Home > Internet > Canada’s Wireless Wars: Bell Media Exec’s Memo to News Directors

Canada’s Wireless Wars: Bell Media Exec’s Memo to News Directors

Since reports in mid-June that Verizon might be poised to enter the Canadian wireless and mobile phone market, Bell, Rogers and Telus have fought tooth-and-nail against that happening. That opposition, as this post shows, not only includes the full-on public relations assault, but a series of emails from Bell Media President Kevin Crull calling on the telecom and media giant’s news directors to cover a report favourable to the incumbents’ main arguments as well. 

Key elements of this summer’s wireless wars are well-known: Telus has launched a lawsuit against elements of the Government’s wireless policy that prevent the incumbents from acquiring Wind, Mobilicity and Public. Rogers, Bell and Telus have held private meetings with Industry Minister James Moore to plead their case that the Conservative Government’s wireless policy is chock-a-block full of loopholes that give unfair advantages to foreign telecom giants such as Verizon at the expense of Bell, Rogers and Telus — and Canadians. Full page adverts taken out by the incumbents are appearing daily in newspapers across the country in a bid to convince Canadians of the same points. 

BCE CEO George Cope penned an open “Letter to Canadians“; BCE Director Anthony Fell excoriated the Harper Government for its supposedly unfair wireless policy; the Globe and Mail and Toronto Star have editorialized in support of the big three telcos’ position as well; the Canadian Council of Chief Executives took the unusual step to write the Prime Minister in order to do the same. The Communications Energy and Paperworkers Union, the largest union representing telecommunications workers in the country, is also singing from the same page as the big three on this issue. The Canadian Wireless Telecommunications Association (CWTA) — the industry association that represents the collective interests of Bell, Rogers and Telus — has been selectively plucking evidence about cheaper wireless rates in Canada relative to the U.S. while distracting attention from the fact that, relative to the rest of the worldprices for nearly all cell phone service plans in Canada and the U.S. are high. 

So far, however, these tactics appear to have backfired. Prime Minister Stephen Harper and Industry Minister James Moore have lambasted the companies’ campaign as dishonest, while pledging to stay the course. The Conservative Party has launched a website to counter the incumbents’ public relations campaign and trumpet the Government’s position. Views opposing the incumbents’ position have also been getting some play as well (see here and here). Canadians also appear open to the idea of a new player such as Verizon entering the market (here). 

While there is certainly room for debate, by and large, Harper, Moore and the incumbents’ critics are correct, and Canadians’ sentiment in the right place. The rules the incumbents are grousing about are neither new, novel, nor filled with loopholes. For well-over a decade the consensus in international circles has been that the more competition in wireless, the merrier. The policy at home has taken some time to catch up with this reality, but the rules now being cast as unfair have been the cornerstones of the Conservative government’s wireless policy since 2007.

The only real differences are that Canada embraced these ideas late in the game relative to others, no doubt due to the incumbent’s intransigence, while foreign ownership rules continue to be far more restrictive in Canada despite last year’s decision by the Government to relax them “for companies that have less than a 10 percent share of the telecommunications market”.  The basic ingredients of the international consensus are straight-forward, although everywhere their introduction has been fiercely contested by incumbents bent on maintaining their dominant market positions:  spectrum set-asides for new entrants, reduced foreign ownership restrictions, network tower sharing agreements and open interconnection rules.

To get a glimpse of the vintage of these basic principles and rules, take a look, for example, at the OECD’s Communication Outlook from 1999 (p. 28), and every volume since then, or the authoritative collection of chapters in William Melody’s edited Telecoms Reform from 1997. I will write more about the finer points of wireless policy in the near future. The point that I want to stress for now, however, is that the big three’s scorched earth approach on this issue is leading to other interests and important principles being thrown under the bus.

Some employees at Rogers and Bell, for instance, report being brow-beaten by managers to email a form letter in support of the companies to the government. More troubling, and a point that has not yet seen the light of day, is a chain of emails originating from Kevin Crull, the President of Bell Media — the largest media enterprise and one of the largest news organizations in the country — calling on news execs and journalists across CTV, CTV2 and local TV channels and radio stations across the country to cover a study that suggests that the state of wireless in Canada is not as bad as its critics claim. A copy of the emails, with the names of non-executives removed, can be found here.

The emails begin by setting out a couple of definitional issues and then distill the two key talking points to be covered: (1) that cellphone rates in Canada have fallen in recent years and (2) that they are generally cheaper than in the US. By the end, the message is clear: “Kevin Crull our President wants us to give this report some coverage….” and “Kevin is asking if this report can get some coverage today on Talk Radio. National news is covering for TV”.

By the time the chain of emails is done, a veritable whose who of BCE’s executive suite have been brought into the loop:  Wendy Freeman, President CTV NEWS; Richard Gray (Head of News, CTV2); Ian Lurie (COO Astral Radio); Kevin Bell (General Manager/Sales Manager CTV Vancouver Island/C-Fax and KOOL FM); Eric Proksch, (VP and GM for Bell Media Radio); Charles Benoit (Astral); Chris Gordon, (President of Radio and Local TV news); Mirko Bibic (Executive VP and Chief  Legal and Regulatory Officer).

Perhaps this is not all that surprising. The stakes are high, given estimated wireless revenues of over $20 billion in 2012. Moreover, with the combined market capitalization of Bell, Rogers and Telus tumbling by roughly $8.4 billion (from $85 billion to $76.6 billion) between June 17 when Steven Chase and Rita Trichur at the Globe and Mail first broached the possibility of Verizon entering the Canadian wireless industry and yesterday, August 26th, the companies are doing whatever it takes to preserve their entrenched dominance of the Canadian wireless market and the bloated market capitalization levels that go along with a cozy oligopoly.

While it is understandable, perhaps, that BCE would deploy its journalistic resources to protect its place within the wireless oligopoly, this is not good for journalism or Canadians. It casts a cloud over the independence of CTV national news as well as news programs across the CTV2 network and Bell Media’s local tv and radio stations across the country. While we know of this particular instance, how many other directives from on high have been sent over not just this issue, but other ones in which Bell sees its interests at stake?

Ultimately, the problem is this: with revenues from wireless, wiredline, Internet, IPTV, cable/satellite services at BCE in 2012 of $17.4 billion, nearly eight times its $2.4 billion in revenues from TV and radio, news is a minor cog in BCE’s corporate machinery. Journalism, in other words, is subservient to the company’s attempts to prop up the value of the ‘transmission’ and technology side of its business.

Perhaps the fact that journalists and the news divisions of such TMI conglomerates will be deployed to protect dominant market positions and capitalization might not be all that surprising, but it should still be concerning to journalists and the rest of us who need them to offer views of the world unvarnished by their corporate overlords. That the execs at BCE and Bell Media news divisions went so cheerily along with Crull’s memo serves neither journalism nor the public well.

  1. September 1, 2013 at 1:31 pm

    Reblogged this on Welcome To The Right Wing Of Chickens and commented:
    Duffy Wallin Kent worked for CTV

  2. Anakin
    August 31, 2013 at 3:23 pm

    Good article Dwayne. The truth is we’re screwed no matter what happens here.

    We’re screwed if Verizon doesn’t come as internet/wireless prices will remain high in Canada. And we’re screwed if Verizon DOES come as they will help lower prices for a short term only (I give it a year). We’ll end up right back where we started, with high prices, I guarantee it.

    It doesn’t matter how you spin it, the ONLY solution to our problem (which has already been proposed by experts in the mid-90s to senators in the Parliament in Ottawa but ignored) is to nationalize the internet. Do this and the incumbents will have no choice but to lower prices. Maybe we should take it a step further and nationalize cell towers?

    An simple solution in just seven words:
    Let them build it – then nationalize it.

  3. Democracy Channel®
    August 28, 2013 at 3:39 pm

    The Canadian Broadcasting Act – Broadcasting Policy for Canada – Declaration

    S. 3(d) the Canadian broadcasting system should
    (i) serve to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada,
    (ii) encourage the development of Canadian expression by providing a wide range of programming that reflects Canadian attitudes, opinions, ideas, values… by offering information and analysis concerning Canada and other countries from a Canadian point of view,

    3(g) the programming originated by broadcasting undertakings should be of high standard;

    3(i) the programming provided by the Canadian broadcasting system should
    (i) be varied and comprehensive, providing a balance of information, enlightenment and entertainment for men, women and children of all ages, interests and tastes,
    (iv) provide a reasonable opportunity for the public to be exposed to the expression of differing views on matters of public concern,

    The public owns the airwaves and unlike newspapers, they are licenced and required to obey the Broadcasting Act, however, with a government and CRTC that are afraid of them, it is unlikely that there will ever again be a prosecution in Canada against one of them for violating the law. After all, the last time the CRTC prosecuted CBC, CTV and Global Television for not providing equitable political coverage the Mulroney government stayed it and a subsequent private prosecution failed. (R.v. Canadian Broadcasting Corporation et al., [1993] 51 C.P.R.(3d), the Ontario Court of Appeal). http://www.crtc.gc.ca/eng/archive/1995/pb95-44.htm

  4. Steve
    August 28, 2013 at 1:26 pm

    FYI: Bell’s response doesn’t deny these emails were sent, but does say that Kevin Crull was not asking for CTV News to cover this study. http://blog.fagstein.com/2013/08/28/bell-ctv-emails/

  5. Ric Lapatate
    August 28, 2013 at 10:43 am

    “Some employees at Rogers and Bell, for instance, report being brow-beaten by managers to email a form letter in support of the companies to the government.”

    This report is completely true, and I refused to send the form letter.

    • Dave
      August 30, 2013 at 11:27 pm

      Here as well…!!! They DID circulate a form letter…someone needs to look into this.

  6. Marc
    August 28, 2013 at 5:08 am

    Let them cry, whine, shout and object – Canadians are not falling Prey to their disengenuine cries of unjust measures.

    I would love to see them waste billions more in their feable measures of trying to sway and seduce the steasfast set minds of most who view these ads as darn right laughable in their desolate mis fired shots in regards to acquiring our care or concern.

    This is by far long overdue and damn right about time that we as CanadiAns get a measure of dignity and a band aid to cover our gashes and wounds from the blood-letting of our hard earned wages!

    I have four months left in my most tenured abusive relation with telus and i count down the days until i can have my shackles removed! Their is a new day dawning on the horizon abd whether it be with a new entrant in the name of Verizon or the devil from hell with a contract arm extended i would most likely sign on the dotted line as the service and accordance to civility couldnt be any worse than what is currently being dished out by the big 3!

    Bullys shoukd

  7. August 27, 2013 at 7:21 pm

    Very nice wrap, Dwayne. You may become the subject of a few executive emails yourself.
    As non-surprises go, I suppose we should have expected no less as we watched the vertical integration of the sector evolve.
    I wonder whether Harper’s position would be different if cellular services prices weren’t so easily leveraged for political purposes. I can already hear the election boasts.

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