Montreal Tech Watch

Earlier this week, the Canadian government promised to overrule the CRTC decision, after a massive consumer backlash powered by online petitions and social media tools.

It’s an achievement for the non-profit organization openmedia.ca, which led the successful campaign, and also a demonstration of the outreach of social networks, with Canadians spreading the outrage on Facebook, twitter, and various other online outlets, in an amusing parallel to protests in other parts of the world, also supported by the same social networking tools.

It’s not over yet though. The decisions has just been postponed to 1st of March, and while this specific CRTC ruling focused everyone’s attention, it’s only the last in a series which favoured a handful of telecom giants, perhaps the straw that broke the camel’s back.

As mentionned in earlier posts, the Canadian telecom landscape suffers from too few providers, and at the same time a convergence doctrine. Perhaps not seeing enough revenues in their respective regional monopolies, Bell, Videotron, Rogers, Telus or Shaw are betting on vertical integration, from media control to network infrastructure! This stranglehold drives prices up and also makes it very easy to slow down adoption of new services like netflix which would make a dent in their cable TV business.

What would a free market in telecommunications be in Canada? If we look at the example of the web hosting industry, the competition is global and there is absolutely no regulation. A web hosting provider cannot ask for artificially bumped prices because competitors from other countries can easily advertise lower prices for the same exact product. As a consequence, prices reflect cost of hardware, cost of electricity, cost of bandwidth and perhaps also staff costs. Arrogant web hosters or companies with inadequate products just go out of business quickly, creating an innovative, healthy and growing industry.

For instance, we can see at iweb.com a new smart server available at $99/month, with 10TB of bandwidth available. If you calculate away hardware, electricity, that means one GB costs much less than one cent, perhaps one tenth of a cent! That means that the proposed pricing of $2/GB for additional consumption beyond 25GB/month is completely absurd and does not reflect market costs. Charging by GB is a Bell-esque invention and has no accounting or costs explication. If they wanted to charge for the extra routers, switches and cables necessary for the last mile connection, it would make much more sense to offer higher monthly rates.

What can be done? The CRTC proved multiple times their lack of know-how and expertise about telecommunications subjects, both in the ISP industry and also in the wireless industry. We’ve had a sad status quo in the number of telecom companies in Québec and Canada, networks are expanding at a slow pace, and marketed services are the same advertised 5 years ago. Instead, we should aim having fierce competition and exponential growth, both in quantity and quality of products, by deregulating the industry, lifting barriers of entry, and any other measures that would create a completely free market.

The work of Vancouver-based openmedia.ca is inspiring and there might be also something to be done here in Montréal and in Québec. Who’s up for action?