Canadian Wireless Carriers Making A Killing During COVID-19, Won't Remove Caps 'For Safety'

Wireless

from the pandemic-price-gouging dept

Canadians already pay some of the highest prices for mobile data in the developed world thanks to limited competition and feckless regulators. With COVID-19 forcing everybody to stay at home, rural Canadians are now being pummeled with even higher bills than ever before. Especially those in rural areas forced to use capped, throttled, and otherwise restricted wireless lines as their primary connections:

“Rosette Okala was expecting her Rogers bill to be higher last month ? because she’s working from home during the pandemic and doesn’t have unlimited internet ? but not hundreds of dollars higher. It shot from about $160 per month to $540. Okala lives in a part of Pickering ? just outside Toronto ? that is considered rural. So she has to connect to high-speed internet through a cellular network because her area lacks cable or fibre optic infrastructure. She pays $145 a month for 100 gigabytes, anything above that is $5 per GB.

“This is just a slap in our face,” said Okala. “We [rural customers] pay huge bills just to be able to do something basic that most people take for granted.”

Analysts have long noted that usage caps and overage fees aren’t technically necessary as they don’t really manage network congestion. Like their US counterparts, Canadian broadband providers have temporarily lifted usage caps on fixed-line networks. But they’ve done nothing about the same restrictions on wireless, despite the fact that such connectivity is the only option many rural users have. In part because of the fact that, despite receiving billions in subsidies, many of these same companies have failed to uniformly deploy fixed-line broadband and fiber.

Given the sophisticated nature of network deprioritization and throttling technology, carriers can now easily offer “unlimited” data plans that throttle your connection after a set amount of bandwidth. Or restrict the consumption of higher definition video (Verizon bans HD and 4K video entirely on some mobile plans here in the US). Instead, consumer groups say, wireless carriers in the US and Canada haven’t lifted such restrictions because price gouging uncompetitive markets is the entire point:

“Data caps are definitely unnecessary,” said Tribe. “We see them as a punitive mechanism to make sure that people suppress the amount of data that they use and overpay when they go over what they want.”

As an added bonus, they also create a system carriers can use to hamstring competition, by making other companies’ content count against the cap, while their own streaming services don’t. For its part, the Canadian telecom lobby insists that it can’t lift usage caps or temporarily waive overage fees because it’s an issue of “public safety”:

“The issue comes down to the capacity that those networks are actually able to handle,” said Rob Ghiz, executive director of the Canadian Wireless Telecommunications Association.

He says there’s a difference between broadband in urban areas, where caps have been lifted, and rural areas where they rely on cellular connection through a hub, which are designed using a low-band spectrum ? great for distance, but the system can’t carry a lot of data.”

But again, data routinely shows that monthly caps don’t manage congestion, since a limit on overall monthly usage doesn’t do much to prevent network issues at peak times. There’s a universe of network management tricks companies can use to mitigate this impact, which is why so many offer “unlimited” data plans that aren’t really unlimited. These carriers could help out by offering such plans to these rural users, then throttling the connections during peak congestion or banning HD video. But it’s more profitable to do nothing, then point to the congestion bogeyman and shrug.

Much like the States, this is all made possible due to mindless mergers and consolidation, which has resulted in little real competition among the remaining 3 major Canadian wireless providers (something the US is copying with the recent Sprint T-Mobile merger). Combine that with feckless revolving door regulators whose primary interest usually lies in protecting dominant carrier revenues, and the end result is never particularly surprising.

Filed Under: canada, data caps, wireless
Companies: rogers