From BenKlass.wordpress.com blog

I AM CANADIAN, A REPLY TO BELL'S OPEN LETTER

08/03/2013 · by Ben Klass · in Networks

Dear Mr. Cope,

Amongst your many traits as CEO of Bell Canada Enterprises (BCE), tenacity, enthusiasm for your trade, and perseverance top the list. Conspicuous in its absence from your letter, however, is your sense of irony.

You begin the "unusual step of writing to all Canadians" (Strange, isn't it, that "Canada's Top Communication Company" should find it unusual to communicate with its customers?) with a history lesson, ostensibly in the interest of helping us "understand a critical situation" now facing the wireless industry: the potential entrance of an American company into the Canadian market.

You inform us that, since Parliament granted Bell its charter in 1880, Bell has spent 133 years "investing in delivering world-class communications services to Canadians." An impressive track record!

You must, however, be aware that Bell's permission to operate in Canada was initially obtained by agents acting in the interest of the (American) National Bell Telephone Company and that, after securing a favourable charter, three top-level executives from National Bell were appointed to Bell Canada's board of directors (Babe, 1990, pg 68-69). Or how about how American Bell initially owned 50% of your company, only fully divesting its interest 43 years ago, in 1970 (Winseck, 1998, pg 119)?

Bell began its life in Canada as a branch plant of an American company; in a strange twist of fate, it's now a descendant of National Bell Telephone - Verizon - which is contemplating (re)entering the Canadian market. And they leveraged this relationship to get an early leg up on the competition - using patents owned by its American parent, Bell quickly monopolized the market for Canadian telephone services, a monopoly it used to funnel profits back to the States. (Smythe, 1981, pg 141)

You suggest that "US giants don't need special help from the Canadian government," but that's exactly how Bell got to where it is today!

That's all ancient history, however, and in the here and now, BCE is a Canadian company who "welcomes any competitor," so long as they "compete on a level playing field." Right?

You're calling on the Federal government to close "loopholes" that are intended to promote competition in your industry - rules that your company has forced the government to create.

Regarding the three "loopholes" you want closed:

1. "Verizon would be able to buy twice as much of Canada's airwaves as Canadian companies like Bell can in an upcoming auction of wireless spectrum - the airwaves that carry your calls and data."

According to a recent article in the Financial Post, BCE currently holds license to 19% of Canadian radio frequencies designated for mobile use - that's if you include the upcoming blocks of 700MHz in the total - or 29% if you don't. Bell didn't get most of that spectrum by paying market price, but through a 'beauty contest' - the government licensed mobile spectrum to Rogers, Bell, Telus and other regional providers such as MTS and SaskTel for pennies compared to market value.[1] You might call that "existing spectrum holdings previously subsidized by Canadian taxpayers," something you've got in spades but would deny to your competition.

Even in the unlikely event that you don't win a block of 700MHz in the upcoming auction, you'll still be in control of 19% of all available mobile spectrum in Canada - more than twice as much as the set-aside provides for new entrants.[2]

The playing field looks pretty tilted from here.

2. "They get to piggyback on the networks of Canadian carriers wherever they don't want to invest and build their own."

At least you won't have to worry about Verizon piggybacking on your network here in rural Manitoba - because you barely have one. Instead you've chosen to only cover the most densely populated (and most profitable) areas of the province while ignoring places like Thompson, Churchill and the Whiteshell - a practice that you reserve exclusively for Verizon. Where you do provide service - Ontario, Quebec, Vancouver, etc. (Winnipeg, Brandon, and immediately surrounding areas in MB) - you're already sharing a network with TELUS. Since 2009, Bell and TELUS have been sharing their national 3G (HSPA) network infrastructure. You've needed help providing your services for years, why should we expect Verizon to go it alone?

Rogers also has similar agreements with regional providers such as MTS. In fact, all three national providers are already sharing their networks with their "competitors," yet you actively campaign to exclude new entrants such as WIND and Verizon from the club. Not my idea of a level playing field.

3. "Verizon can acquire smaller Canadian competitors - but Bell and other Canadian wireless companies can't even try."

You note that "With Ottawa's help, the new companies [WIND, Mobilicity, Public Mobile] have become part of the vigorously competitive Canadian wireless marketplace". I have to point out that with yourhelp, one of those companies is facing imminent financial insolvency, while the other two are actively courting buyers. Naguib Sawiris, WIND's original backer, has frequently and publicly lamented his decision to test your waters. The previous contestants, (Clearnet and Microcell) I would add, met a similar fate when they were bought out by TELUS and Rogers in 2000 and 2004, respectively. Are we supposed to believe that TELUS is still competing with Koodo, or Rogers with Fido?

After every challenger contesting your dominance of the wireless market has been bought out or squashed, is it any wonder that the government wants to act to promote real competition?

Mr. Cope, I am Canadian. Like virtually every other Canadian I know, I rely on my mobile phone in my personal life and for my livelihood on a daily basis. The "critical situation" I face comes every month, when I open my wireless bill wondering whether I'll be able to afford to pay it. Your company, along with Canada's other major wireless providers, have had 30 years to address this situation. But you've failed. Posting huge profits and paying dividends year after year might satisfy your shareholders, but individual Canadians and their families are being hung out to dry. It's time for a change. Faced with a choice between an American company fighting to gain a foothold in a hostile market or a Canadian one who takes my hard earned money for granted, I'll pick the lesser of two evils. And if you don't know which that is by now, I'll happily send you a copy of my monthly phone bill.

~

[1]According to a report Bell submitted to Industry Canada's invite-only Wireless Roundtable in 2010, total fees paid by spectrum licensees to IC is $132M per year, your share of which (29%) is $38.28M per year by my estimate. Sounds like a lot, until you consider that you paid nearly that much at auction just to secure AWS spectrum for Toronto alone (Per year cost of winning bid for 10 year license.) It's fair to say that most of the spectrum you're holding (and have been for up to 30 years) has cost you significantly less than market value. Why should you have access to public subsidies for spectrum but not your competitors?

[2] This estimate excludes spectrum held by Bell et al for radio and television broadcasting, but includes the BRS spectrum - intended for mobile internet but out of use since early 2012 - currently being hoarded by Inukshuk Wireless, a joint venture between Bell and Rogers. Also, it assumes that Verizon will not have completed acquisition of Wind or other new entrants prior to the auction.

Sources Cited:

Babe, Robert E. Telecommunications in Canada. University of Toronto Press, Toronto. 1990.

Smythe, Dallas. Dependency Road: Communications, Capitalism, Consciousness, and Canada. Ablex Publishing, New Jersey. 1982.

Winseck, Dwayne. Reconvergence: A Political Economy of Telecommunications in Canada. Hampton Press, New Jersey. 1998.

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From Rabble.ca

Big Telecom against Canada: Who will win?

BY DAVID CHRISTOPHER | JULY 25, 2013

Big Telecom is at it again -- Telus is now actuallythreatening the government with legal action if they follow through on their commitmentto stop the Big Three cell phone giants from taking over public spectrum assets that were set aside for new affordable telecom options for Canadians.

Telus reps are throwing a tantrum because they are afraid of losing the regulatory protections they've received in the past. We'll see if the government gives in, but if they do it will be a complete about-face -- the Conservative website currently boasts "We will not allow the big telecommunications companies to shut down competition by buying up undue amounts of wireless spectrum."

Let's not forget that this latest affront from Big Telecom on Canadians comes after we've just seen Telus and Bell introduce new two-year contracts with substantially higher monthly rates than before. We've yet to hear from Rogers but it'll be no surprise to see them follow suit and increase their monthly rates too.

These price-gouging hikes come despite the fact that Big Telecom is making huge profitsoff the backs of Canadians who already pay some of the highest prices in the industrialized world - as confirmed by a recent 320-page independent report -- for some of the worst service.

The price hikes are further evidence that Big Telecom have embarked on a systematic campaign to undermine our widely welcomed new cell phone rules -- rules that were shaped by thousands of Canadians who took part in CRTC consultations. Big Telecom's multi-pronged campaign against Canadians includes:

-  Going to federal court to undermine and delay new cell phone contract rules.

-  Increasing their already sky-high monthly cell phone rates and using the new CRTC rules as an excuse.

-  Unleashing an expensive and misleading PR campaign, including full-page ads in newspapers across the country.

Why these higher monthly rates? Big Telecom's flimsy excuse is that this huge jump in monthly fees is because of our long overdue move to 2-year contracts. What do the experts have to say about Big Telecom's claims? Here's what you need to know:

-  Telecoms expert Professor Michael Geist examines Big Telecom's argument in detail inthis well-researched piece on his blog. Professor Geist concludes that "Without new competitors, the incumbent carriers will use this opportunity to increase monthly costs." In other words, our higher monthly fees are the product not of shorter contracts, but of lack of independent choice in the marketplace -- over 93 per cent of the market is currently dominated by just three large, unaccountable conglomerates.

-  Professor Geist also highlights that many other countries have 2-year contracts with cheaper rates than here in Canada. Spain for example has a highly competitive wireless market with much lower prices than here in Canada. Fancy a new iPhone 5 on a 2-year contract for under $35 a month, including 1GB of data? You'll have to move to Spain for that. That same deal from Telus will cost you $85 a month under their new pricing structure.

-  Expert analyst Peter Nowak points out that even Bring Your Own Device (BYOD) users will see their fees increase under Telus' new fee structure -- despite the fact that BYOD customers aren't tied to a two- or three-year contract term. Big Telecom clearly doesn't need any excuse to price-gouge Canadians -- that's why Canadian carriers make more money off of cell phone users than almost anywhere else in the industrialized world (fourth highest in the entire 34-country OECD).

-  Big Telecom also likes to use the excuse that our sky-high prices are the result of Canada's large size. Our own Catherine Hart thoroughly debunks that argument, crunching the numbers to show that most Canadians live in a handful of cities -- that's why, according to Big Telecom's own lobby group, Canada has just a quarter the number of wireless towers that the U.K. has -- despite our being 40 times the size of the U.K.

Our high cell phone prices are acting as a real dead weight on our economy, stifling innovation and hampering job creation. Canada cannot afford to keep falling further and further behind our counterparts in the rest of the industrialized world.

It looks like it's Big Telecom against price-gouged Canadians, innovators, entrepreneurs and business, legal experts; and the list goes on. It's Big Telecom against Canada -- and I for one am betting on Canada to win like we have in the past.

The way ahead is clear -- we need bold action to lower prices by opening up our networks to all Canadians and new service providers. This idea has worked successfully in the U.K., Australia, and New Zealand. Canadians have laid out a clear road map forward -- send this road map to your M.P. and demand action -- tell your M.P. that Canadians have put up with Big Telecom's price-gouging and disrespectful customer service for long enough.

P.S. If you haven't already, don't forget to tell Canada's new Industry Minister James Moore you expect him to rein in Big Telecom at: http://demandchoice.ca

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From Rabble.ca

Creative Canadians take on Big Telecom's propaganda

BY DAVID CHRISTOPHER | AUGUST 9, 2013

You've likely heard by now about the massive and misleading advertising campaign being run by Canada's Big Three telecom giants, as they desperately try to stave off the prospect of greater choice in Canada's wireless market. Campaigns like this don't come cheap - but Big Telecom has deep pockets after years of price-gouging Canadian cell phone users.

Judging by the remarkable grassroots response from Canadians, it's clear that Big Telecom has totally misjudged the national mood. They're wasting millions on misleading propaganda and expensive ads that almost nobody believes.

That's one good thing that's come from all this: Our small team here at OpenMedia.ca has been so inspired by how Canadians are speaking out in creative ways to expose Big Telecom's lies. Keep speaking out Canada!

Here's a flavour of how Canadians are fighting back:

Have you heard about Bell's misleading two-page ad, headlined 'An open letter to Canadians'? Well Manitoba-based blogger Ben Klass did, and he decided to write back. Check out Ben's "I am Canadian, a reply to Bell's open letter". Here are some of the best bits:

- On how Big Telecom never paid a fair price for its existing spectrum: "Bell didn't get most of that spectrum by paying market price, but through a 'beauty contest'... for pennies compared to market value"

 - On how Bell's network fails rural Manitobans: "you've chosen to only cover the most densely populated (and most profitable) areas of the province while ignoring places like Thompson, Churchill and the Whiteshell"

 - On how Bell's track record of squashing new entrants: "After every challenger contesting your dominance of the wireless market has been bought out or squashed, is it any wonder that the government wants to act to promote real competition?"

- Ben's conclusion?: "Your company, along with Canada's other major wireless providers, have had 30 years to address this situation. But you've failed... It's time for a change."

You may also know that Canada's Big Three launched a flashy and expensive new website, stuffed with misleading claims designed to persuade Canadians that more choice in our wireless market is a bad thing. Luckily, it didn't take long for plucky Canadian designers to fight back. In just the past week we've seen two new websites launch with the aim of ensuring Canadians know the truth:

- RealFairForCanada.ca: "Protecting Robellus against fair-play and competition is a bad call for us Canadians."

 - Four4Canada.ca: "We've all been ripped off by our 'proudly Canadian' big 3 telcos. I want to share our stories with the world."

You can also check out Reddit user 'webmiester' explaining how he wanted to "get people to start talking about what Canadians have to deal with when they're up against what is basically a monopoly". Check out his frustrating conversation with a Rogers customer 'service' rep here.

Last but not least, draw some inspiration from Karen Geier's "Open Letter to a Closed Brand", in which she tells Big Telecom, "Canadians have complained vociferously that their plans are simply too expensive compared with their American counterparts, and you have done nothing about it." Her piece was published on Global News and now trending on Reddit - go check it out!

Want to chime in? Here's how you can help:

Momentum is on our side, as it looks like the government is finally starting to listen to Canadians' outcry about our broken cell phone market. It's vital that Canadians continue to work together to ensure people know the truth about Big Telecom's false advertising.

We at OpenMedia.ca have set up a number of ways to help you do precisely that:

- Sign the petition: If you're reading this blog, you may have already joined the over 58,000 Canadians speaking out at DemandChoice.ca. If you haven't, what are you waiting for? Add your name today. We need as many people as possible to speak up and tell the government not to give in to Big Telecom.

- Tell your MP to take action: Canadians have laid out a clear road map forward for the future of our wireless market. Use our tool to tell your MP its time for action to lower cell phone prices by opening up Canada's networks to affordable, independent providers. We know from experience that decision makers take action when they hear from their local constituents - take this easy and effective action now!

- Write a letter to your local newspaper: Getting a letter published in your local paper is, by far, one of the most effective ways of getting your message out. Many local papers are publishing Big Telecom's expensive ads, and your neighbours need to hear from people like you about what's really going on. Writing a letter is a lot easier than you might think. We've put together this easy-to-use tool to make the whole process as simple as 1-2-3. Check it out now at openmedia.org/newspaper.