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Breaking News: Competition Bureau Slams Bell for Ripping People Off

Bell was slammed with the highest fine possible today for ripping people off for bundled telecom-media-internet, $10 million. The Competition Bureau meted out the stiffest punishment it has and arrived at a settlement out of court that will also see Bell pay the $100k costs the bureau sunk into the investigation.

Here’s what the Competition Bureau’s press release had to say:

The Bureau determined that, since December 2007, Bell has charged higher prices than advertised for many of its services, including home phone, Internet, satellite TV and wireless. The advertised prices were not in fact available, as additional mandatory fees . . . were hidden from consumers in fine-print disclaimers.

Astounding. Incredible. WTF?

I just heard Melanie Aitken, the Director of the Competition Bureau, talking on the CBC. She’s nobody’s fool, and we could only wish her tools were stronger and that instead of just looking at pricing and advertising, as important as they are, the Bureau could delve deeper into the very structure of the telecom-media-Internet industries of which Bell and its deceptive practices are a part.

That Bell is not exceptional in this regard is illuminated a bit further when we recall that it was less than a year ago that Rogers was also slammed by the Competition Bureau. In that case, Rogers was using the false advertising claim that its new, down market wireless phone service offered “fewer dropped calls than new wireless carriers”, an obvious — but completely false — attempt to cast aspersions on the first new competitors to enter the highly concentrated Canadian wireless market in years. So, chalk one up for consumers and competitors courtesy of the Competition Bureau.

All of this is, as I said, all to the good. It could, however, be even better when it comes to integrated telecom-media-Internet industries in four ways.

First, and again as I just said above, it needs to look closely at the structure of these industries (see here for related post and evidence).

Second, it needs to effectively deal with the fact that these industries are highly concentrated by the conventional standards of Concentration Ratios (T1, 2, 3 and 4 players control X% of market) and the Herfindahl-Hirschmann Index (HHI) (Market share of each player squared  and summed). The trends in Canada are also high by global standards – at least twice as high as in the U.S.

For those who like to watch how sausage is made, you can see some of the data backing up these claims in my presentation on the state of telecom-media-Internet concentration in Canada as part of my work with the International Media Concentration Project out of Columbia University. I am in the process of finishing the data collection for 2010 and will update soon.

The levels of concentration are not getting worse; nor are they getting any better. They’ve stayed pretty steady for most of the last decade at a high level.

Third, we need learn how to talk about communication, media and values. The fact that media concentration levels have stayed steady, even if at a high level, might be good enough for some people, but I don’t think it is.  Why?  Because it does not serve to maximize the diversity of voices available and the range of free and creative expression to as many people as possible.

Taking high levels of concentration as a given adopts the technocratic standards of the bureaucrat, like the CRTC which states that its goal is to promote “as much diversity as is practicable“. The last term is entirely procedural, rather than normative. Compare ‘as much diversity as practicable’ with the standard I introduced above regarding the need to strive fro the maximum range of voices and freedom of expression possible.

The CRTC eschews Facts because it refuses to do much of its own original research. It’s feelings about norms and values are even more suspect. Indeed, even the old sign hanging over it’s front door, at least it’s web page, “regulation in the public interest” disappeared from all public documents sometime in late 2009.  The regulator, in sum, has intentionally fenestrated itself in terms of both Facts and Norms, suggesting that not only is it poorly equipped but not all that interested in doing the job at hand.

Conservatives like to desparage this kind of talk as “aspirational language”, or words that convey some sense of how things might be or what’s worth striving form. Liberal fantasies, they smirk.

Umm, I think we should talk about what we want. That, in some ways, is what democracy is all about, organizing, talking, and translating into action some notion of what we want, not in all domains, but in those that constitute the ‘networked digital agora’, yep, we wanna talk.

Until we learn how to talk about and reconcile both the Facts on the ground with the ‘Norms’ conveyed through the language we use, as one of my fav social theorists/philosphers, Jurgen Habermas (and after The Structural Transformation of the Public Sphere, for you insiders) might put it, we will be forever unable to properly deal with the questions before us.

But back to the more immediate question at hand, and my fourth suggestion in terms of dealing with problems that, if not endemic, certainly seem to crop up with regularity in Canada’s telecom-media-Internet industries.

Bell got caught screwing people over and that’s a great deal. Slimy behaviour, however, can occur equally in markets that are topsy turvy with ruinous competition or heavily concentrated. In the case at hand, I’d say we have slimy behaviour by Bell and Rogers for two years running in highly concentrated markets. We need to think about that fact with eyes wide open, then decide what we wanna do about it.

And to this end, I would say that the Competition Bureau and CRTC should, after the latter in particular radically rethinks its raison d etre and way of doing things, work together on studying telecom-media-Internet markets in Canada and pick a course of action. The ‘maximum reliance on market forces’ mantra foisted upon the CRTC by Cabinet Directive from the Conservative Government in 2006 has gotta go.

Things cannot proceed on the terms now taken for granted but at the very least must take as a minimal model the congenial hand-in-hand approach taken by the Dept. of Justice and the FCC in the US in the recent approval of cable giant Comcast’s take-over of NBC-Universal. Some, indeed many, still refuse to accept this as a good deal, including FCC Commissioner Michael Copps, who wrote a scathing rebuke of the approval.

By Canadian standards, however, the Comcast NBC-Universal decision, truly is a ‘beacon of hope’ compared to the standards that we have now. To see the Competition Bureau and CRTC walk hand-in-hand with a real sense of the ‘facts’ on the ground and the values of the most open and democratic communication and media system possible clearly in sight would be a really decent place to start.

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