Garneau says Ottawa lets you get ripped off

The federal Liberal leadership candidate cites the outrageous cellphone ‘industry’ in Canada that overcharges and underperforms

By Marc Garneau –

Big bills, poor service, few choices – on wireless, internet and phone services, Canadians are fed up. They want competition and it’s time to give it to them.

The evidence is clear. In initiating its recent public consultation on a wireless code of conduct, Canadians inundated the Canadian Radio-Television and Telecommunications Commission (CRTC) with comments.

We are at best ranked in the middle in the developed world and our prices are high. While some may quibble about one methodology versus another in ranking us, the evidence supports Canadians’ frustration. Studies from the Organization of Economic-Cooperation and Development (OECD), Harvard University and the CRTC, show where we stand. According to the CRTC’s latest report, Canadian wireless revenues, measured as the monthly average revenue per user (ARPU), are the highest in the G7. At $55 per month per mobile subscriber, Canadians pay 20 per cent more than users in the US, 70 per cent more than users in France, and 100 per cent more than users in the UK and Germany. On mobile data, roaming rates and internet combined, Canadians pay more per month for telecommunications than many of our developed world counterparts.

Beyond just prices, Canadians are frustrated with the endless list of roadblocks: Locked phones, ridiculous contract penalties, hidden service charges, bogus “system access fees”, the list is endless.

Small, medium and large businesses are also frustrated with the lack of choice, high prices and restrictive contracts. According to the latest study by the Centre for the Study of Living Standards (CSLS) Canadian business investment in information technology and telecommunications in 2010 was just 53 per cent of that in the US. This, in turn, has negatively affected Canada’s productivity and ultimately the strength of Canada’s overall economy.

While I commend the CRTC for making the effort on its wireless code of conduct, I hold little hope for success in achieving change. In a system without real competition in which consumers have few choices, the CRTC, the regulator, has limited options. Technology will change, providers will change their packages, their price offerings, slip in a new fee here, there and everywhere, and the regulator will not be able to keep up.

Ultimately, the key is competition. Only real, market-based competition will keep providers in line. With competition and choice, providers will weed out unnecessary fees, invest in service quality to retain customers and improve their product packages.

That is why I believe Canada must open the door fully to competition in telecommunications. Canadians want world class service, and we want to be able to compete in the world. Perhaps this sounds redundant, but we can’t compete with the best unless we actually compete with the best. You won’t make the NHL if you keep playing in house league.
I would maintain restrictions on foreign ownership in broadcasting because of cultural and content implications to ensure continued production and broadcast of Canadian shows and content for television, film and new media. But I would open the doors on telecommunications. In Germany, Sweden, Italy, even France, there exist no restrictions on foreign investment in telecommunications. It is time for Canada to enter fully into the global market as well.

Let’s compete with the best and let competition bring new ideas, entice investment in new technologies, create new jobs in Canada and drive down the costs of our wireless bills. If a Vodaphone or a Verizon enters Canada and offers Canadians new choices, new options, all the better. New entrants will invest in new advanced networks benefiting Canadian consumers and businesses alike. The investment will support continued innovation in the digital economy, improve Canadian competitiveness and help create jobs.

Only through competition with the world will we innovate on the leading edge and create our own home-grown, globally competitive businesses. I have every faith that when put to the test, Canadian businesses, Canadian entrepreneurs will step up to the plate and compete – and the ultimate winners will be Canadians.