Thursday, March 7, 2013

A 700Mhz Hog Wash


This morning, I was skimming through this Minister of Industry speech on "New measures to increase competition in the wireless sector".

If you've not lived in Canada, you'd probably have no idea of the shenanigans that go on up here in the wireless space, so here's a quick recap:

You basically have a duopoly of heavy hitters (Bell Canada and Rogers Wireless) and their little tag-along brother (Telus) who control nearly everything.  There is a public facade that infers a sense of competition because you can go to independent looking providers, but it's really just the same players wearing different makeup, so there's Koodo (Telus), Fido (Rogers), Solo (Bell), Virgin (Bell), Chatr (Rogers), and so on.

Having sewn up the communications market with no real competition, they've amassed a lot of control, which they exert over auxiliary areas.  For instance, Rogers owns the cable TV system which brings you sports, and they own the SkyDome (now called the Rogers Centre) and four out of the five sports teams in Toronto. 

So I come to the aforementioned speech…

It starts of with "I am proud to announce today the next steps in our government's plan to build a more competitive wireless sector—One that delivers for Canadian families by providing more choices and more access at better prices.

Ok, this sounds promising…  Maybe we're getting some outside competition to break up the current tar-ball of a national duopoly that we currently have?

After a bit of waffle, it says "Simply put, since coming to office, we have made a stronger, more competitive wireless sector a priority. And the results speak for themselves. Consumers have more choice in the wireless market than ever before. Prices have dropped, and most Canadians now have access to faster mobile speeds and the most sophisticated tablets and smartphones."…  

When?  

My prices are still the same as before, and what choice of provider do I have today to get an iPhone from that I didn't before?  Cross reference this with the "Commercial Mobile Spectrum outlook" from Industry Canada and you'll notice the words "Family" and "Families" is mentioned precisely zero times.  This is a "raise money from dead airwaves" operation. 

After a bit more waffle, it says "Third, our government is delivering on our promise to use the upcoming wireless spectrum auctions to promote four competitors in each region of the country. The first of these auctions, the 700 MHz auction, will take place on November 19, 2013."

Ri-i-ight.... 

So to rehash this in plain English, the switch to digital TV has freed up some old TV broadcast spectrum and our three major players are going to bid for 75% of this, and you're inferring that they will be ALL now be in ALL regions of the country plus one other player in each region.

Note that there's no mention of opening this up to foreign competition in either report.

Conclusion 
The forecast is just more of the same.  Rogers and Bell will make the biggest offers, Telus will fight for 3rd place and you'll see a scrap for the 4th position from various new startup funds.

Hooray for this victory for Canadian families! Not.