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The U.S. is no telecom role model for Canada

Looking south is increasingly archaic in a world where consumer expectations have gone global.

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When discussing the state of telecommunications services and their respective prices in Canada, industry defenders often point to the United States in their rationalizations.

Globe and Mail columnist Jeffery Simpson, for example, did so in a missive last week titled “No facts please, it’s cellphone policy,” in which he drew on the recent CRTC-funded Wall report:

Against the U.S., which is the comparison most Canadians make, Canadian prices are not out of line, including in-country roaming charges. Says Wall: “Consumers are no better off in either country as far as overall roaming charges are concerned.” Over all, telco prices are lower in Europe and Japan than in Canada, but higher in the U.S.

Facts, huh? How about the fact that at $56.32 (U.S.), Canadian wireless carriers have the highest average revenue per user – synonymous with the size of the typical subscriber’s bill – in the world, followed closely by their American brethren at $50.08. Both amounts are well above the developed world average of $40.42, according to the Bank of America Merrill Lynch Global Wireless Matrix:

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These are cold, hard numbers that, unlike what Simpson asserts, aren’t subject to cherry-picking or dependent on what is being analyzed. Also, it’s the comprehensive Wireless Matrix that is the “gold standard” when it comes to such comparisons, not the more limited annual Wall Report, as he suggests.

On the wired side, the United States sits at 16th out of 34 countries in broadband adoption as measured by subscriptions per 100 people, according to newly updated figures from the Organization for Economic Co-operation and Development. Canada actually fares better, at 11th:

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In both cases, the U.S isn’t exactly a role model that Canada should aspire to.

In terms of wireless bills, is it much better to have the second-highest in the world rather than the highest? Heck, if you’re going to play in that echelon, you might as well shoot for number one because then at least you have something to brag about – which is exactly what wireless carriers do when they think the public isn’t paying attention.

In regards to getting the population connected, does Canada really want to end up in the middle of the pack, like the U.S.? That’s actually doubly ironic, considering the United States invented the internet.

Beyond the numbers, there are several other reasons why the U.S. is a poor telecommunications role model. For one thing, the House of Representatives on Friday approved legislation that will make it legal for American consumers to unlock their cellphones – an act that is technically against the law right now. The bill now just needs a signature from President Barack Obama.

While that’s admirable, Canada officially made unlocking cellphones legal back in 2012 with a specific exception in the Copyright Modernization Act. The CRTC followed up last year by enacting a rule in the Wireless Code that forces carriers to unlock them after 90 days, or immediately if the consumer pays for the phone outright.

The same goes for net neutrality, a major issue now under contention in the United States. In Canada, the CRTC issued rules preventing internet providers from unduly interfering with network traffic back in 2009. By way of comparison, the Federal Communications Commission took a short cut years ago in trying to do the same, which ultimately led to the current showdown down south.

It turns out that because the internet is considered an “information service” instead of a telecommunications service, the FCC overstepped its legal authority. Canada wisely classified the internet a telecom service, meaning that Canadians have considerably stronger net neutrality protections than their American cousins. Canadian rules are imperfect to be sure, but they are miles ahead of the nothing that Americans currently have.

In both cases, Canada is well ahead of the United States, largely because of a government and a regulator that has for the most part been receptive to public sentiment. It’s because of the sizable – and vocal – outcries of consumers, especially online, that Canada has protections such as the net neutrality framework and the Wireless Code.

The biggest fallacy in looking to the U.S. as a role model lies in the failure to realize that the world has changed. Simpson’s assertion that the U.S. is “the comparison that most Canadians make” might have been accurate in the pre-internet age, when traditional media was heavily American-influenced or when many Canadians living near the border had first-hand experience of services and prices, but that’s simply not the case anymore.

Now, when it’s easy to look up just how good people have it in more far-flung countries – like how the average download speed is four times faster in Hong Kong than in Canada, or how a basic iPhone plan in Britain costs a third of what it does here – Canadians are looking further afield in determining their collective aspirations.

It’s not just companies and the products they make that have gone global thanks to the internet. So too have facts and the consumer expectations they drive.

2 Comments on The U.S. is no telecom role model for Canada

  1. How and when can we see more progressive actions taken in Canada to match that of our European friends? Canada undoubtedly wants lower prices and better service, do we all really have to switch to something like Wind Mobile and get the international investors to do it for us?

  2. Simpson is a great political columnist. Technology pundit. Not so much. Best to stick at what he is good at.

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