Telecom Trends

The Montreal Gazette ran an editorial yesterday entitled "Canada's wireless policy is clueless". It left me scratching my head.

The article was based on a superficial assessment of the wireless market in Canada, ignoring facts that didn't agree with its agenda. I had to wonder about the lack of depth in researching its position.

Take for example the paragraph bemoaning Canadian cell-phone penetration:

About 58 per cent of Canadians now have cellphones; in the U.S. the figure is 77 per cent and Britain, the Czech Republic, and several other European countries have more than one such device per person.

Let me be perfectly clear. "More than one such device per person" makes no rational sense. It is a statistic driven by customers arbitraging aberrant pricing plans. Canada should not strive to have disfunctional European pricing models that lead to supra-normal penetration rates. The Gazette apparently thinks that it is good to have multiple phones so that when you call someone on the Bell network, you use a Bell phone; have another phone for your Rogers-based friends and a third for TELUS calls. That is one of the phenomena that drives European penetration in excess of 100%. People holding onto foreign country pre-paid SIM cards is another contributor.

Europeans typically receive no subsidy for their phones. Would the Gazette also want each of us to pay upwards of $150 more for our phones as well?

As the old commercial use to say, "you can pay me now, or pay me later." Canadians like to pay later. We also like to be able to call local numbers for free from our home phones. Europeans get gouged.

With multiple phones per person, Europeans are also paying multiple bills per user - paying more for the privilege of claiming superior penetration rates over those of us in the colonies.

Here is another juicy paragraph from the Gazette editorial:

As the well-informed University of Ottawa professor Michael Geist explains on the opposite page, lack of competition in the mobile-data business means prices are high, which is keeping Canadians off the newer sections of the information superhighway. Hardly anybody in Canada would be able to afford the mobile Internet service provided by the iPhone, and certain other handheld devices - because all of Canada's service providers keep their mobile data rates sky-high.

As I have written before, blaming high data plan pricing for the delay in iPhone's launch is just not credible. The iPhone hasn't been launched in Germany or any country other than the US. Other countries are said to have better suited data prices; their markets are bigger. But no iPhone. Why is that?

Could it be that Apple is rolling out the product on their own schedule?

Canadians continue to buy the latest versions of Blackberry. Carriers have introduced special plans for Mobile TV that don't charge by the bit. Canadians are continuing to buy wireless services for the first time increasing our penetration rates, and add new enhanced multi-media features which speaks louder to affordable prices than repeated rantings from opinion pieces in papers.

Rogers' launched its Vision service in April, beating any of the US carriers to market with truly advanced high speed mobile internet. Barrett Xplore has made broadband internet universally available to every household and business in Canada, coast-to-coast, sea-to-sea-to-frozen tundra.

It seems to me that The Gazette should get better informed before calling Canada's wireless policy clueless.

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Let me again point out the OpEd by FCC Commissioner Robert McDowell has an Opinion piece in the Wall Street Journal on July 24, called Broadband Baloney. He refutes the tendency for people to want government intervention in communications markets that are working pretty well on their own:

Looming over the horizon are heavy-handed government mandates setting arbitrary standards, speeds and build-out requirements that could favor some technologies over others, raise prices and degrade service. This would be a mistaken road to take -- although it would hardly be the first time in history that alarmists have ignored cold, hard facts in pursuit of bad policy.

As I wrote on Tuesday, his piece concludes:

When it comes to broadband policy, let's put aside flawed studies and rankings, and reject the road of regulatory stagnation. In the next few years, we will witness a tremendous explosion of entrepreneurial brilliance in the broadband market, if the government doesn't micromanage. Belief in entrepreneurs and a light regulatory touch is the right broadband policy for America.

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