The Canadian Mobile Oligopoly
Canada’s summer drama has finally come to an end.
The effort by the nation’s telecommunications oligopoly to restrict competition and maintain Canada’s record-high cell phone bills proved successful.
For those who missed the action, it began with Verizon Wireless’s rumored entry into the Canadian cell phone market. The federal government played its role as auctioneer, offering up broadcasting rights across the great Canadian plains to the highest bidder.
Naturally, this sparked panic at the “Big 3” telecommunication firms — Bell, Rogers, and Telus — which control all but 8 percent of the Canadian mobile market. Rather than allow a new kid on the block, they formed a cartel and funded a huge advertising campaign to win the hearts and minds of ordinary Canadians.
A giant foreign corporation wants to invade Canada and steal jobs, snoop on your data, and tear down cell phone towers in farm communities so grandma can’t call home.
“This policy could undermine Canadians’ ability to connect to one another, threaten Canadian jobs, and raise significant concerns regarding privacy and security,” claims the Fair For Canada campaign website, littered with public opinion polls and newspaper editorials in favor of keeping out Verizon and supporting the status quo.
Never mind the fact that Canadians pay the highest cell phone bills in the world, according to the New America Foundation, and over 41 percent of Canadians believe price is the most important aspect of their wireless service. At least that’s what the Big 3’s own poll concluded, the same in which 81 percent of Canadians said “no special rules” should apply to either foreign or domestic phone companies — the most oft-used argument by the cartel’s supporters.
The peak of the deceptive summer campaign, however, was the involvement of Canada’s biggest trade unions.
The Telecommunications Workers Union, along with the Communications, Energy, and Paperworkers union, the Canadian Auto Workers union, and the United Steelworkers union, staged a farcical day-long protest (pictured) in front of Industry Canada’s Toronto headquarters. They weren’t going to let Verizon storm into Canada and offer cheaper services to cell phone users.
This protest pit a few thousand union members against nearly 35 million Canadians who would greatly benefit from increased competition in the cell phone market. It’s a fight the federal government has waged for years.
“[Canadians] want to see enhanced competition, lower prices, better services in this area,” said Prime Minister Stephen Harper at a press conference in August. “Our government has pursued extremely consistently and extremely clearly a policy of fostering greater competition in this industry for the benefit of Canadian consumers over the past several years.”
At least in this scenario, the government did the right thing: forcing competition and cutting down the monopolies by freeing the market to as many players as possible. But that wasn’t enough.
In an interview with Bloomberg News last week, Verizon CEO Lowell McAdam revealed the plain truth: “Verizon is not going to Canada.” Stock prices for the Big 3 soared immediately. They had won.
Unfortunately in this case, ordinary Canadians got fleeced by the cell phone oligopoly and its union cohorts. Billion-dollar corporations convinced blue collar workers to go out and protest the prospect of lower phone bills.
A campaign of nationalist and protectionist rhetoric succeeded. Business and labor conspired against the Canadian consumer to keep prices high and keep out the specter of healthy competition.