Consumer advocates wary of Liberal plan for lowering wireless phone bills

Hey there, time traveller!
This article was published 23/09/2019 (2560 days ago), so information in it may no longer be current.

TORONTO – The Liberal party’s promise of a 25 per cent reduction in wireless bills for average Canadian families was greeted with skepticism Monday by observers of Canada’s telecommunications industry.

Consumer advocates agreed that Canadians want to pay less for their wireless services, but questioned whether a Liberal government would follow through on its pledge if Justin Trudeau gets another mandate as prime minister.

They cited a lack of detail in the party’s platform and the telecom industry’s opposition to having a government or regulator set the wholesale price they can charge to mobile virtual network operators (MVNO) — their competitors for retail customers.

Trudeau promised on Sunday the Liberals would work with Canada’s incumbent carriers and select MVNOs for two years and would consider spurring further competition if there isn’t a 25 per cent reduction in service prices.

A Scotiabank analysis suggests prices on some Canadian plans have already come down compared with the prices cited in the Liberal announcement — which are based on information collected in 2018.

“Examples given were $87/5GB and $75/2GB plans. These plans have already fallen recently to $65 and $55 BEFORE promotional bonus data, or by more than 25 per cent,” Scotiabank says in a brief report.

“Since June, the incumbents have been offering $75 unlimited at full speed up to 10GB, which is much more attractive than the examples the Liberals used in its document.”

But University of Ottawa professor Michael Geist and John Lawford, executive director of the Public Interest Advocacy Centre, said in separate interviews the they think a focus on prices was misplaced.

Geist said that there’s difficulty in making price comparisons either between countries.

“The problem that Canadian consumers have is that our prices are high relative to other countries, not just that they’re high,” Geist said.

Lawford said statistics from the Canadian Radio-television and Telecommunications Commission finds that the total amount spent annually per customer is always going up.

“To me, it’s more (important) what people are paying on average (for what’s current),” Lawford said.

“If, on average, that keeps going up faster than inflation and faster than the OECD average, then maybe they need to take regulatory measures to put more competition in or put a price cap on — but that’s a real big step.”

In fact, the New Democratic Party has proposed setting a cap on cellphone and internet prices rather than relying heavily on increased competition to push down prices, as the Trudeau Liberals and Harper Conservatives have done.

The Conservatives under Andrew Scheer haven’t yet announced their position on telecom pricing, although a spokesman for the party said in an email that there will be a statement during the campaign for the Oct. 21 election.

OpenMedia’s Laura Tribe said the consumer advocacy group is glad that telecommunications is on the agenda but said the Liberal plan for allowing a limited number of new competitors has too many qualifiers.

“People need more choice. And not just in providers but in the types of plans and services that are available. And we don’t see that kind of variety from just a handful of providers,” Tribe said.

She criticized the Liberal plan for suggesting the government would work for two years with incumbents and only “qualified” mobile virtual network operators to push down prices by the 25 per cent target.

“If it doesn’t work out, the government has to start over in trying to bring in more competition — which is ultimately what they should be doing now,” Tribe said.

Meanwhile, the wireless industry’s main spokesman said MVNOs aren’t necessary to bring down the cost of wireless services because there’s already competition among the carriers that own their own networks.

Robert Ghiz, a former Liberal premier of Prince Edward Island who is now chief executive of the Canadian Wireless Telecommunications Association, said the average Canadian cellphone bill fell by 28 per cent between 2016 and 2018.

“And that’s been because of facilities-based competition in Canada,” Ghiz said.

He said CWTA member’s aren’t opposed to MVNOs as such but doesn’t want the government or regulator to force them to limit their wholesale prices to a mandated level.

“It will not lead to lower prices in Canada and it will lead to less quality and less coverage in our country.”

This report by The Canadian Press was first published Sept. 23, 2019.