Canada Competition Bureau

Canada’s Competitions Bureau Claims 4th Carrier Could Save Consumers $1 Billion

May 16, 2014 - Written By Cory McNutt

I am glad to see that it is just not the U.S. Government having problems with regulations – either too many or too few.  The Canadian Government seems to be having their own troubles when it comes to their wireless industry and they seem hell-bent on adding a fourth major carrier, much like we have in the U.S.  Right now Canada has three major players – Rogers, TELUS and Bell – and a few smaller offshoots; some owned by the major players – Fido owned by Rogers, Koodo and Public Mobile owned by TELUS and Virgin owned by Bell. The Competition Bureau says the three largest Canadian Carriers own 90-percent of the cellphone business, and because of this, they have the power to artificially inflate prices and keep them there for a significant mount of time.

“The [Competition] bureau estimates that increased retail competition from an additional nationwide mobile wireless carrier could result in gains of approximately $1 billion per year to the Canadian economy in the form of better product choices, price reductions and other benefits to customers.”

The “competition watchdog,” is basing its claims on an earlier study done by the Brattle Group and reported these findings to the Canadian Radio-television and Telecommunications Commission (CRTC) and is based on having a fourth national carrier – based on the theory of increased competition driving down prices.  They are reviewing whether to increase regulations that could affect how much the large companies can charge the smaller companies that use their towers. Rogers’ Senior Vice President of Regulatory Affairs, Ken Engelhart, claims the study is “misguided” and “speculative,” because it is based on having a fourth carrier.  With the Federal Government about to pass additional legislation capping what the national carriers can charge, he believes there is already enough regulations and said:

“The budget bill caps domestic roaming charges at no higher than the average retail rate, everyone seems to be ignoring that.  That is an incredibly intrusive regulatory control and why anyone would think more is needed is beyond me.”

The Government has tried, without success, over the past couple of years to somehow create a fourth national carrier, but to no avail and they are blocking the sale of bankrupt Mobilicity to TELUS.  Telecom consultant Eamon Hoey said: “The problem is not the policy, the problem is in how you administer the policy.  Whether you have three, four, 10 carriers, if the game is fixed as it has been since 1985, it won’t make a difference.” Please let us know on our Google+ Page if you think that the Canadian Government is helping or hindering competition and pricing…as always, we would love to hear from you.