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

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


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  • identicon
    Anonymous Coward, 15 May 2020 @ 6:29am

    "The issue comes down to the capacity that those networks are actually able to handle,"

    If that was true, customers would not be running up massive bills, but rather complaining that they cannot work from home because their Internet connection keeps falling over.

    reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Coward, 15 May 2020 @ 7:18am

    "That's so hot," moaned Richard Bennett.

    reply to this | link to this | view in chronology ]

  • identicon
    Dave, 15 May 2020 @ 7:28am

    Rob Ghiz is a former premier of Prince Edward Island.

    reply to this | link to this | view in chronology ]

  • icon
    crade (profile), 15 May 2020 @ 7:35am

    "Canadians already pay some of the highest prices for mobile data in the developed world thanks to limited competition and feckless regulators"

    Thanks in part to this maybe, but to be fair, this sort of Infrastructure that is costed based on area and paid for by population also has us at an honest disadvantage.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 May 2020 @ 8:29am

      Re:

      oh, so they will take all this "extra" money that they are taking from their customers and use it to expand the networks in these areas?
      They say they need to charge this amount as the network can't handle it (but as another poster observed, that's BS cause as long as you pay more the network handles it just fine). So if they network 'can't' handle it it obviously needs to be upgraded.

      I'm gonna take a random guess and say nope they'll waste it on bonuses for upper management and dividend so they share holders don't complain about the bonus's.

      reply to this | link to this | view in chronology ]

      • icon
        crade (profile), 15 May 2020 @ 9:33am

        Re: Re:

        No, it's just if you have less customers per tower and other infrastructure it will naturally cost more per person to cover the cost of building and maintaining them.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 15 May 2020 @ 9:41am

          Re: Re: Re:

          And that relates to unnecessary data caps how? The install, running and maintenance costs of infrastructure is a fixed cost, and should be covered by base pricing and not extra charges, where something like a pandemic leads to windfall profits.

          reply to this | link to this | view in chronology ]

          • icon
            crade (profile), 15 May 2020 @ 10:01am

            Re: Re: Re: Re:

            I wasn't saying anything related to unnecessary data caps I was commenting on the quote I attached to my comment about base prices

            reply to this | link to this | view in chronology ]

          • icon
            crade (profile), 15 May 2020 @ 10:08am

            Re: Re: Re: Re:

            Just saying I would expect out prices to be one of the highest in the developed world because our costs per person to provide the service will be one of the highest in the developed world.

            reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 15 May 2020 @ 10:22am

              Re: Re: Re: Re: Re:

              Probably not true, as most of your population lives along the southern border, where it is quite dense, and almost nobody lives in the bulk of Canadian land mass.

              reply to this | link to this | view in chronology ]

              • icon
                crade (profile), 15 May 2020 @ 12:07pm

                Re: Re: Re: Re: Re: Re:

                Most of the places where "no one lives" have their cell access subsidized by those who live near the border

                reply to this | link to this | view in chronology ]

                • icon
                  R.H. (profile), 15 May 2020 @ 5:36pm

                  Re: Re: Re: Re: Re: Re: Re:

                  The original article is about someone who lives in a rural area just outside of Toronto. It's on Lake Ontario. I think that qualifies as the "southern border" of Canada.

                  reply to this | link to this | view in chronology ]

              • icon
                crade (profile), 15 May 2020 @ 12:18pm

                Re: Re: Re: Re: Re: Re:

                Every community in Nunavut has cell coverage here.

                I'm certainly not trying to say they aren't still overcharging the hell out of us, I'm sure they are but even if we had great competition and laws I would still expect us to have to pay more than signapore does to cover our country in cell access

                reply to this | link to this | view in chronology ]

                • identicon
                  Anonymous Coward, 15 May 2020 @ 12:55pm

                  Re: Re: Re: Re: Re: Re: Re:

                  Every community in Nunavut has cell coverage here.

                  And just how many is that, 10 or 15, or maybe 100? It involves an insignificant number of towers compared to a single metropolitan area.

                  reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 15 May 2020 @ 2:45pm

      Re:

      "costed based on area" is an oversimplification. A cell tower can cover a 150 km radius, at the extreme high limit (seen in very flat rural areas; very hilly areas could reduce that by as much as 95%). Low-population areas need less infrastructure.

      Pickering, for reference, has 97500 residents in 230 km²; not free riders by any measure.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 May 2020 @ 8:50am

    How you know

    When you act or perform worse than your American peers you know you're a shitheel.

    reply to this | link to this | view in chronology ]

  • identicon
    Ed, 15 May 2020 @ 10:26am

    Wireless companies are slime, What's new

    I actually have a couple of observations;
    First, if you have a plan with data caps, keep track of your data used.
    Next, If your employer requires you to be on continuous video chat to prove you are working, the employer should pay for the data, not the worker.
    According to my math, she used about 75 additional Gbytes of data at a cost of $375 additional. Go out and buy a second hotspot (or probably just a second SIM card and account) and switch mid month to get an additional 100 Gb. for $160. It's a strange way to save $200/month, but the wireless companies are slime and will bill you as much as they can.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 15 May 2020 @ 11:52am

    Prrhaps usa and canadian customers should get together and raise hell, not solely with the various companies concerned but with politicians. They are all obviously tared with the same brushes, charge as much as possible for as piss poor service as possible, with as pathetic customer service ss possible! I cant remember the exact circumstances now but it was some reason Virgin, i believe, gave for having to keep things how they were. Total bullshit reason which politicians could have squashed but, just as in usa, the vote went to the company. Have to wonder if for the same reasons, too many kickbacks to those politicians and far too little consideration for the people they're supposed to represent!

    reply to this | link to this | view in chronology ]


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