You've Been Driving a Lexus for Years and Didn't Know
Marc Dahan
The Montreal Economic Institute released its telecommunications report this week, in which the author invites Canadians to be happy about the high prices we pay for telecom access, because we have the privilege of paying for some of the best quality service in the world. To cite the report's own awkward analogy:
“Clearly, in terms of speed and service quality, Canadians are paying for a Lexus, not a Yaris”.
Time to celebrate, we’ve been in the luxury market for years and didn’t even know about it...
The author of the report, Senior Writer and Editor at the MEI, Martin Masse, states in the MEI’s official press release:
“Critics of wireless prices in Canada regularly claim that these are among the highest in the world, but such comparisons are simplistic and misleading […]. It’s like comparing what two people have to pay to lease a car, without noting that the first is a highly-paid executive leasing a Lexus she uses every day, while the second is a low-income retiree leasing a Yaris that he uses once a week”.
So, apparently if you compare what you pay for telecom services to what people pay in almost every other country in the world and happen to notice that you're invariably paying more for much less, you shouldn't worry about it; you're just being simplistic. Prices aren’t as high as you think, according to Masse and the MEI. And if you're still not convinced, you should remember the unique service quality we benefit from in Canada (you know, the one that gives you less for more), as opposed to the rest of the world. You see, the data packets from Canada are just better (Lexus), and hence more expensive. Nice.
The Montreal Economic Institute rejects the banner of a right-wing think tank, though it supports weakening Quebec’s labour laws, increasing the transparency of labour union financing, merit pay for teachers, and ending Canada Post's monopoly on letter delivery, as well as a general downsizing of the state. So while it may not think of itself as a right-wing think tank, it actively engages in supporting the policies of... a right-wing think tank. Taking this into account, I guess the warped conclusion of its telecommunications report (be happy you’re getting screwed) is not all that surprising. The report is little more than an attempt at countering the (true) perception that lack of competition in the Canadian telco market is responsible for the unreasonably high prices Canadians have to pay, as well as a pass at further normalizing this situation.
I just stated the perception of high prices is true, but don’t take my word for it.
On May 1st, 2018, Rewheel, a Finland-based boutique management consultancy, released a report detailing 4G wireless pricing for Q1 2018 in the developed world. The report researched the amount of 4G data that could be purchased with 30 euros (approximately 46 CAD) within the European Union and OECD markets for smartphones and data-only plans. The result?
So, Canada ranks 5th to last for smartphones and dead last for data-only plans. It would seem a lot of countries are driving Yarises and didn’t know. One can wonder if Toyota knew business was this good...
But wait, Masse then adds: “It’s true that consumers pay more every year for their telecommunications services. But this is because they are switching to higher quality services and buying more of them, not because prices keep going up”.
So, if your prices are high, it’s just because you keep upgrading your plan. You just can’t get enough of that Lexus-quality data, you glutton.
As an aside, here’s what Masse has to say, relative to the US FCC Net Neutrality repeal, in chapter 3 of the MEI report, entitled: "Broadband Regulation: Should Canada Emulate the United States?":
“Although critics have used dramatic terms to characterize the repeal of Title II regulation, it merely reverts back to the lighter-touch regime that governed the internet from 1996 to 2015”.
And (emphasis mine):
“In banning innovative and pro-competitive targeted pricing plans, the CRTC has not protected the integrity of the internet; rather, it has raised prices for certain consumers and lowered prices for no one”
Not only is Masse stating that the FCC repeal of Net Neutrality is no big deal (it is), he's equating the repeal to promoting "innovative and pro-competitive pricing plans". He then claims that protecting Net Neutrality causes prices to go up for consumers. Another reason Canadian telecom service prices are high, according to the MEI: The CRTC isn’t letting telcos create fast lanes through paid prioritization. Well... It would seem that the MEI's telecommunications report is also an excellent opportunity to do some backdoor lobbying for Canada to follow suit with the FCC’s flawed decision. Remember, they're not a right-wing think tank... Moving on.
Masse spoke with Rogers-owned publication News1130, and said: “If you go from a regular cellphone to an iPhone 8, obviously the regular cellphone doesn’t have a data plan and it’s very cheap. The wireless plan for a smartphone is much more expensive but you get many more services.”
Here Masse seems to want to “educate" us on the (rather obvious) fact that using a smartphone with a data package is more expensive than using a “regular cellphone” without a data package… Thanks for that. So if you think you’re paying too much, as compared to the rest of the world, don't forget that you’re using a smartphone with a Canadian, Lexus-quality data plan, and that the rest of the world is, apparently, using late 90s Nokia phones... without data… (does a Yaris support WAP…?)
Let’s see what the rest of the world is offering in terms of smartphones and data packages:
From Dr. Michael Geist’s article Not So Fast: Digging into MEI's Report on the State of Canadian Wireless Services, which seriously undermines MEI's methodology. Michael Geist is a law professor at the University of Ottawa, where he holds the Canada Research Chair in Internet and E-commerce Law:
"[A] simple comparison for pay-as-you-go prepaid options shows how badly Canada compares to those countries with faster networks and less wireless density [(emphasis mine)]. Here’s Rogers pay-as-you-go plan for $50: unlimited texting, evening calls, and 500 MB.
By comparison, here’s Telstra’s pay-as-you-go plan for A$50 (or about $48) in Australia: unlimited texts, unlimited calls, unlimited international calls to 10 countries including Canada, 15 GB of data, rollover data of up to 50 GB, and $15 credit for any additional charges.
In Norway, Telia’s 299 kroner (about $48) pay-as-you go package: unlimited calls, unlimited text, and 3 GB of data.
In Iceland, Siminn’s 2900 krona (about $37) pay as you go package: 50 texts, 50 minutes of calls, and 5 GB of data. There is also a data-only package at the same price for 10 GB of data".
But hey, who wants a Yaris, right?