Segacs's World I Know

Posts Tagged ‘telecommunications’

Wow, this is a sea change: Terry DiMonte’s coming back to CHOM. Again:

In the end, Terry DiMonte lasted around 3½ years in Calgary. While there, DiMonte – one of Montreal’s most famous radio morning-men – made it clear he missed his beloved Habs and still bled bleu, blanc et rouge and apparently he wasn’t faking that Montreal nostalgia.Wednesday afternoon, CHOM ignited no small amount of chatter on social-media like Twitter and Facebook – and even in the real world – when the Montreal classic-rock station announced that DiMonte is returning to helm the morning shift at the FM rock outlet.

There’s no chance that Ted Bird will be back with him… he clearly burned that bridge with his acrimonious departure last year. But even without the Terry and Ted show, this is fantastic news.

Terry DiMonte is one of the last great voices of radio. He’s intelligent, witty, sensible, and actually funny without being obnoxious. His return only underscores the fact that they don’t make ‘em like this anymore, because there has been literally nobody who’s even come close to filling his shoes in the past four years.

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.

Imagine the surprise of a woman who was charged $47,000 by Bell for the use of mobile internet, after being instructed to set up her phone that way by Bell’s customer service department:

“The guy on the line told me: Oh, it’s no problem. Your cellphone has unlimited Internet, so you can just connect your phone to your computer.”

 After Rooney asked three times if there would be an extra charge, Alexandra stayed on the phone with a customer service representative for about an hour to figure out how to connect the phone to the computer to get Internet service.

 A week later, all of Rooney’s phones were disconnected. She borrowed a phone and called Bell customer service.

 “When I spoke to the agent, he told me I had a very high balance,” she said. “He told me $47,000, and then told me I had to agree to pay a minimum payment of $300 for my phones to be reconnected.”

 Since that day, Rooney’s phone bills have not been less than five figures. Her most recent bill was for $12,000, and Bell has cut off her phone service six times.

It took Rooney over four months to get the issue resolved:

On Tuesday, Rooney got a call from someone named Gina, who said she worked at the office of the president. She apologized on behalf of Bell, and said it was unacceptable for it to take this long to settle her problem. The woman told her all charges had been reversed, and her current balance was $181.16.

“When I heard, I was so happy that I cried,” Rooney said. “She told me, she understood why I went to the newspapers about this because it’s been since July. I gave them a lot of time to handle this and they didn’t. She was really nice.”

From now on, the woman told Rooney she no longer has to contact customer service and if she has any problems, she has a special number to call.

Francoeur said the settlement of Rooney’s problem had nothing to do with the fact that a reporter contacted the company on her behalf, and that the problem would have been solved this week anyway.

Yep, that was my experience back when I was a Bell customer, too. Months of running around in circles on the phone with various customer service agents accomplished nothing. Only going to the top – in my case, to a VP – finally managed to solve anything. Which begs the question of what, exactly, the point of having a customer service department is in the first place. I mean, could nobody below the level of the president see that there was clearly something wrong with a $47,000 phone bill?

Rooney says she’ll probably remain a Bell customer, which sounds crazy but is likely because, in her rural area, she has no choice. As for me, I fully divested myself a few years ago and will never look back.

The GSMA have announced measures to standardize mobile phone chargers by 2012.

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.

Responding to massive public pressure, including an online petition that garnered over 57,000 signatures, Rogers has announced a $30 data plan for the iPhone.

It’s not the unlimited flat plan that people had hoped for, but at 6 gigabytes, it’s pretty close. And so far, it’s only available to people who purchase their iPhone before August 31st. But it’s a whole lot better than the previously-announced plans, which start at $60 and range to $115 per month – gouge-worthy levels.

The problem is, Rogers holds all the cards. Once people rush out to take advantage of this pricing and sign three-year contracts, they’re locked in. And Rogers’ regular rates for data plans are outrageously high.

Meanwhile, Bell and Telus are coming under fire for their decisions to charge for incoming text messages… by the government:

Industry Minister Jim Prentice publicly demanded an explanation from two of the country’s telecommunications giants yesterday about their “ill-thought-out” decision to start charging cellphone customers for incoming text messages.

Here’s a thought: Rather than summoning them in front of a government committee to try to justify their pricing, as these telecom giants are accustomed to doing from their monopoly days, why not open up the market to real competition instead of our current oligopoly-style imitation? That would take care of their cash-grab collusion pricing in a hurry.

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?

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?