In little more than a week, COVID-19 completely altered everyday life in Canada. Many are either working from home, or getting laid off. Shops and restaurants have closed, and people are expected to keep distance between one another in the rare occasions they venture out in public. Telecommunications services are already central to our lives, but we’re now more reliant on them than ever.
In the months ahead, it’s likely these new patterns will cement themselves into more permanent ways of working, communicating and enjoying entertainment, which means it’s time to finally reckon with the telecom oligopoly that holds us hostage.
It won’t come as a surprise to any Canadian to hear that we overpay for telecom services. We pay among the highest prices in the G7 for our cell phone plans, while the telecom giants make more profit from mobile data than anywhere else in the world, despite Canadians using less than customers in almost every other country.
Meanwhile, the big telecom companies, including Bell, Rogers and Telus, have actually been raising internet prices in recent years, which were already inflated compared to other major countries. The companies claim the higher prices are justified by Canada’s land mass and the high quality of service provided, but ask anyone outside the big cities and they’ll tell you that’s not accurate. Moreover, the networks are struggling to keep up with the influx of traffic they’ve received since COVID-19 forced many Canadians to work and study from home, undercutting claims about service.
Telecommunications has always been an essential service that people need access to in order to live and work in the modern world. In recognition of this, governments have tried a range of measures from “skinny basic” bundles, shorter contract terms on cell phones and data-only plans to bring down prices, but they never have a lasting effect. Now, to fulfill his election promise, Prime Minister Justin Trudeau’s government is threatening the major telcos with new regulations if they don’t cut the price of cell phone plans by 25 per cent. But does anyone really expect that to last?
The telecom giants have established an oligopoly that allows them to make huge profits from what should be a public service. Bell made more than $3 billion in profit in 2019, and Rogers made more than $2 billion while emphasizing having “returned $1.7 billion to shareholders through dividend payments and share repurchases, up nearly 70 per cent.”
These companies shouldn’t get away with charging such high prices to extract massive profits from a service Canadians depend on. Instead, the government should use this period of high demand and increased reliance on these companies’ services to do what they should have done long ago: nationalize the telecom companies and run the service in the public interest.
A Roadmap For Nationalization
In the short term, not a lot would change about how Canadians access the services, given the necessity of maintaining social distance. They would still have service from Bell, Rogers, Telus, Shaw or whichever provider they use, but the suspension of internet data caps would be extended to all Canadians and made permanent, given that data caps aren’t necessary and serve only to boost profits. Further, basic internet service would be made free for everyone, along with a basic cell phone plan that could include unlimited calling and texting within Canada, a sizable bucket of free data and low-cost addons for additional data and international services.
This isn’t pie-in-the-sky thinking: the British Labour Party presented a plan last year to take internet infrastructure into public ownership, ensure full fibre and 5G technologies were rolled out across the country, and provide internet free to everyone. The Conservatives attacked it, as was to be expected, but even their own analysis concluded the private market had failed to serve the public, and a national monopoly would effectively achieve that goal.
Under such a plan, the cost of television and landline services would also be significantly reduced, with a free package for seniors. Bell’s Crave streaming service would also come under public ownership, and given it’s the only major Canadian-owned platform other than CBC Gem, it could also be made free to all Canadians during the COVID-19 lockdown to meet their need for entertainment.
For those who don’t have access to these services because they couldn’t previously afford them, SIM cards and inexpensive cell phones could be dispatched via Canada Post.
These changes would have significant benefits for people while COVID-19 restrictions remain in place. It would effectively eliminate a major bill, averaging $190 per month, with people in rural areas paying more than those in urban areas, despite often having worse service, and people in the bottom 20 per cent of earnings paying 9.1 per cent of their incomes for telecom services, while the highest-earning 20 per cent pay just 1.8 per cent of their incomes.
It would also make it easier for people to keep in touch with one another, ensure they can keep working from home — if they have that option — and increase their access to news and entertainment online. However, the benefits of nationalization would become even greater once the immediate emergency is over and restrictions are lifted.
After The Pandemic
While reorganization of the telecom companies into a single entity could begin before the restrictions are lifted, the bulk of the implementation would occur once things get back to normal. The telecommunications services on offer to Canadians would be consolidated into a simpler and less expensive suite of services, recognizing their essential nature, and new stores could bring together Canada Post and the public telecom service. The connection with Canada Post would also ensure service is easily accessible in rural parts of the country.
It wouldn’t be hard to staff the new Crown corporation, given the telecom companies already have large workforces of skilled people who could be transferred into new roles, with the caveat that compensation structures would change for those on the sales side to provide a dependable salary instead of incentivizing them to push certain products to earn higher commissions.
Workers would be provided with assistance while COVID-19 restrictions remain in place, and efforts could be made to ensure workers in retail stores and cell centres are able to retain their jobs through the implementation of a shorter workweek, making it a leader in a growing global movement.
The network infrastructure would also be combined into a single entity, with plans drawn up to expand the coverage of fibre internet, continue the build out of 5G mobile networks and ensure rural, northern and First Nations communities get the high-quality services they’ve so long been denied because they were unprofitable to the private oligopoly — in the same way that the British Labour Party had planned.
Public internet utilities are already being built in the United States, something Senator Bernie Sanders wants to massively expand, and communities that already have them find the service is not only faster, but significantly cheaper than what the private telecom oligopoly provides — to the degree that even Republican politicians have had to praise them.
As writer Evan Malgram observed in Dissent Magazine, “When people experience the benefits of a public network in their immediate lives, they see it more as an issue of common sense than one of partisan politics.” Public internet is cheaper because it doesn’t have to deliver a profit for shareholders, and because by building a single public network, instead of overlapping private networks, customers aren’t paying multiple times for redundant service.
There’s no denying the risk COVID-19 poses to the lives of vulnerable people in Canada and around the world, which is exactly why we need to remain at home and follow advice from public health officials. Yet this pandemic also offers us an opportunity to rethink the aspects of our society that haven’t been functioning properly in a while, and especially at a time of crisis.
Canadians depend on telecom services in so many aspects of our lives, and we shouldn’t be gouged when we sign up for access to them. Instead of more regulations that are doomed to fail, it’s time to accept that essential services should be owned by, and run in the interests of, the public. Telecom is the perfect place to start.