The good folks at Telus are at it again, with another dose of fear-mongering of what the evil bogeyman known as Verizon might bring when and if it enters Canada. On the company’s policy blog, regulatory vice-president Ted Woodhead recycles some of those old yarns and adds a new one or two. You know what that means, pardners: gather round for another session of Reality Checking (season eight, episode 12).
Bogeyman #1: Verizon won’t be anyone’s white knight. It’ll only come into Canada and charge high prices, like it does in the United States. “If Verizon enters the Canadian market, it will still have analyst expectations to meet, investors to answer to, and brand value to protect. Its actions will be driven by profitability, revenue growth and return on investment – not becoming Canada’s national discount brand,” Woodhead writes.
Reality check: No matter what happens, Verizon’s network and therefore its service won’t be as good as the Big Three’s for many years to come. Will the company charge Canadians the same amount for crappier service, and would Canadians put up with that? That’s mind-boggingly illogical. Also, the incumbents believe federal government ministers are sweet talking Verizon into coming to Canada. If that is indeed happening, wouldn’t one of the first things out of those politicians’ mouths be: “We want lower prices?!?” If it isn’t, then what the hell are they doing down there?
Bogeyman #2: Smaller regional carriers such as SaskTel and Videotron could get shut out of the auction by Verizon, thereby shafting residents in less-populated parts of the country. “The auction would become a battle of the deepest pockets with Verizon easily outbidding all new entrants and regional carriers for as much of the enormously important 700 MHz spectrum it can get, along with potentially shutting out one of the national carriers.”
Reality check: Clearly Mr. Woodhead remembers the 2008 spectrum auction, where Wind Mobile – backed by giant international wireless company Orascom – nailed down all the spectrum across every province. Oh no, wait a second… that didn’t happen. A lowly Canadian company, Videotron, did everything in its power to keep that big foreign devil out of Quebec, and outbid it at every turn. Regional players have every reason to blow the bank to keep Verizon out; the U.S. company, as Telus notes in Bogeyman #1, has to generate a reasonable return on investment. Either it cedes spectrum to those defensively bidding regional carriers or, if it does indeed blow the bank, it will most certainly roll out services in those regions in order to get some sort of return. Damn, there’s that pesky logic again.
Bogeyman #3: Bye-bye investment into rural communities, since Verizon will drive spectrum prices up in the regions. “This will unnecessarily suck money out of the industry that would otherwise go towards technology and infrastructure, particularly outside the biggest cities.”
Reality check: See the above reality check. And also, if competition increases in less-populated areas, you betcha investment will too (with apologies to Sarah Palin).
Bogeyman #4: Verizon is a U.S. company that hands its users’ information over to the U.S. government. “It’s [sic] entry into the Canadian market would require significant oversight by our government to protect the privacy of Canadians.”
Reality check: Holy crap, is he being serious? Pretty much every service that runs on cellphones, from email to Facebook to Twitter and so on, routes through the United States. Actual phone calls and text messages may be the least of privacy advocates’ concerns. Also, how about that LTE network that Huawei built for Telus? You know, the same company that both the United States and Australia banned from providing telecom equipment on concerns that it is spying for China? Even the government of Canada has those same worries.
The deadline for applying for the next spectrum auction – and therefore the de facto deadline on whether or not Verizon is coming or not – is fast approaching, on Sept. 17. Are there more whoppers coming from the incumbents between now and then? The only thing left, really, is the suggestion that Verizon will kill your puppy.