Recently the campaign to save the Internet(didn't know it was in trouble)has ramped up into high gear in terms of rhetoric. According to critics of recent shifts towards a more commercially-based wholesale regime in Canada, "monopoly" telephone companies like TELUS and Bell are trying to kill competition by preventing access to networks built at the expense of the taxpayer. Now to anyone with any sense of regulatory history this is bull. No wait, bull is to small a concept to describe for such blatant and deceptive sophistry. Moose pooh, or MP for short is a better description for sure. Moose pooh is like bull but bigger and more substantial.
A little history here. Bell has always been a shareholder-owned and operated company. TELUS is a combination of AGT,BC Tel, Quebec Tel and Clearnet (with a dollop of Ed Tel thrown in). BC Tel and Clearnet were shareholder owned. While AGT was publically owned a generation back, it was privatized in 1990 well before the creation of the world wide web or the launch of DSL service . MTS Allstream a promoter of the taxpayer MP story, was also once the child of public enterprises (the state-owned Manitoba Telephone system and CN Rail part of the CNCP consortia that morphed into Unitel,ATT Canada and Allstream). However no one today is suggesting that MTS is a taxpayer funded entity.
In point of fact the investment that now supports the Internet for all the major local exchange carriers (outside of Saskatchewan) has been built on the regulated backs of shareholders first under rate of return regulation and subsequently price caps. Cable Internet was built with much less regulation .It is simply beyond myth to suggest, as some do, that taxpayers subsidized investment under ROR. Rather under ROR shareholders of telephone companies were provided a opportunity to earn a reasonable return on investment. The quid pro quo was that prices were kept artificially low to ensure universally affordable local phone service. The local telephone company was never the recipient of subsidy ,rather the local phone customer was heavily subsidized by the phone company in order to achieve universality objectives.
Rate of return was replaced by price caps in the late 1990s, but even before that the CRTC had imposed a split rate base regime in 1995 that moved most competitive investment, including DSL investment out of the regulated rate base. Price caps subsequently insulated subscribers even further from the risk of new investment to shareholders. Even so all that initial DSL investment has been and will remain subject to access tariffs, regardless of what happens around next-generation networks.
The other myth, is the myth of monopoly and the inability of other carriers to invest. First cable not telephone companies are the market share leaders in Internet access based on billions of dollars of infrastructure investment in a more deregulated environment. It is economically inaccurate to call the market share follower a monopoly. Second in addition to cable, a company like TELUS is facing new competition in the retail internet space in three areas. First the Inukshuk, Rogers and Bell fixed wireless play is making inroads at 2.5 and 2.6 Ghz. Second new wireless HSPA networks are being rolled out that will deliver downstream retail speeds comparable to some wireline internet today. Third satellite internet has proved to be another downstram alternative for consumers in rural and remote markets. Again this competition is enabled by billions of dollars of new investment.
Perhaps the most telling evidence of competition and investment is demonstrated by investments made by TELUS beyond the borders of Alberta and BC. By continuing to invest in facilities outside of its heritage borders, TELUS has been executing a national growth strategy that has led to it winning major contracts from the Governments of Ontario, Quebec and Canada away from Bell and other carriers.
Competition is real and investing in the future works. Rhetoric can buy time from government to live under a regulated umbrella (maybe) but it won't support a sustainable business strategy in the face of very real competition.
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Here's a list of a few things that make me think Internet in Canada is in a sad state and needs fixing
ReplyDelete-I paid for 5Mbps and i got 60kb/s
-Internet usage amounts for Bell's plans go down instead of up over time
-service providers slow down peoples connections depending on what they use it for and don't offer a practical alternative for any price
-In order for companies to slow your traffic they need to monitor what you're doing with your connection which brings up all kinds of privacy issues
According to OCED (Organization for Economic Co-operation and Development)
ReplyDeleteCanada is expensive ranks 14th in costs at $45.65 U.S./month
-Japanese pay an average of $30.46 U.S. per month and the British spend an average of $30.63 U.S.
-high prices low penetration in Canada.
-Canada ranks 24th out of the 30 OECD countries in speed
-Japan, Korea, France and more have much faster speeds
-applications and services appearing in other countries have yet to take a foot hold in Canada due to these slow speeds
-reports indicate the speed gap between Canada and most of the OECD appears to be growing
-the fastest consumer speeds often come from ftth of which Canada has almost 0 penetration
Japan 48% Korea 43%
-For price/speed Canada is 28th out of 30 in OECD rankings
-On the positive side we did manage to finish ahead of Mexico and Poland
-Canadians pay more for less.
-Canada, Australia, New Zealand and Belgium were were the only countries where all broadband options included "bit caps" that limit consumer use each month
Your right everything is Hunky-dory
Yeah Mike. There's *no* government subsidies for Bell to build their infrastructure. I forget, how much, exacly, is Bell paying me for the right to string wires through my backyard? Oh yeah, that's right...nothing - beacuse the government granted them the rights of way. How much are they paying the guy down the street, for the big green box in his front yard? Oops...they got a government granted easement for that.
ReplyDeleteAnd this article http://newsrelease.uwaterloo.ca/news.php?id=995 *certainly* doesn't state that Bell Emergis is getting funding from both the federal and provincial governments, for R&D. Oh no, that *couldn't* be true...
Liar.
I monoply or dudoply means there is only 1 or 2 players in a coverage area (aka neighbourhood). In almost all areas, The Cable and local phone provider are the only 2 that provide END USER networks.
ReplyDeleteThat means DSL is truly controled by a monoply and not letting market forces take hold.
Just think if everyone ran their own end user networks.. What a wire nightmare it would be for everyone... not to mention horable looking.
To add to what Anonymous said.
ReplyDeleteHow much are telcos paying to rip up streets again? Where property tax payers get the bill?
Not even a word about the government granted monopoly until 1992....
ReplyDeleteHave they been through your neighbourhood to restring "investor paid for copper" to your house?
I'm pretty sure most of Canada is running on their origial copper.
Moose Poo alright...
What a bunch of BULL SHIT - were you even ALIVE when any of these companies existed?? As far as what Bell is doing they and Telus are basically trying to drive everyone else into the ground. We would have been far better off if CNCP were allowed to exist and compete NATIONALLY as it was in the late eighties. Anyone who thinks the CRAP that I have read about them on the internet is true should go back into their MOM'S basement and be sure to close the door!! Anyone who thinks BELL has this country's best interest at heart is an IDIOT - they were overjoyed to see HARVEY run CNCP/Unitel into the ground!!!
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