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Weekend Reading: Privilege Edition

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Locked cell phone. Source: http://www.asyousow.org/csr/privacy_phone.shtmlSomething that annoys me about Canada is how much power the telco companies have over here: Bell, Videotron, you name it. These companies still have virtual monopolies in their markets. What especially annoys me is how this affects the mobile markets. We have two different networks in Canada that are incompatible with each other; one dominated by “Robellus”, and the other is a new network which is used by upstarts Wind and Mobilicity. Our 3G network is incompatible with the network in the U.S. which means that phones either need to support all possible bands or they need to be tailored specifically for the Canadian market. The problem is that the carriers in Canada have a lockdown, so it is almost impossible to buy a phone off contract or to purchase a phone and use it across multiple carriers, because the phones are carrier locked even if purchased outright.

In what other electronics market do things work like this? If I buy a computer, I’m not locked down to only connect to the internet via one particular company’s pipe! If I have a laptop, I can use wifi pretty much anywhere in the world no problem. Why is the cellular market on the other hand so convoluted and inefficient?

I understand that building up a network infrastructure is very expensive and that is one reason why the business model is a bit different. This would be fine assuming that the market is open to free competition, which it is not, and that the largest companies acquired their position legitimately, which they did not. The CRTC, Canada’s telco regulatory body, supposedly exists to level the playing field, but like any regulatory body, it is populated by former executives of the largest companies and it is biased toward the incumbents, protecting them from competition. It makes the monopolistic practices of these companies possible. It is difficult to enter the Canadian market due to a myriad assortment of laws and regulations that are in place to “serve the national interest”, but the only way one could read this with a straight face is if one takes the national interest to mean the interest of the largest companies.

So what could be a solution to this mess? Whenever anyone proposes any changes to the regulatory body, the companies call upon jingoism to protect their own interests. God forbid we make it easier for other companies to come in here and compete for the consumer. We need a regulatory body to protect the largest companies so that the consumer can be protected. 😉

Ok, enough with my rant, and on to weekend reading. 🙂

Blog swap

I took part in the Financial Motivation Blog Swap Round-Up and wrote What Motivates Me to be Financially Responsible over at Smart Money Focus, and he wrote Children Change Everything over here. Thanks for the great post, Joe!

Giveaways

Congrats to Forest from Frugal Zeitgeist and petra, our winners of the “What Investors Really Want” giveaway!

Don’t forget that Invest It Wisely is currently running a one year of blogging giveaway, with over $485 in prizes to be won!

Weekend Reading


Stock Picks: Hyperion Exploration (TSXV:HYX) (Beating The Index)

Carnivals
Economics
Investing
Miscellaneous
Personal Finance
Video

Hope everyone had a great weekend. 🙂

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Comments

  1. Thanks for the mention Kevin.

    And sorry for the cell phone mess. I guess that makes it less tempting to trade phones, if you only have two companies to choose from..

    • No problem Dr. Dean! When it comes to mobile there are actually three big companies (Rogers, Bell, and Telus), but they are disparagingly referred to by the singular “Robellus” due to the locking practices and the perceived collusion and lack of competition between them.

      There are new competitors but they still have a very small market share. One, Wind, got into some trouble for having too much “foreign ownership” IIRC.

  2. Kevin,

    Our local cable companies (like 2) are like this. It’s very frustrating because they don’t have to compete on service. I know that if/when I have to call my cable company, I should put aside 30 minutes…nice list of posts as usual.

    It was cool to see you had a Kurzweil article included. I find reading his site to be a nice change of pace while being very thought provoking.

  3. Thanks for the Link, Kevin. Preferred oligopolies are unfortunately a feature (or bug?) of our modern “democratic” system. I’m currently working my way through Michael Pollan’s “The Omnivore’s Dilemma”, and there is a similar environment created in the industrial food industry to benefit Cargill and ADM.

  6. Thanks for the mention Kevin, I really appreciate it!

    The big three have so much control in this industry, which is why we pay the highest rates in this country. More competition would certainly help. I think people need to pay more attention to this stuff. I hate to say this but I think the average Joe is more concerned about the latest score in (insert any sport), or too busy in life trying to earn a living, or what’s on TV tonight, to be really concerned about their cell phone bill.

  8. Thanks for the mention Kevin, I as well am locked up in this uncompetitive telecoms market. If mobile is bad, the ISP market is worse and comes down to literally 2 providers!!!!

    we are getting fleeced damn it 🙂