Sunday, February 06, 2011

Quit Your Tweeting Over UBB Challenge the Teleco Monopolies

While thousands of Canadians blogged, tweeted and set up internet petitions about the CRTC's User Based Billing (UBB) decision this week, methinks they protest too much, or at least have missed the real issue. As Michael Geist points out; The widespread use of bandwidth caps in Canada is a function of a highly concentrated market where a handful of ISPs control so much of the market.

The fact is that the Canadian marketplace is dominated by oligopolies; the big Telco's and Cable operators. They already overcharge us for cell phone use as well as internet access. You are already getting gouged even before the CRTC ruling!

Canada’s largest telecoms don’t want to say how much it costs to deliver a gigabyte of bandwidth and have refused to disclose such data, arguing that information is both proprietary and competitively sensitive. They also argue that it’s difficult to calculate the specific cost of delivering bandwidth since the cost varies based on the technology being used, the user’s location and the time of day.

Of course they don't because as studies have shown we are charged more for our use of these "public utilities" then any other countries. And the reason is that these oligopolies make a profit off of service charges.

It’s 2010 and Canadians pay the highest cell phone bills in the world

Surveying more that 50 developed and developing countries where information is available, one country comes out on top when it comes to the most revenue extracted per subscriber on a monthly basis. And that country is of course Canada. What you are looking at here are the world rankings of mobile ARPU (Average Revenue per User). To you and me ARPU is your monthly bill, before GST/PST/HST etc. (through taxes and high spectrum license fees, our government is culprit here too)

This data is total bill including both voice and data. Canada does not have the highest proportion of data to voice charges though data usage in Canada is growing fast (we’re finally catching up after a late roll-out of 3G compared to many countries). Interestingly, Canadians are estimate to pay slightly less per minute of voice (10 cents vs 11 cents) on average than our nearest neightbour the U.S.. What is really driving bills in Canada over the top are the egregious fees like system access fees (the fees many plans still pay whether you access the system or not in a month), and especially “value pack” fees like 15$ a month for the luxury of call display and handful of voice mails

Now remember when they say that they have legacy costs, those costs are transmission lines, satellite connections, etc. Things that we the taxpayers have invested in. Telus was originally a government of Alberta phone company and it bought our city owned telco; Edmonton Telephones. So its legacy costs are the direct result of being a public utility. The Canadian government satellite program is used by telecos to transmit GPS signals, as well as broadband and mobile phone transmissions. So how come we get charged as if these companies had actually spent some money on this infrastructure.

Instead of protesting over UBB folks should be pissed off that the telecos and cable companies are gouging us using our public airwaves, and our legacy infrastructure and then charging us for it. The right wing likes to talk about how competiton will decrease prices, but that is not the case when the market is dominated by oligopolies who set base prices. While some would say its time for the CRTC to go, I would contend that since there is little interest in nationalization of these public utilities, that we direct the CRTC to set real rates based on the global market prices. Our protests should be over the costs we are charged not for usage but for service fees. Service fees should be eliminated, just as ATM and Bank charges should be.

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