6 ms·

As another canadian, here's something that occurred to me recently: we like to sling around the oligopoly argument when talking about telecoms, but when I bothe

by lhorie 5y ago

As another canadian, here's something that occurred to me recently: we like to sling around the oligopoly argument when talking about telecoms, but when I bothered to look a bit into it, rather than finding some tightly knit mafia-like boys club, what I found is that the landscape is quite fragmented and messy (e.g. look at the scope of Telus' operations in Ontario vs Quebec, or look at how Sasktel operates, or look at companies like Fibrestream) The big telecom lobbying argument vs CRTC about how urban markets need to subsidize rural infrastructure costs is not something 95% of canadians like to hear, but it kinda makes sense (They say rural infra simply isn't cost effective because Canada is so expansive, but you expect high speed Internet access in your Muskoka cottage, right?) Banking is kind of in a similar boat in the sense that it's an industry with economies of scale effect, so naturally there are going to be big players. Even smaller players like Tangerine need to make "big boy" investments like call centers. ICBC is another example of a bank that isn't the big 5 and yet has brick and mortar branches to serve a highly specific niche. OpenBanking doesn't mean that TD et al somehow get to tighten the noose on smaller banks to their own advantage; it's actually on them to implement the APIs. If Tangerine can't keep up with other banks improving their technology, that's their own fault. What the whole thing means is that Plaid doesn't get to have root access to your banking.

munk-a 5y ago
> The big telecom lobbying argument vs CRTC about how urban markets need to subsidize rural infrastructure costs is not something 95% of canadians like to hear, but it kinda makes sense For some groups (especially reservations where their location to practice independent governance is government mandated) I can absolutely sympathize - but for most of the rest of rural Canada - uh why? Urban centers like Toronto and Vancouver are already paying property taxes far exceeding rural areas - with the residents paying those taxes also being hit by bigger income tax proportions due to the higher wages in the cities. There is no allowance for rural Canadians to get subsidized access to live operas and plays - choosing to live in a rural area comes with a general acceptance that those sorts of live performances are always going to be inconvenient and expensive since you'll need to travel to the city to get them. Why are we treating internet significantly different? If you choose to live in the middle of nowhere you can pay the actual cost for a company to maintain a line to your cabin in the woods while enjoying the scenery you're immersed in. On Monday I've got a hookup guy coming to my place to switch our condo over from Telus to Novus - this will drop our price from 100G/$80 to 300G/$50 along with removing data limits and throttling and probably actually getting closer to the advertised rate (we often get about 15-20 down from Telus right now - I've heard much better things about Novus). Part of the reason Novus can do this is indeed the fact that it doesn't offer service outside of very dense urban areas - and I'm personally quite okay with that.
- 908B64B197 5y ago
  > If you choose to live in the middle of nowhere you can pay the actual cost for a company to maintain a line to your cabin in the woods while enjoying the scenery you're immersed in. When competitors are stopped at the border for dubious pretexts it means that the local monopolies can effectively decide not to wire your property. Wouldn't it be nice to see an ultra-competitive European carrier laying fiber out there?
- neom 5y ago
  Because if we didn't since the 90s, the socioeconomics of Canada would have gotten insanely out of whack? Think of it in terms of access to education and information. As someone from the sticks, I can even grok how it would have played out, it would have been a nightmare. The kids from the pulp and paper towns (that I will remind you, very much helped build the Canada you live in today, the woods are nice sure, but the towns are there because of economics Canada is built on, not just because people want nice scenery) would have been drastically disadvantaged comparatively. I understand this is somewhat less true today, but I still think serving the rural infrastructure is disproportionately expensive, and I don't think we should start asking Canadians to move.
- lhorie 5y ago
  I think Novus, Fibrestream and friends are good examples that support the idea that the market is healthy and oligopolies don't have the ability to use their position to choke out smaller players. I'd wager that Canada is still largely a wild west when it comes to physical copper coverage. Meaning big players do project long term profit from rural markets and actively invest in them, but that the projections aren't sustainable below some price threshold, hence butting heads with CRTC to make the math work out. As for the notion that country bumpkins ought to be satisfied with inconvenience, I'm not sure how to respond other than more and more they expect modern things to be available to them. A customer is never in their right mind going to shoulder a 100k upfront cost to lay fiber to a town, so if someone wants to make the cost benefit analysis, it's most likely going to be one of the big players, IMHO
- frosted-flakes 5y ago
  Are you really comparing live operas and plays to Internet access? One is a luxury. The other is a necessary utility (that also facilitates other luxuries, but that's beside the point, because there's a lot of things you need the utility for).
deleted 5y ago
[deleted]
908B64B197 5y ago
> The big telecom lobbying argument vs CRTC about how urban markets need to subsidize rural infrastructure costs is not something 95% of canadians like to hear, but it kinda makes sense (They say rural infra simply isn't cost effective because Canada is so expansive, but you expect high speed Internet access in your Muskoka cottage, right?) That still doesn't explain why internet service is way more expensive in Canada than pretty much everywhere else in the world.
- neom 5y ago
  I don't mean this to be crass, I presume you've never driven across Canada then? I suspect if you had, you'd very soon realize why it's so expensive. 11 people per square mile, the same as Botswana, except at least in Botswana you can just drive in a straight line for hours, and you don't have snow salt and freezing temperatures to contend with. If a team from Rogers in Toronto had to go to Kenora Ontario to service equipment, they'd have to fly to Thunder Bay, and then drive 12 hours, and then get a hotel, ship gear, etc etc, never mind the winters, and the fact that the skill labour in the telco industry only became marginally more abundant in the last 10/15 years.
  - 908B64B197 5y ago
    Except what matters is the density distribution. 85% of Canadians live within 100 miles of the US border, for instance. https://www.vox.com/2016/5/5/11584064/canada-population-map https://www.vox.com/2016/5/5/11584064/canada-population-map
    - neom 5y ago
      Take the population distribution map and throw it on top of the telecommunications coverage map and put it on a 20 year timeline, I suspect you'll have the answer to your question, as I explained, Kenora is not near Toronto, it's many many many many many many many hours of driving away, places that are literally physically difficult to get to.
  - lhorie 5y ago
    Kenora is a two hours drive from Winnipeg, it's not nearly as inaccessible as you're making it out to be. However, with that said, I saw numbers saying that laying one mile of fiber costs to the tune of $30k, so just connecting Winnipeg to Kenora would cost some $4M. Kenora itself has an area of 80 sq mi and a population of 15k people (though mostly concentrated near Lake of Woods). It's not nothing, but also not exactly a gold mine for telecoms, to be sure. Timmins might be a better example. It's more than 400 miles north of Toronto, and has some 40k people. Sudbury is half way there and has some 160k people, but still some 250 miles away from Toronto. To give a sense of scale, the distance from Timmins to Toronto is bigger than the distance from Amsterdam (Netherlands) to Berlin (Germany). 200k potential customers is a pretty decent size market (that's a quarter of San Francisco's population, for example), but covering 400 miles w/ fiber at $30k/mile just to reach it comes out to a cool $12M upfront investment. Don't forget this is just to connect two points, there's still last mile coverage and ongoing maintenance which is going to add quite a bit of cost on top. If a single competitor is there, that can cut into the profits pretty deeply. That's the sort of math that telecoms need to deal with when doing ROI analyses on these markets.
grouseway 5y ago
I feel like the rural coverage issue is misleading and overused. Look at their coverage maps: https://www.rogers.com/mobility/network-coverage-map?icid=R_WIR_NTW_HEUQFZ https://www.rogers.com/mobility/network-coverage-map?icid=R_... Most of my province (BC) is not covered. They cover the urban areas and some wider areas along highways in plateau regions. Where is this burdensome coverage that is keeping them expensive?
- neom 5y ago
  It's not your province that's the problem, it's Ontario, Manitoba, and Quebec mostly keeping your internet and phone expensive. I don't think people in those provinces are oblivious to that either, and I'm sure they thank you for being a good Canadian, we are after all a country, not say, a collection of states that are "united".

by lhorie 5y ago

munk-a 5y ago

> The big telecom lobbying argument vs CRTC about how urban markets need to subsidize rural infrastructure costs is not something 95% of canadians like to hear, but it kinda makes sense For some groups (especially reservations where their location to practice independent governance is government mandated) I can absolutely sympathize - but for most of the rest of rural Canada - uh why? Urban centers like Toronto and Vancouver are already paying property taxes far exceeding rural areas - with the residents paying those taxes also being hit by bigger income tax proportions due to the higher wages in the cities. There is no allowance for rural Canadians to get subsidized access to live operas and plays - choosing to live in a rural area comes with a general acceptance that those sorts of live performances are always going to be inconvenient and expensive since you'll need to travel to the city to get them. Why are we treating internet significantly different? If you choose to live in the middle of nowhere you can pay the actual cost for a company to maintain a line to your cabin in the woods while enjoying the scenery you're immersed in. On Monday I've got a hookup guy coming to my place to switch our condo over from Telus to Novus - this will drop our price from 100G/$80 to 300G/$50 along with removing data limits and throttling and probably actually getting closer to the advertised rate (we often get about 15-20 down from Telus right now - I've heard much better things about Novus). Part of the reason Novus can do this is indeed the fact that it doesn't offer service outside of very dense urban areas - and I'm personally quite okay with that.

908B64B197 5y ago
> If you choose to live in the middle of nowhere you can pay the actual cost for a company to maintain a line to your cabin in the woods while enjoying the scenery you're immersed in. When competitors are stopped at the border for dubious pretexts it means that the local monopolies can effectively decide not to wire your property. Wouldn't it be nice to see an ultra-competitive European carrier laying fiber out there?
neom 5y ago
Because if we didn't since the 90s, the socioeconomics of Canada would have gotten insanely out of whack? Think of it in terms of access to education and information. As someone from the sticks, I can even grok how it would have played out, it would have been a nightmare. The kids from the pulp and paper towns (that I will remind you, very much helped build the Canada you live in today, the woods are nice sure, but the towns are there because of economics Canada is built on, not just because people want nice scenery) would have been drastically disadvantaged comparatively. I understand this is somewhat less true today, but I still think serving the rural infrastructure is disproportionately expensive, and I don't think we should start asking Canadians to move.
lhorie 5y ago
I think Novus, Fibrestream and friends are good examples that support the idea that the market is healthy and oligopolies don't have the ability to use their position to choke out smaller players. I'd wager that Canada is still largely a wild west when it comes to physical copper coverage. Meaning big players do project long term profit from rural markets and actively invest in them, but that the projections aren't sustainable below some price threshold, hence butting heads with CRTC to make the math work out. As for the notion that country bumpkins ought to be satisfied with inconvenience, I'm not sure how to respond other than more and more they expect modern things to be available to them. A customer is never in their right mind going to shoulder a 100k upfront cost to lay fiber to a town, so if someone wants to make the cost benefit analysis, it's most likely going to be one of the big players, IMHO
frosted-flakes 5y ago
Are you really comparing live operas and plays to Internet access? One is a luxury. The other is a necessary utility (that also facilitates other luxuries, but that's beside the point, because there's a lot of things you need the utility for).

deleted 5y ago

[deleted]

908B64B197 5y ago

> The big telecom lobbying argument vs CRTC about how urban markets need to subsidize rural infrastructure costs is not something 95% of canadians like to hear, but it kinda makes sense (They say rural infra simply isn't cost effective because Canada is so expansive, but you expect high speed Internet access in your Muskoka cottage, right?) That still doesn't explain why internet service is way more expensive in Canada than pretty much everywhere else in the world.

neom 5y ago
I don't mean this to be crass, I presume you've never driven across Canada then? I suspect if you had, you'd very soon realize why it's so expensive. 11 people per square mile, the same as Botswana, except at least in Botswana you can just drive in a straight line for hours, and you don't have snow salt and freezing temperatures to contend with. If a team from Rogers in Toronto had to go to Kenora Ontario to service equipment, they'd have to fly to Thunder Bay, and then drive 12 hours, and then get a hotel, ship gear, etc etc, never mind the winters, and the fact that the skill labour in the telco industry only became marginally more abundant in the last 10/15 years.
- 908B64B197 5y ago
  Except what matters is the density distribution. 85% of Canadians live within 100 miles of the US border, for instance. https://www.vox.com/2016/5/5/11584064/canada-population-map https://www.vox.com/2016/5/5/11584064/canada-population-map
  - neom 5y ago
    Take the population distribution map and throw it on top of the telecommunications coverage map and put it on a 20 year timeline, I suspect you'll have the answer to your question, as I explained, Kenora is not near Toronto, it's many many many many many many many hours of driving away, places that are literally physically difficult to get to.
- lhorie 5y ago
  Kenora is a two hours drive from Winnipeg, it's not nearly as inaccessible as you're making it out to be. However, with that said, I saw numbers saying that laying one mile of fiber costs to the tune of $30k, so just connecting Winnipeg to Kenora would cost some $4M. Kenora itself has an area of 80 sq mi and a population of 15k people (though mostly concentrated near Lake of Woods). It's not nothing, but also not exactly a gold mine for telecoms, to be sure. Timmins might be a better example. It's more than 400 miles north of Toronto, and has some 40k people. Sudbury is half way there and has some 160k people, but still some 250 miles away from Toronto. To give a sense of scale, the distance from Timmins to Toronto is bigger than the distance from Amsterdam (Netherlands) to Berlin (Germany). 200k potential customers is a pretty decent size market (that's a quarter of San Francisco's population, for example), but covering 400 miles w/ fiber at $30k/mile just to reach it comes out to a cool $12M upfront investment. Don't forget this is just to connect two points, there's still last mile coverage and ongoing maintenance which is going to add quite a bit of cost on top. If a single competitor is there, that can cut into the profits pretty deeply. That's the sort of math that telecoms need to deal with when doing ROI analyses on these markets.

grouseway 5y ago

I feel like the rural coverage issue is misleading and overused. Look at their coverage maps: https://www.rogers.com/mobility/network-coverage-map?icid=R_WIR_NTW_HEUQFZ https://www.rogers.com/mobility/network-coverage-map?icid=R_... Most of my province (BC) is not covered. They cover the urban areas and some wider areas along highways in plateau regions. Where is this burdensome coverage that is keeping them expensive?

neom 5y ago
It's not your province that's the problem, it's Ontario, Manitoba, and Quebec mostly keeping your internet and phone expensive. I don't think people in those provinces are oblivious to that either, and I'm sure they thank you for being a good Canadian, we are after all a country, not say, a collection of states that are "united".