Quote:
Originally Posted by isaidso
Agree 100%. People latch on to ideas that have no basis in fact because it sounds good in their head. The reality is that our telecom industry is a monopoly and the incumbents (Bell, Rogers, Telus) have, thus far, successfully blocked the introduction of any real competition. For those who don't know, those 3 own other brands like Koodo, Fido, Solo, Virgin, etc. so it appears like we have lots of competition but we don't.
Canada has obscenely high telecom rates compared to the rest of the world. We're being gouged and have been for decades. I paid $35 Australian for a month and received unlimited data, 500 free minutes of international calling, unlimited local calls, unlimited texts, etc. Canadian telecom fees are massively out of whack with what one sees elsewhere. It's not close at all.
|
Just to clarify, are you alleging that the three main carriers are engaging in illegal collusion (aka that they've formed a cartel?) That would be the only way in which an industry consisting of several large players who generally are all distributed across the market would be referred to as a monopoly. Otherwise it would be called an oligopoly. Without forming a cartel, an oligopoly does have competition. It isn't the same type of "perfect" competition as when you have nothing but price takers supplying non-differentiated products (commodities) but that wouldn't change with an increase in the number of players. If there is a cartel operating in an environment where that's illegal, generally the preferred remedy is to enforce the laws set up to prevent non-competitive behaviour.
There are many cases where an industry is either a natural monopoly or oligopoly due to barriers to entry. This is definitely the case with regard to mobile service since it requires a huge investment in time and money to create the physical infrastructure and there is only so much network traffic to serve and customers available, so having many companies building parallel networks doesn't tend to be feasible. Therefore, in order for new companies to get involved they have to purchase network access from the owners of the existing infrastructure.
One way to deal with this is for the government to create the infrastructure and sell access to the companies so that the infrastructure is a public good in the way that most roads are. Other than that, you can either force companies to sell network access to other companies using regulation, or rely on them deciding for themselves when/if it's profitable for them to do so. If you decide to force them to sell access to other carriers, I'm not sure it makes sense to force them to sell it to competing companies in the hope that this will lower prices because a) one of then main ways that carriers can potentially compete is through the quality and coverage of their networks and b) if the competitors pay enough to the infrastructure owning carriers for it to be profitable it won't lower prices, and if they don't you dis-incentivize investment in wireless infrastructure since it will be co-opted by competitors to be used against them.
The real take away is that even though people latch on to ideas like "more competition will always lower prices", in reality whether there is a smaller or larger number of competitors there is still competition. There are lots of factors that affect prices (certainly more than just population density) and there's no evidence that prices will fall with a 6
member oligopoly compared to 3. Just like whether a race car driver is racing against 2 competitors or 6 competitors they still have competition and still have an incentive to go as fast as possible.