction was what was then Wind mobile, who Shaw ultimately bought. Such a pity that they didn't hold onto that spectrum. This is why Freedom (formerly Wind) has utterly terrible coverage.

 

Years ago, Rogers and Fido were separate carriers (Fido was also known as microcell, and that is what their GSM id was on devices that didn't have updated roaming data.) Rogers somehow was able to buy Fido. Telus was able to buy their way into the Central Canada market by buying what I think was called Public Mobile. At any rate, Fido much like Freedom now, used to have utterly terrible single-band coverage only in city centers.

 

And that is what will happen yet again. The big 3 will sit on their hands, while some "4th carrier", or handful of regional 4th carriers build some major-population center coverage, and then once the clock is run out, they will sell themselves to Rogers again.

 

[miagisan]

I wish the government in the US would at least break out the monopolistic tendencies these telecom companies have. Even here in NY, they buy permits to lay down their infrastructure then, basically "buy" the local governments to prevent any outside telecom from installing their infrastructure, thus locking out all competition. This suck, and these companies rake us over the coals with their fees.  Because they can.  

[Kisai]

9 hours ago, gabrielcarvfer said:

Do broadcast TV or radio work? I would expect them to work. It's basically the same infrastructure. We have fairly rugged topography and field tests shown that it works. In the worst case scenario, you won't get the 50km, but may get 20~30km, which are way higher than the standard 3~5km.
There is something stopping them, capex and opex.

 

Those prices are not result of price fixing or collusion, it's the equilibrium point. It's high due to the oligopoly. Never compare wired connections to wireless, those are completely different beasts. In wired you just put another cable and boom, additional bandwidth, which is not the case for wireless. The lack of competition due to spectrum licensing stupidities is the source of the issue, and it won't be solved until governments stop trying to make money out of it instead of focusing on the public and the service they receive.

The thing is, in Canada, the wireline and wireless providers are all one and the same, unlike in the US where that only applies to AT&T and Verizon. In Canada it's a pair of duopolies on the east and west coasts. With Bell and Rogers (or Videotron in Quebec) having the entire market to themselves, and Telus and Shaw having BC and Alberta completely to themselves. Only Rogers has usable service outside their home wireline service area. Telus does in fact have service in Ontario and Quebec, but only by virtue of buying one of the 4th carriers some time ago. Wireline service in BC is only Telus or Shaw (who operates Freedom Mobile). Unless you live in a Condo building built after 2001, in which case you might have a third option (usually Novus), but sometimes Telus or Shaw runs their own Fiber to the building and has exclusivity agreements with the condo developer/strata so you end up with only ONE option.

 

It's kinda funny actually, because if you live in any of those condos you can pretty much get Telus or Shaw to give you a massive discount to get you as a customer. 

 

But you're still SOL for wireless.

 

As for the question about does Broadcast TV or Radio work. Not generally no. You might luck out and get AM radio to the mountain peak but then it's gone when you get into the next valley. Usually people make use of their CD/mp3 players when they drive in BC outside the Metro Vancouver, because the radio stations tend to be unavailable through most of the drive, Sirius/xm is sometimes functional but usually the tree cover in some areas makes it unusable as well. As for Broadcast TV, the last time I tried to access analog TV before the analog shutdown, I could get a very noisy picture from CBC, and that was about it. 

 

As far as I know, 

[WkdPaul]

Didn't know (and not sure where the source is from), but they have around 40% average profit margin (the big 3s) ... Highest was 45% in 2017. That's VERY high!!!

 

 

 

That explains why smaller providers that rent bandwith from the big 3s can offer such lower prices!

[Mnky313]

Now if only the US would do the same, oh wait, they were too busy fabricating votes to end net neutrality and now they are too interested in stealing your data and false advertising their unlimited^* data plans that cap after a dozen or 2 gbs....

[Donut417]

1 hour ago, Mnky313 said:

Now if only the US would do the same, oh wait, they were too busy fabricating votes to end net neutrality and now they are too interested in stealing your data and false advertising their unlimited^* data plans that cap after a dozen or 2 gbs....

More like 20 - 50 gigs in most cases. And unlike Comcast your not charged more if you go over. Also unlike Canada the Big 4 allow smaller carriers to lease network time, so we do have a bit better competition. 

[-rascal-]

On 3/8/2020 at 11:50 PM, Kisai said:

Telus tried to sell me one for $75. (It's only $5 more than what you pay now), I was like "uh what I would really like is for you to honor the original 10GB promo from 2017 for $60."

 

Screw them, screw them all. All the "unlimited" plans are just the previous data capped plan, just now they won't charge for overage, they will just throttle your bandwidth down to dialup levels.

 

 

Oh yeah, they jacked the price up for that 10GB / $60...so stupid.

One of the "Big 3's" ramped the price up to $75, the other 2 follow suite.

 

They are saying they are competing with each other...

But when Sprint (or Verizon?) tried to enter as a 4th carrier in Canada a couple years ago, ALL 3 of them assembled together and pushed against that.

They were saying it would drive costs up, something about competition, and other BS.

Uh...it should drive costs DOWN... 

 

Quote

Talk of a possible Verizon entry into Canada set off a heated war of words involving the existing three major players in the Canadian wireless market — Rogers Communications Inc., BCE Inc. and Telus Corp. — against the federal government.

The companies launched a public relations campaign in which they argued that government wireless policy would give an unfair advantage to a foreign company that wanted to enter Canada. 

https://www.cbc.ca/news/business/verizon-not-entering-canada-s-wireless-market-after-all-1.1339361

 

Quote

The Big Three -- Bell, Rogers and Telus -- have a combined 90 per cent market share. They have spent much of the summer telling consumers through an ad campaign that Verizon’s entry into the wireless market would be "unfair" and cost Canadian jobs.
 

Meanwhile, critics of the Canadian telecom industry said the entry of Verizon would force the Big Three to offer better services and rates.
 

https://www.cbc.ca/news/business/verizon-pullback-a-blow-to-canadian-wireless-consumers-1.1346672

 

[ARikozuM]

49 minutes ago, -rascal- said:

 

Oh yeah, they jacked the price up for that 10GB / $60...so stupid.

One of the "Big 3's" ramped the price up to $75, the other 2 follow suite.

 

They are saying they are competing with each other...

But when Sprint (or Verizon?) tried to enter as a 4th carrier in Canada a couple years ago, ALL 3 of them assembled together and pushed against that.

They were saying it would drive costs up, something about competition, and other BS.

Uh...it should drive costs DOWN... 

 

 

 

Costs would remain the same, but margins should go down. This is why I think socializing the system is better, especially if it comes with protections for speech, traffic, and a sizable dividend for the populace at tax time. 

[mr moose]

On 3/9/2020 at 8:06 PM, kokakolia said:

This policy is horse poop! 25% discount on a service that's horrendously overpriced already!? You're still bowing down to the monopoly of the big three. Further, the big three will just jack up the price later. Because who is going to stop them?

 

If you really want to make a difference in this country, you should start by founding state-owned comapnies for all services. Saskatchewan has far better cell phone plans than most other provinces thanks to Sasktel! Sasktel is not trying to rip Candians off because they're not a private company trying to monopolize and jack up the price. And nobody in their right mind would say that Sasktel isn't profitable or providing bad service. Otherwise Rogers, Bell and Telus wouldn't be "inconvenienced" to lower their prices in Saskatchewan. 

 

Case and point: just go to the Koodo website and look at cell phone plans from Alberta VS Saskatchewan. Saskatchewan plans are half the price. 

 

And it's not like Saskatchewan is much different from Alberta in terms of climate, density and economic activity. The two provinces are virtually indistinguishable. So the whole population density argument to justify the high costs is BS. 

 

We should never let private companies run the utlities like the internet, water and electricity. Because you'll guarantee an oligopoly between several companies. 

 

Publicly owned companies aren't always cheaper.  Usually when the government owns a company it becomes slow and bloated, good service/product but you pay for it.   Privatizing companies rarely result in a cheaper service for the consumer either. 

[Donut417]

1 hour ago, mr moose said:

Usually when the government owns a company it becomes slow and bloated, good service/product but you pay for it.

Yes, but they are not out to make a profit. 

[WkdPaul]

7 minutes ago, Donut417 said:

Yes, but they are not out to make a profit. 

You sir, are not familiar with Hydro Quebec!!

 

Even though they're a government entity and are regulated by laws that prevents them from making more than a precise margin, they were still able to over charge their customers, totaling $1.5 billion (in over charge) ... They only operate in one province of 8 millions ... So yeah.

Edited March 12, 2020 by wkdpaul

[Donut417]

Just now, wkdpaul said:

You sir, are not familiar with Hydro Quebec!!

 

Even though they're a government entity and are regulated by laws that prevents them from making more than a precise margin, they were still able to over charge their customers, totaling $1.5 billion ... They only operate in one province of 8 millions ... So yeah.

How else do you expect them to maintain and upgrade the grid? Gotta get the money from somewhere. I find it interesting its owned by the government. Where as in the US these are generally private companies who have heavily regulated. 

[WkdPaul]

42 minutes ago, Donut417 said:

How else do you expect them to maintain and upgrade the grid? Gotta get the money from somewhere. I find it interesting its owned by the government. Where as in the US these are generally private companies who have heavily regulated. 

I'm talking $1.5B in overcharge (over a few years), not net profits or revenue, literally overcharges.

 

Their total revenue for 2018 was $14.37B, and $13.47B in 2017, with net profits always above $2B (they have to give an amount to the provincial gov every year, also in the billions, without that "disguised tax", the real net profits is closer to $4B) even if it's a government entity (and a monopoly BTW), they are heavily regulated and the law states an exact profit margin they're allowed (that's of course after the provincial gov got their cut!) above that and they have to issue credits, that's the $1.5B I'm talking about here

 

But I'm not complaining because we pay a few cents per Kwh (¢6.08 for the first 40 KwH, and ¢9.38 for anything above, per day). My average in winter is between ¢7 and ¢8 per KwH

 

my point was that, even if it's a government entity doesn't mean the government isn't going to turn it into a cash cow like Qc did with it's Hydro company.

Edited March 12, 2020 by wkdpaul
Typos

[GoodBytes]

1 hour ago, wkdpaul said:

You sir, are not familiar with Hydro Quebec!!

 

Even though they're a government entity and are regulated by laws that prevents them from making more than a precise margin, they were still able to over charge their customers, totaling $1.5 billion (in over charge) ... They only operate in one province of 8 millions ... So yeah.

Actually, it pays services as well. And considering that we have an excellent power network, even model, and that we pay the least of the great majority of countries at the residential area, shows you how much money others are making.

[Andreas Lilja]

Isn't Hydro known for outages?

[mr moose]

2 hours ago, Donut417 said:

Yes, but they are not out to make a profit. 

Profit is one of the smallest factors in end cost.  Especially when you have to maintain a bloated workforce over engineered QC program.

[LarryBC]

I feel like everyone needs to be aware the media is horribly misinformed in this story. They quote real current plan rates and cut them by 25% to give an estimate of how much this mandate should cut down on phone bills. That is not how this story should be written.

 

https://assets.ctfassets.net/8cecwr1x4jkf/4qecdQdkcR6Vx2bgYzj8sP/583ea8342e9631b3daac170c4dae005f/BG_EN_Cell-Phone-Bills.pdf
 

here is the actual mandate by the Liberal party. In which they are basing the 25% cut on some kind of assessment that the average pricing is as follows:

 

2gb plan - $1810 per year/$150 per month, to be cut to $113 per month

5gb plan - $2095 per year/$174.50 per month, to be cut to $131 per month

 

These are for phone plans. I dunno who is actually paying 150 bucks for a 2gb plan?

 

Cell providers are posting on their websites that they already not only already meet these price cuts but GREATLY exceed them. $50 for a 2gb plan seems high? Well actually we deliver 56% better savings than the Liberal party’s mandate! Isn’t that amazing?!

 

This mandate is doing absolutely nothing to cut phone bills and never will. It’s just giving cell providers marketing to make their plans as seem affordable.

[WkdPaul]

1 hour ago, Andreas Lilja said:

Isn't Hydro known for outages?

Not that I ever heard of.