Skip to main content

Andrew Seipp is a consultant in the telecom industry. This piece is in response to this column.

Last week Gerald Caplan suggested that Canada should start nationalizing companies, especially telecom giants like Bell and Rogers, namely because of their dismal customer service. It's not that I disagree with his sentiment, as my consulting practice is built in part on helping customers avoid the pain of dealing with their telecom providers. But the idea of replacing a cozy oligopoly with a government monopoly is asinine. In fact, you needn't look far to see what it would look like.

Just look at Canada Post.

Story continues below advertisement

In March, Canada Post eliminated home delivery under the guise that it would reduce delivery costs. They also raised the price of service by a whopping 35 per cent, giving Canadians less service for more money. Even worse, there's nothing that consumers can do, because under the Canada Post Corporation Act private-sector couriers like UPS or Fedex are required to charge no less than three times the price that Canada Post charges for letter delivery. There is in effect no incentive for Canada Post, or its competitors, to become more efficient because they have a protected monopoly.

Mr. Caplan's scenario of nationalizing Bell and Rogers would go from a situation of "pick your poison" to "eat your poison." Even though both companies have problems with customer service, they both have an incentive to improve because more and more customer service is becoming the differentiator for telecom companies. It's worth looking at reports published by the CCTS, the body that handles telecom complaints, and see which company receives the least. Per 1,000 subscribers, the company that receives the fewest complaints is Telus. Not so coincidentally, Telus also has the highest subscriber growth rate and the lowest cancellation rate in the industry.

But with Government Tel, there'd be no incentive to provide any service. You'd have to take what you can get because you'd have no other options.

The wild card is Sasktel, the Saskatchewan government-owned Crown Corporation, but it's worth bearing in mind that they compete with other providers in Saskatchewan even going so far as allowing Bell and Telus to use their wireless network and compete directly with them. It's also quite telling that with four providers, Saskatchewan has the best wireless rates in the country. But it's not because of the incumbent crown corp. It's because there are four providers all fiercely competing with each other.

The solution isn't for the government to nationalize our telecom companies. The solution is for the government to create an environment where new entrants can compete. There are promising signs that this is happening; Videotron's participation in the last spectrum auction and the CRTC decision to regulate domestic roaming rates that incumbents are allowed to charge. In response, upstarts like Wind Mobile have already slashed their retail Canadian roaming rates by 95 per cent. Despite some challenges in Canada's telecom policy, the dramatic transformation of the CRTC into a consumer advocate seems to have worked and it seems possible that Canadians may finally get the service and pricing that we deserve.

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies