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Ottawa loosens rules on telcos

SIMON TUCK AND CATHERINE MCLEAN

Globe and Mail Update

Latest comment posted at 8:27 PM EDT 12/12/06

Bernier changing definition of competitive market ...Read the full article

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  1. 20 20 from Canada writes: I feel this article does not provide us with enough information: we need some data on how much competition there is or isn't. For example, when it states that 'Montreal will likely be the first major Canadian market to reach the 25 per cent threshold', does that mean that the incumbent Bell Canada still controls over 75% of the market there? If so, why should the Harper Conservatives be giving in to the big phone company lobbyists? And what's Mr. Bernier's next move, opening our vital communications infrastructure to foreign control? Let's get them out of office before they sell out too much of Canada's sovereignty from under us.
  2. Norman Dupuis from Calgary, Canada writes: This is becoming a typical move for the Conservatives: walk into an area where your idealogy isn't being implemented and take over by force. It's happening with the Canadian Wheat Board, and now the CRTC.

    Conservatives just can't pander enough to big business, can they? The CRTC knew that without controlled deregulation, large suppliers like Bell and Telus would simply walk into urban markets where they had lost market share, drop their rates for as long as it took to drive the small telcos into bankruptcy, and wind up with monoplies again.

    Prime Minister Harper must hear the clock ticking on his minority government. Time to fill the trough before his pathetic mandate is finished.
  3. Chris Hay from Regina, Canada writes: The CRTC ...'ruled last month that the telcos will now be allowed to change their local charges simply by releasing a notice at the start of the day that the change will take effect'. And 'Mr. Bernier plans ...an end to so-called 'winback' rules that prevent the former monopolies from approaching local phone customers for three months after they leave.' How wonderful! It's obvious that we the consumer are definitely not a concern to either the CRTC OR the Minister. Now we are faced with a 'sorry jack, your rate doubled and pay now, complain later... and if we switch we can have those wonderful all disturbing telemarketing calls to woo us back.
  4. paul lailey from Vancouver, Canada writes: Competition is a good thing and only Liberal supporters could spin this as pandering to big business. It is refreshing to see a government that looks out for the average citizen after years of seeing the Liberals look out for their own.
  5. Brad Buss from Toronto, writes: Land lines arent the problem. The problem is cell phones. Open up this area and level the playing field. The oligopoly is ridiculous with bills being double!
  6. Kevin Thompson from Vancouver, Canada writes: The move by Mr. Bernier and the Conservative government towards an open telecom market is a good move for business and for consumers. It is interesting to note that both the Conservatives and the Liberals support such a move as the Conservatives are acting on recommendations of a Liberal-appointed telecom panel.

    The telcos will be better equipped to compete for business in the local phone market to try to win back customers they have recently been losing to the less strictly regulated cable cos and smaller VoIP players. It is only right that the telcos be able to compete for business on an even playing field, despite their dominant market position. Both telcos and cable cos will continue to be monitored for anti-competitive behaviour and be penalized accordingly for any infractions.

    Consumers will welcome the likes of Bell, Telus, Manitoba Telecom, and other incumbent telcos' right to drop their prices on local phone services that have been kept artificially high by the CRTC in recent years. Prior to the entry of the cable cos into the local phone market, the telcos had no incentive to drop prices as they held monopolies; however, market conditions changed and the telcos were prevented from adapting. Economists and industry players can aptly argue in favour or against CRTC intervention in the market, but consumers simply want to see lower prices for the services they depend on and will likely benefit from the changes announced today.
  7. Remain Nameless from Canada writes: #2, I disagree with you. The 'small telcos' to which you refer are Rogers cable and Videotron cable. Both are big boys and do not need protection. CRTC pandering to the cable industry made Ted Rogers one of the wealthiest Canadians, worth several billion dollars. Cabelcos ave a network that rivals Bell's (in large urban areas), yet the CRTC deregulated cable shortly after satellite TV was alunched in 1997.
    The Minister's announcement makes a whole lot of sense to me. Prices will go down, not up as a result of this announcement. Competition will govern prices, not a bunch of appointees in Ottawa. Meanwhile, Bell wil continue to be regulated in marekts where cable does not offer telehpnoe service. Consumers win; bureaucrats lose. Sounds good to me.
  8. reg gert from Canada writes: By 'small telcos' I assume correspondent #2 is refering to Shaw and Rogers two of the most profitable and rapidly growing companies in Canada? Both of whom,incidentally, have profited mightily from the CRTC'S protectionist policies in the cable industry.
  9. Bill G from Canada writes: Good move! Currently the Telco's cannot reduce their local phone prices to compete with cable. This move will stimulate competition instead of cementing the status quo. While the Cableco's are increasing their market share, they're not doing the consumer any favours with their pricing. Once the Telco's start to drop their local phone pricing, things will get interesting.
  10. Douglas MacDONALD from edmontonedmonton, Canada writes: Any time govts starts deregulating people should be wary as this is just a code word for higher consumer prices just look at what happened in AB. when key industries were deregulated the consumer paid more and continues to pay more.
  11. L. S. from Waterloo, Canada writes: While I'm all for lower prices I don't get why they would eliminate the time frame in which you can be called by the people you just switched from. If I changed, I do NOT want to hear from you the next day telling me all the reasons I should come back!
  12. Jim Goodwin from Canada writes: Where are the house votes on these IMPORTANT issues. The wheat board and CRTC are there for good reason.
  13. Someone Canada from Canada writes: What is #1 talking about. Once again another poster who knows not what he talks about.

    First, don't paraphrase a sentence to suit your needs. He did not say 'Montreal will likely be'.. He said Toronto and Montreal will likely be. What are you talking about selling our communication infrastructure to foreign interests? Where did it even mention that. IT DIDNT!!! What does sovereignty have to do with communications. We aren't selling anything. Please don't post stupid remarks. You only look like a fool.

    To the rest of the posters Rogers is not small. As a telco yes, but not as a wireless or cable company. Why are the telco's treated this way but no one else. Competition lowers prices not raises them. Why do people that know nothing about business post and read the business section.

    The CRTC is old and outdated and needs to go away.
  14. Norman Dupuis from Calgary, Canada writes: To reply to posters 7 and 8: Shaw, Rogers and Viedotron may be 'big' businesses, but not in voice communications. And no combination of any or all of the three own more than 25% of any urban market despite regulation fron the CRTC. A company holding a monopoly isn't never going to voluntarily allow competition in its market. So without regulation the consumer gets one provider, which is not a choice at all.

    One of the myths surrounding deregulation is lower prices for the consumer (see: power deregulation in Alberta). At this stage in their business cycle, these smaller providers have to offer lower prices and superior service to gain market share. Regulation allows them reasonable cost of entry into the market. Allowing former monopolies to drive them out of business, only to pay for the cost of that action with increased fees from a newly choiceless market can hardly be seen as good for the consumer. Unfettered capitalism never works for the consumer. Ever. It drives all markets towards monopolies.

    Frankly, I don't care if Bell, Telus, Shaw, Rogers, Videotron or Bob's Telephones makes it or not. My post expressed concern for the Conservative's habit of taking a hammer to anything it is idealogically opposed to. In a minority government it's not what one could call a survival skill.
  15. Marc D from Canada writes: How is cable competing with local phone providers? I've in an area with Shaw cable, and I STILL can't get a local phone service from anyone other than Telus, a company I would love have take a long walk off a short pier with cement shoes. This only works for the large metropolitain centres. The rest of the country is about to get seriously screwed. Again.
  16. Brad Reddekopp from Hazelton, Canada writes: This is a good start. Free the markets and you free the people. Give me more!
  17. Dan Weagle from Halifax, Canada writes: #1, '20 20', I trust that refers to your eyesight and not your foresight. First, you acknowledged that you aren't given enough information by the article and yet by the end of your speel you are fully 'informed' enough to render conclusions. The only part of the article it appears you read, you misunderstood, as it in no way suggests that Montreal will hit the currently legislated 25% 'competitive' mark, rather that it will be obvious that there is sufficient competition in the market currently that percentages aren't relevant. Bottom line is that this decision will be a win for consumers. The same tired arguments that it will allow the large telcos to again grab monopolistic pricing powers is ludicrous. These are the same people who holler at Wal-mart for trying to drive the competition out of business by saving consumers money...I'm still waiting for Wal-mart to gain that monopoly and jack up prices...all the while I'm reaping the savings :)
  18. Paul who is from Vancouver, Canada writes: [QUOTE: While Telus and Bell wouldn't comment directly on whether rates will fall when regulatory restraints are lifted, they said they will gain flexibility in their pricing and bundling services.]

    Analysts say more competition should lead to lower prices and better services. Who are these “analysts”?

    Despite all of the happy horse manure coming from Telus and Bell, nobody should hold their breath waiting to see a reduction on their phone bills. This is all nonsense.
  19. gaetan diotte from Ottawa, Canada writes: Just like the airline, cable, bank, electricity deregulations where we got less choice, less quality and more expenses. How can any rational human being keep believing these concepts that have been continuously proven wrong since they came out in the 80s. Every deregulation has led to a negative impact on consumers.
  20. Progressive Canadian from Canada writes: In summary: telephone service in this country is going to become crap whilst we save at best a couple of pennies. This is based on the experience of other countires. Capitalism is by far the best system, but the libertarian ideology of the free market above all is pure rubbish.
  21. Anti Elvis from The New Saudi Arabia, Alberta, Canada writes: Number 19. Deregulation for the telcos will be different. Why? The presence of the Internet & the ability for you to make phone calls using it.

    I'd like to see some changes in the cell market, but that will happen when WiFi becomes commonplace.
  22. Gary Jones from Markham, Canada writes: The CTRC is not keeping prices high, as one commenter asserts, the telcos are. As for competition - there really isnt any.

    Rogers local service is slightly higher than Bell, and of course they try the 'apples to oranges' and 'supersize me' tactics by bundling features with basic services that few need. But Rogers phone services are not quite as reliable as Bell's - after a few generations in the business, Bell has finally gotten local service to be more or less reliable.... more or less.

    The real competition - that nobody is talking about- is from IP phones. Vonage's services are slightly less than the Bell and Rogers monopolies , and these guys are are less than HALF THE PRICE OF BELL OR ROGERS - iPhone - www.comwave.net/CDN/iPhone/packages.htm.

    Expect therefore for Bell to make their IP phone service available in all the major markets at a really low price, so they can choke out iPhone and the other small players, after which the price will double to match the existing local phone rates.
  23. Cryin Outloud from Canada writes: It's not as if these companies aren't making huge profits now, just like our banks.
    How much is enough corporatists?

    This is just another nail in the coffin of Canadian soveriegnty. It won't be long and we'll have bankrupsies and buyouts by larger foreign companies. Canada's government is as useless to us as Iraq's, and Afghanistan's are to them. We are being taken over just as clearly as they are, only we're going quietly, from behind closed doors.
  24. Anglo-Saxon Nation from Within, Canada writes: Any time big business supports a government policy, be very sceptical. More competition? Better service? Lower prices? Sounds great, but let's not forget the goals of these corporations are to beat out the competition and make money
  25. Georges Clermont from Canada writes: Deregulation can only work if there is significant competition as was demonstrated in the European Union. There is NO competition in Canada and it will be a decade before it is significant. Telecommunication rates in the EU are a fraction of what they are here.
    Bell is a monopoly in fact and in mindset and this will not change quickly. It used to be a model of efficiency to the rest of the world: today it's one of the worst. Just try to call outside NA in the morning!
    The NEW Canadian Government doesn't know what it's getting into: the saving grace is that voters will soon realize that they have been had once more.
  26. toby schnauzer from Ottawa, Canada writes: Towards the commentaries that would like to see the CRTC also get out of regualting cell phone rates and service: the CRTC does not regulate either. The rates, service and choice of competitors you get now are the result of a free market. There have been no new major competitors - or drastic reductions in price - for a few years and there are unliklely to be any in the near future.
  27. Ramesh Fernando from Canada writes: Competition is the best way to reduce prices. We should remove the shackles from Bell, Alliant (Bell owned) and Telus. But still the problem exists, the CRTC still interferes too much in the telecommunications market. We also need more competition, both local and foreign. We need to have outdated foreign ownership regulations removed so Bell, Rogers and Telus can face real competition. By just letting local competition take place without removing foreign ownership rules may be a mistake. And to all who say we shouldn't have foreign ownership. the old BC Tel part of Telus was owned by American GTE before GTE sold BCTel to Telus and merged with Verizon (Bell Atlantic).
  28. Concerned Canadian from Mississauga, Canada writes: This is not going to do anything for the consumer. If my telephone bill is reduced as a result of this change I will donate ten times the annual reduction to charity. I do not expect that this pledge will cost me anything.
  29. Michael Smith from Halifax, Canada writes: How shortsighted! This move is not free economy. The telcos are still too big. They simply will lower prices until the competitors are out of business and then they will be monolopies again. This is not helping the economy, it is not helping the consumer. While commendable to say we need to provide a true competitive market, we need to understand what the market truly is before we 'cut off our noses to spite our faces'. If everyone was on a level playing field then de-regulating would make sense, not when a recent monopoly is still tremendously dominant.
  30. My Observations Sitting Here On The Front Porch from Willowdale, Canada writes: ...the first thing this all means is that we will now have our ears blasted by telemarketers anxious to sell their phone services to us (or back to us). There will be plenty of sweet deals to con one into purchasing 'their unique' service...but...as people of Canerda have become used to...the rates will probably soon hereafter jump higher than a kangaroo on steroids.
  31. Mark Thorne from Stouffville, Canada writes: From a telco perspective this announcement is obviously viewed as a positive step forward. Any Executive at either Bell or Telus will tell you why. I read above about lower prices as a result of this change - not so fast, at least not across the board anyway. If anyone has read or listened to a telco investor conference in the last few months lower prices are mentioned sparingly. In all lines of business (wireline, video, ISP, wireless) there is an overall driver to maintain or increase prices, not reduce them. Telco's will be very selective about where and on what product lines prices will be reduced. I'd expect to see more bundling offers in the market with the typical spend-more, save-more spin to them. In the near future of course that will mean wireline service will be thrown into the mix. As a ‘telco-guy’ I welcome these sorts of announcements as regulation imposed by any government body, in a word – sucks. The market will decide who succeeds and who fails and no company is just going to start throwing money out the window to drive our competition. As a consumer it should mean getting a better (maybe not cheaper), all encompassing package from the provider of my choice.
  32. My Observations Sitting Here On The Front Porch from Willowdale, Canada writes: Some friendly advice...following my Comment 30, dear folks. I have found an interesting way to 'stun or amaze' telemarketers. When they phone, I say to them 'I'm sorry I can't talk to you as I don't have a telephone'. That leaves them scratching their heads and a chance for me to disconnect the call. Another sure method of dealing with them is to tell them you are working midnights and his/her call just woke you up, however, if he/she would be good enough to leave their home phone number, you would be happy to call them back around 3:00 AM when you are taking your lunchbreak.
  33. Mike Sprague from Mississauga, Canada writes: I agree with the comments that we should get the CRTC out of regulating cellphones as well, and allow more competition not less.

    All the comments above about Bell, Telus, Rogers etc assume that we will have the same cast of oligolopolistic players rather than opening the market more completely. If we keep the market restricted to the existing players maybe prices will go up, but they won't if we allow full competition.

    We pay through the nose in Canada for telecommunications - US consumers pay half what we do for a decent cellphone plan - why? I also recommend that those readers who are worried about prices and have internet access switch to Skype - calls are free anywhere in USA and Canada at the moment and service is great. I have cut about $200 a month off my phone bill by switching - this is not trivial or a myth. Skype belongs to eBay these days so not likely that Rogers and Bell will kill it off like Vonage.

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