Commentary: Tory government seems intent on interfering with market forces

Two announcements yesterday had me shaking my head as the theme song from the Twilight Zone played in the background. First, Rogers Communications announced that it was actually lowering the price of a data package for the highly anticipated iPhone, set to launch on Friday. Second, Industry Minister Jim Prentice requested a meeting with the heads of Bell Mobility and Telus Mobility to find a solution to the companies' plans to charge subscribers for spam and unwanted text messages received on their mobile devices.Do do do do do do do do, $30 for six gigabytes of data. (Rogers)Do do do do do do do do, "I believe this was a poorly thought-out decision." (Prentice)Rogers' caving to pressure from about 60,000 potential customers registered on the ruinediphone.com website is simply amazing. Does this bring back memories of the negative option billing debacle of the 1980s? It might but it shouldn't: 60,000 is a drop in the bucket for Rogers with more than seven million customers - less than 1% if you knows your guzintas (say it slowly you will figure it out).Besides, Rogers is the only carrier in Canada that can carry the iPhone, and will be for the foreseeable future, so it shouldn't make a hill of beans to top brass that 60,000 people are P-Oed with iPhone data pricing. In any event, there is no way to tell if all of those registered on the website are Canadian. Of those that are, only part of them will actually be existing Rogers subscribers and those with Bell, Telus or a regional carrier will likely have to break their existing wireless contract in the first place.For argument's sake, let's say that 80% of those 60,000 are Canadian. That makes 48,000. Now since Rogers has about 37% of Canadian wireless subscribers, 18,000 of those would be Rogers subscribers. For Bell, it would have 15,000 and Telus would have 13,000 subscribers in that group of 48,000. If half of Bell's and Telus' subscribers in that group, 7,500 and 6,500 respectively, and all of Rogers customers, 18,000, in this group wanted to buy the iPhone, the number of potential iPhone customers from this group would equal 32,000.It seems inconceivable that Rogers' brain trust would change data pricing so dramatically, even for a time-limited special promotion, because of 32,000 angry, yet potential new iPhone customers. The original announced price for six gigabytes was $100 per month. The more likely scenario is that Rogers knew all along that its data prices were going to spark controversy and public outcry, but waited until the last possible moment to "cave" before lowering data prices. If Rogers were really serious about giving customers a break, it would allow them to buy the iPhone without a contract, albeit at a significantly higher price and give existing customers a break on the full price of the phone without having to extend their contract by another three years.Meeting of the wireless mindsI did a double take when I read the statement from Minister Prentice. I was under the impression that the Conservative Party of Canada was all in favour of letting market forces work, and the idea of excessive regulation or government intervention was akin to a four-letter word...CRTC.Yet, recent actions would suggest otherwise: First reserving spectrum for new entrants in the Advanced Wireless Services (AWS) spectrum auction and now intervening in a service that may or may not affect that many people. (Most texters tell their parents to put them on plans that include a set amount of text messages per month.)These certainly aren't the good old days of Maxime Bernier where he singularly focused on deregulating the telecommunications sector and didn't care what he had to do to make it happen. He did such a good job that he was shuffled to Foreign Affairs. (A promotion? You be the judge, but it certainly was better than where he is now.) I wonder if the Bell and Telus are all wishing that Bernier still held the Industry post.Prentice insists he doesn't want to interfere with the day-to-day business of Bell and Telus, but added in a statement that he has a duty "to protect the interests of the consuming public when necessary. I believe this was a poorly thought-out decision." He said that the meeting, to take place before August 8, the day Bell's $0.15 per in-coming SMS charge comes into force, is to explain how the two carriers plan to deal with customers who receive spam and unwanted text messages "with a view to finding a solution that provides the best service to consumers at the best price."Is he actually going to tell Bell and Telus that they have to charge different SMS rates depending on the content of the message?Don't touch that dial, in the Twilight Zone, anything can happen.

Commentary: Tory government seems intent on interfering with market forces

News | July 10, 2008

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