Segacs's World I Know

Posts Tagged ‘crtc’

A new BMO report suggests that on average, Canadians pay about 20% more for the same goods and services as our American neighbours do — even though the loonie is above par:

BMO’s survey compared 11 items, including golf balls, Blu-ray movies, running shoes and cars.

There is no denying Canada is smaller and that means less competition, which in turn means higher prices.

But Michael Mulvey, marketing professor at the University of Ottawa’s Telfer School of Management, also noted some of the biggest difference in prices between the U.S. and Canada are in the areas where there isn’t free trade, such as telecomunications.

I’ve ranted about the higher telecommunications prices before. Those are due to price-fixing by the corrupt CRTC — something not mentioned in this study.

But for consumer goods where actual competition exists, how do we explain the price gap?

Taxes, for one thing. The study is comparing pre-tax prices, so you might think that’s not a factor. But there are taxes all the way down the chain of distribution, not just at the end-consumer point. That 15% you pay in combined GST and QST is merely the tip of the iceberg. The higher taxes down the line help pay for our essential social programs, like medicare, but they do make things more expensive.

Another factor that is mentioned by the study is the size of the country, and the fact that distribution and shipping is more expensive when you have a sparser population in a less concentrated area. This helps explain why prices would be more in, say, Yellowknife. It doesn’t explain why something retails in downtown Toronto for 20% more than it does across the border in Buffalo, NY.

The rapid rise of the dollar is another factor. When the Canadian dollar was worth 60 cents US, we understood the price gap. Now that it’s above par, it’s frustrating to see this gap. But the price adjustment period takes longer to catch up than the loonie takes to rise in the first place. The gap is closing somewhat — just more slowly than we might like.

But the main reason is merely supply and demand. In a market economy, prices are less about what something costs to produce and more about what the market will bear. We pay more because we pay more because we pay more. It’s circular. If people stopped buying things that were too expensive, the prices on them would drop. They would have to.

Lots of people would like to complain, protest or mobilize to correct this. What they don’t understand is that these prices aren’t being fixed by the government, and the economy cannot – and should not – be centrally managed in order to make people happy.

We do have choices. We can drive down to Burlington or Plattsburgh, shop in lower US dollars, and come back across the border — and pay duty (or not, as every good Canadian knows the tricks of how to avoid that at some point. Not that I’m endorsing that, mind you.) We can order online and pay the extra shipping charges, though the vast majority of US online retailers won’t ship to Canada, frustratingly enough.

Finally, a little perspective: Prices are higher in Canada than they are in the USA, but they’re lower here than they are in a lot of other places in the world, including South America, most of Europe, some places in Asia, or Australia. We constantly compare to the Americans because we’re so close; it’s hard not to get jealous and feel like the outsider with our face pressed to the glass when we get American ads on TV, radio or digital media splashing prices around that are inaccessible to us. But if you saw what people were paying elsewhere for the same items, you might appreciate our prices a bit more.

You can tell it’s an election year when the government actually bothers to do something useful. Harper, seeing the writing on the wall after massive petitions and public outcry, has issued an ultimatum to the CRTC about its recent usage-based internet billing ruling: back down, or we’ll overrule you:

Last week, the CRTC ruled that usage-based billing, the model used by large Internet providers such as Bell Canada and Rogers Communications to charge customers extra for exceeding monthly download limits, will apply to smaller providers, too. Until now, those smaller providers could offer unlimited Internet packages; the ruling means they no longer can.

There have been hints already from Industry Minister Tony Clement that the federal government may quash the controversial ruling, and the prime minister has asked for a review of it. But the government’s blunt ultimatum to the CRTC suggests any review would be pro forma.

This was a terrible decision by the CRTC – yet another in a long line of them that have backed Big Telecom’s demands over the rights of the consumer and the marketplace. Usage-based billing would have stifled innovation and choked off advancement, it’s true. But let’s not forget that, thanks to the CRTC, Canadians pay the most in the world for cell phone plans, pay for incoming text messages (despite another Harper campaign promise… anyone remember that?), and enjoy tons of lovely censorship of TV and radio. All because the CRTC is supposed to protect the interests of all Canadians, but only protects the interests of three: Bell, Telus and Rogers.

As for the government, let’s not forget that this is one decision, taken under overwhelming public pressure, in the face of hundreds of other decisions that have gone against consumer interests. The real solution isn’t to review this one decision; the real solution is to review the CRTC’s overall mandate and existence.

Coming on the heels of the news-that-will-shock-nobody that Canadians pay the highest cell phone bills in the world, someone’s taking notice… and it ain’t the CRTC:

Unlimited wireless data plans are almost unknown in Canada, and that’s a strategy telecom carriers elsewhere are starting to emulate as they look for ways to cope with booming demand and capacity limits.

BCE’s Bell Canada, Rogers Communications and Telus Corp  – Canada’s “Big Three” telecoms – command profit margins that are the envy of the industry. They have an historical advantage over their peers because Canadians accept that they have to pay for as much capacity as they use.

Or, maybe it’s because the CRTC is more interested in protecting those profit margins that are the “envy of the industry” than in protecting consumers, in our price-fixed, oligopolistic market.

And it’s got consequences. Less affordability translates to lower smartphone penetration, which means companies have less incentive to stay ahead of the curve on wireless development, which means Canada will – as usual – continue to lag behind the rest of the world when it comes to innovation. That’s bad news for everyone… unless, of course, you happen to be an executive at Bell, Rogers or Telus.

We’ve lagged behind the rest of the world long enough. We’re supposed to “accept” things that are unheard-of in the rest of the world, like punative three-year contracts with ridiculous cancellation fees, “system access fees” of $8.95 a month, being charged for incoming voice minutes and even text messages, and ridiculously high data plan pricing. Us Canadians don’t “accept” that we have to pay as much for data as we do; we’re forced into it because we have no choice. That is, no choice other than opting out of owning a smartphone entirely, which is the choice I’ve made.

Instead of admiring our market, the world should be mocking it. And instead of protecting the anachronistic, anti-competitive marketplace, the government should scrap the CRTC and throw the doors open to real competition. Until then, consumers and businesses will be the big losers.

The CRTC has approved a broadcasting license for English Al-Jazeera in Canada:

I first blogged about this back in 2003, when media monitoring organisations were sounding the alarm about the virulent antisemitic content being broadcast on Qatar-based Al-Jazeera’s Arabic-language station on a daily basis, under the guise of news. The English affiliate doesn’t have quite the same level of bias – certainly, not that much worse than we see regularly from, say, the CBC or the Guardian, or on the other side, from the likes of FOX news. If there’s a demand for the service, and the content doesn’t cross the line, then I have to stand in support of freedom of information.

Besides, this is 2009. Anyone who wants content can get it, regardless of the CRTC’s decision. This decision is really only about whether satellite providers can charge for it, or whether people will have to access it online or through other methods.

I still haven’t forgiven the CRTC for all those years without HBO, though. Segacs to CRTC: this ain’t over, bitch!

In a very un-Conservative move, Stephen Harper made a campaign promise today to regulate businesses more, cracking down on such unfair business practices as price-fixing, deceptive marketing, and incoming text message fees.

While my usual philosophy is to tell government to stay out of business, in this case, I think Harper has the right idea. A free market is one thing; illegal business practices are another. The telecom companies are among the chief violators of fair competition, and they have long hid behind the CRTC to gouge consumers at every turn. This is not a big money issue for most Canadians, but it’s one that gets us up in arms pretty quickly, so it’s actually smart of Harper to latch onto the issue in his campaign.

I just wonder if it will be easier for me to sue Bell for charging me hundreds of dollars of bogus fees, after I cancelled my service with them? Yeah, I doubt it too.

Two related stories in today’s Gazette, referring to all three major players in Canada’s mobile phone market:

First, a story about how Bell and Telus are both going to start charging for incoming text messages. Considering most of the spam I receive is actually from Bell, that shows some nerve. Coupled with my recent notice that Bell’s plan prices are going up yet again, for me, this is finally the last straw. I’ve had it with Bell. Enough. Fini. C’est tout.

Unfortunately, the competition isn’t much better. Rogers, which recently signed a highly-touted exclusivity contract with Apple to bring the iPhone to Canada, is charging ridiculously high rates for data, basically pricing the iPhone out of reach of the average consumer. And don’t try to get an iPhone from a competitor, either; there aren’t any.

The competition bureau, of course, doesn’t see a problem here:

“Where consumers are concerned about the plans being offered with the iPhones, we don’t consider this to be a competition issue,” said bureau spokesperson Marilyn Nahum. “We don’t consider the iPhone to be a distinct market.

“It’s a cellphone that competes with other cellphones in the market. If consumers don’t like the plans being offered with the iPhone they can go to the competitors.”

This is nothing new. With only three major carriers in the marketplace, Canadians have been gouged on cell phone prices forever. We pay twice what Americans pay for similar voice or data plans, and several times what Europeans or people in the rest of the world pay. Most of us pay a bogus “system access fee” of $6.95 to $8.95 per month, and virtually everyone pays for incoming voice minutes – a practice almost unheard of outside of North America. Our phones are “locked” to our carriers, we are locked into 2- and 3-year contracts with hefty cancellation penalties, and until last year, we couldn’t even keep our phone numbers when switching carriers.

Don’t expect things to get better anytime soon, either. As long as the major telecommunications companies are in bed with the CRTC, and virtual monopolies are allowed to exist, things are only gonna get worse.

Meanwhile, Bell and I are history. Anyone have an old Rogers phone they want to donate / sell to me at a reasonable price?

All right, that’s it: It was one thing when it was just getting Google to censor search results or other such “minor” infringements on freedom of speech. But now China has gone too far: It’s restricted the Simpsons:

D’oh! China has banished Homer Simpson, Pokemon and Mickey Mouse from prime time. Beginning Sept. 1, regulators have barred foreign cartoons from TV from 5 to 8 p.m. in an effort to protect China’s struggling animation studios, news reports said Sunday. The move allows the Monkey King and his Chinese pals to get the top TV viewing hours to themselves.

Foreign cartoons, especially from Japan, are hugely popular with China’s 250 million children and the country’s own animation studios have struggled to compete. Communist leaders are said to be frustrated that so many cartoons are foreign-made, especially after efforts to build up Chinese animation studios.

The most ironic part of this news story? That China, a Communist nation, is really doing nothing worse than what the CRTC does here in Canada. Ain’t it great living in such a free country?

Here’s yet another reason:

For 25 months now, cell-phone users in the United States have been able to change service providers and take their numbers with them. This spares you the laborious process of notifying everyone who has your number that you have a new one now.

[ . . . ]

This week the CRTC has announced, oracularly, that Bell Mobility Inc., Rogers Wireless, and Telus Corp. will have to offer number portability by March 2007 – more than three years after U.S. consumers received this service. This will apply for Quebec, Ontario, B.C. and Alberta; the requirement doesn’t kick in for smaller provinces until six months later.

It’s all part, says the CRTC, of balancing the interests of consumers with the interests of the carriers.

Isn’t it strange how consumers so often come out on the short end of the CRTC’s balancing acts?

All of the cell phone companies in Canada offer overpriced products and horrible customer service. Since Rogers bought out Fido I’ve heard nothing but horror stories from subscribers of both. Telus isn’t any better. Bell Mobility — my phone company — is perhaps the worst offender of all. But because our phones are already locked to our companies, and getting a decent deal on a new phone means locking into another contract, switching is already enough of a hassle. Having the phone number locked into the company is all that much worse.

Local numbers are already portable for landlines; I kept my phone number when I switched my home phone service from Bell to Videotron earlier this year. There’s no doubt the consumer wins when competition is fostered. If the cell phone companies actually had to fight for our loyalty, they might not treat us quite so callously.

The CRTC does little other than “protect the interests” of companies that feed us overpriced crap and prohibit us from getting the stuff we truly want. Any party that promises to immediately scrap it can have my vote in the upcoming election.

The offer’s on the table. Any takers?

The upcoming season will be the last for Six Feet Under, one of the few remaining quality shows on TV. Of course, it’s on HBO, which the CRTC has deemed too dangerous for our sensitive Canadian eyes. Still, I grew addicted when I had satellite and I’ll miss it.

It’s nice to see a show ending on a high note, rather than staying on too long and sinking into mediocrity.

I may have been on vacation for two and a half weeks, but amazingly, the world didn’t stop chugging along in my absence. Here’s a bit of catch-up.

Firstly, a hearty MAZEL TOV to Allison on the birth of her new baby girl, Tamar! If she’s anything like her mom, we’ll be reading her byline in about 20 years or so.

Unfortunately, not all the news from Israel is that good. While I was in Israel, lots was happening there… and now that I’m home, time to catch up on it. The IJC ruled that the security fence is illegal – no surprises there. Meryl is essential reading, and Lynn has an increasingly popular view on the subject. Now that the UN General Assembly is preparing to do what it does best and issue yet another resolution against Israel, what can I really say on the subject other than it’s no worse than everyone expected. I used to wonder why Israel didn’t put more effort into winning the media war, but now I’m starting to come around to the view that none of that effort would make the slightest bit of difference. The world is determined to villainize Israel, and in the meantime the Israeli government should concentrate on defending its citizens. Especially if the fence helps prevent more incidents like this one. Whatever I could say on the subject, I know that, as usual, Imshin already said it better.

But, hey, the UN still acknowledges that Israel is the best place to live in the Mideast. Even despite all those GA resolutions.

It’s looking more and more like civil war in Gaza. But I have to agree with the Jerusalem Post commentary that this is not good news for Israel. Arafat is a murderer, a terrorist, and a corrupt leader who has inflicted most of the hurt he has caused on his own people. But he’s also incredibly attached to power, and extremely savvy at holding onto it. Speculation that he may be brought down is, I believe, no more than wishful thinking. Besides, anyone who could conceivably replace Arafat would probably only be worse. Chaos will just lead to more bloodshed, which is bad news all around.

The assassination of an Israeli judge is leading to shock and questions. Was it terrorism? Related to criminal or civil matters? Something else entirely? The police investigation will reveal more, and in the meantime, the papers are engaging in plenty of speculation.

The French seem to never tire of creating pointless headlines. Jacques Chirac has told Ariel Sharon that he is unwelcome in France, due to remarks Sharon made encouraging French Jews to make Aliyah to Israel to escape antisemitism. Way to go, Jacques, that’ll really convince people you’re committed to wiping out antisemitism, barring the Israeli Prime Minister and all. Right. To Mr. Sharon: I hear Eilat is much nicer than Paris this time of year anyway.

The violence in Iraq continues to claim more lives on a daily basis. Suicide bombings are becoming so common that they’re hardly even getting reactions anymore. Here’s a thought: maybe if the Americans built a fence…

On the home front, Paul hits the nail on the head on the CRTC decision to allow Al-Jazeera to broadcast, albeit with special restrictions. The CJC may see this as a good compromise. But I think it’s just further evidence that the CRTC needs to be dissolved. How is it okay, in a supposedly free society, for our government to decide that we’re allowed to watch Al-Jazeera but not HBO?

Canada has taken a small step away from our usual foreign policy of holding up a maple leaf and shouting “please like us”. We have chosen to express our displeasure with Iran in the Zahra Kazemi murder trial by… recalling our ambassador. Yeah, that’ll show those bastards. Burnside agrees. We should really take a few lessons from Israel on how to deal with threats from countries like Iran.

Those are some of the highlights and low points. Lots more happened, of course, but I’m through playing catch-up. Onwards and forwards.