TORONTO — In its third report, released today, the C.D. Howe Institute’s new telecommunications policy working group — which includes executives from Bell, Rogers, Telus, Cogeco, Eastlink and Shaw, among others — says cellular phone services have seen a 25% price drop over the past five years, which they say meets Ottawa’s mandated wireless rate cut.
That means, the group says, it’s time to shift the focus of telecom policy debates to other issues, such as the modernization of the CRTC and rate-setting challenges for mandated access.
Citing data from Statistics Canada’s consumer price index, the telecom group says cellular services have dropped 25% in price from January 2016 to December 2020. The group suggests Statistics Canada’s reporting is “methodologically robust and based on solid empirical work”, whereas the approach used by Innovation, Science and Economic Development Canada to determine the federal government’s 25% price reduction target, which is based on a review of wireless prices of certain packages advertised on providers’ websites, “may lack accuracy and validity.”
(As a reminder to our readers, the federal government has been very clear it wants wireless providers’ prices to come down 25% over two years, starting in January 2020, not 2016. It’s worth noting the feds are targeting certain low-cost, limited data allowance packages. Statistics Canada’s approach to calculating the cost of cellular services appears to be broader in scope, taking into account household spending.)
“Accurately assessing prices across time and jurisdictions for telecommunications involves resolving differences across tiers for service and bundled pricing for a diversity of consumer profiles,” reads a press release issued by C.D. Howe today.
In its report, the working group makes a number of recommendations, including:
- Policy discussions around telecommunications pricing in Canada should rely on methodologically robust price comparisons and rigorous tracking of the actual costs facing consumers;
- The debate over critical issues in telecommunications policy should shift its focus from pricing due to the 25% price drop in cellular services over the past five years; and
- The federal government should improve the accountability, internal capabilities and timeliness of decision-making at the CRTC.
With regard to modernizing the CRTC, working group members suggested “regular reporting and benchmarking of CRTC timelines (e.g., relative to other tribunals and foreign counterparts) could promote greater timeliness of decision-making,” reads the report.
In addition, the working group expressed concern in the report about what they see as “the CRTC’s lack of the required internal expertise to understand and analyze many aspects of the telecommunications infrastructure.”
Some options for CRTC reform suggested by members of the working group include:
- Commissioners be appointed to the CRTC with specific experience in the telecommunications and technology-based industries;
- The CRTC create and appoint a chief technology officer position to assist the Commission in being “more in tune” with developments in, and the evolution of, the telecommunications industry in Canada and around the world;
- Specific time limits be imposed for the CRTC to issue decisions, inspired from other regulatory models such as the U.K.; and
- The creation of advisory councils, similar to those in place with the U.S. Federal Communications Commission, to assist the CRTC staff and commissioners and “provide opportunities for continual dialogue around developments and challenges facing telecommunications.”
The working group says its next communique will address the framework and timeliness for allocating spectrum.
For more information and to access the telecom policy working group’s third report, please click here.
