Government's effort to publicize Big 3 cell service prices isn't driving them down, advocates say
A new report shows the major service providers aren’t dropping their prices, despite Ottawa’s threats
Publishing the cost of major wireless companies' cellphone services isn't making those services any cheaper, affordability advocates say.
This week, the federal government released its first ever cellphone price tracker report, which shows there has been little movement in prices since the Liberals promised to reduce the cost of cellphone services by 25 per cent.
The tracker shows that most of the provinces surveyed didn't see a reduction in cell service costs between February and June 2020. Quebec — a market with a high degree of competition among cellphone services — was the only province to report a decline in prices.
"It's really a good example of how these companies don't want to be held to account," said Laura Tribe, executive director of Open Media, an organization that advocates for internet access. "The prices haven't come down. There really hasn't been any change."
The Liberals' last election platform included a promise to reduce wireless prices by 25 per cent. After winning a second mandate, the Liberals committed to releasing quarterly pricing updates for plans that allow consumers to use their own devices, offer unlimited talk and text and provide users with between 2 and 6 gigabytes of data.
Tribe and other critics of the government's strategy say the way Ottawa is collecting pricing data from the Big 3 wireless companies –– Rogers, Telus and Bell –– is flawed because it only examines the prices of their discount brands (Fido, Koodo and Virgin) and lower-gigabyte plans.
"In the way that the government choose to go about this process, it was impossible for them to succeed," Tribe said. "By picking specific plans and saying these plans are going to fall in price, [it] left a huge loophole for the companies to say if we don't offer these plans, you can't measure if our prices are coming down."
The Liberals have set a target of reducing rates by 2022. John Lawford is executive director of the Public Interest Advocacy Centre, which acts on behalf of consumers. He said he isn't convinced that goal will be met in a meaningful way — unless the government forces the Big 3 to lower their prices through regulation.
"This whole exercise is a bit of a political effort to demonstrate that the government cares about consumer cell phone pricing," Lawford said. "But it is a hard area to actually create value unless the big companies want to play ball. And they don't voluntarily play ball."
'They must meet these targets' — Bain
Science and Industry Minister Navdeep Bains insisted the government will end up reducing cellphone rates — and said he is prepared to use the federal government's regulatory power to drive down prices if necessary.
"They must meet these targets," Bains told CBC News. "Failing to do so, we will look at all regulatory tools at our disposal to promote further competition for us to see prices come down."
Bains has said in the past those regulatory "tools" could include compelling the Big Three to open up their infrastructure to other companies that can provide virtual cell phone networks at cheaper rates.
While he acknowledged the report only covers lower-gigabyte plans, Bains said a reduction in the prices of some plans should have an impact on pricing across the board.
Bains suggested the pandemic may have discouraged cell companies from dropping their prices as they prioritized maintaining their infrastructure during a period of unprecedented internet use.
Samer Bishay is the CEO of Ice Wireless, a small wireless firm. He said a pandemic — when a great many people are under heavy financial pressure — is exactly the right time to ramp up pressure on large wireless firms to cut their prices.
"Now more than ever, Canadians need to save money," he said. "During a pandemic, you need choice and affordability."
We've made 'tremendous efforts,' says industry group
The Canadian Wireless Telecommunications Association, which represents Rogers and Bell, said Canada's legacy wireless providers have made "tremendous efforts" to keep Canadians connected during the pandemic. The CWTA also said the cost of data has decreased over the last five years by 50 per cent, and by 25 to 30 per cent between May and September of last year.
"Our members will continue to compete vigorously to provide Canadians more value and affordable choice," CWTA spokesperson Greg Burch said in a media statement.
Telus, which is not a member of the CWTA, said in a statement its brand Public Mobile offers 2-gigabyte and 4-gigabyte plans that surpass the government's pricing benchmark.