Crossing the Line

Link to my submission in PDF form at bottom.

Bell just announced that they’ve signed up their millionth customer for mobile TV. Subscribers can download an app, and get up up to 10 hours “on-the-go access to more than 40 channels of live and on-demand sports, news, entertainment and children’s TV programming.” Sound pretty good? But wait, theres more! (There’s always more.)

Watching mobile TV doesn’t count against your data cap, and best of all, it’s only $5 a month. What’s not to love?

Unfortunately, some things are just too good to be true, and mobile TV is one of them. You see, 10 hours of mobile TV is pretty much the same thing as 10 hours of Netflix: data, about 5 gigabytes worth. And Netflix, as you probably know, counts against your data cap.

To figure out exactly what’s going on, I compared the price Bell charges for 5 gigabytes of mobile TV data to the least expensive data-only plan that lets you watch 5GB of Netflix without going over your cap (it’s called the “Tablet Flex” plan).

It turns out that Bell charges you $5 a month to watch 5GB worth of their own content. If you want to watch 5GB worth of Netflix on the Bell network, on the other hand, they charge you $40. That’s a markup of 800%.

It’s a good thing I attended the International Institute of Communications Canada Conference in Ottawa this week. I had an awesome time. For a wonk like me, seeing industry execs, Industry Canada and CRTC employees, communications scholars and politicians all under one roof must have been what it’s like when an aspiring actor steps off the bus in Hollywood for the first time.

I got to hear the former advisor to Industry Minister Maxime Bernier say things like “cell phones are like shoes, so regulation is really just socialism run wild” and “we wanted to abolish the CRTC 10 years ago” (The same CRTC that’s bringing us the consumer-friendly Wireless Code). I got to hear Jeffrey Church from the University of Calgary talk about how we should just keep using trickle down economics, because we’ve already got too much competition in the Canadian wireless market.

I also got to hear Dwayne Winseck talking about how Free mobile has virtually wiped out contracts in France and how T-Mobile’s gotten rid of data roaming in the States. He was wondering why we haven’t got any of that pretty awesome new stuff here in Canada. I think that part made some people nervous.

(CPAC was filming it, so I’m hoping it’ll be available to watch online some time soon)

Out in the hallways, I was like a kid in a candy shop. A convention centre full of intelligent people from business, Industry Canada, the CRTC and Canadian universities, and they were all talkin’ telecom!?

Naturally, I wanted to find out what people thought about Bell and Mobile TV, so I told a few people what I’d found. People were surprised. Some even expressed shock. So I decided that I should do something about it. But just to be clear, I had to define the underlying problem.

All signs point to one thing: Bell can charge so much because for Netflix and so little for Bell Mobile TV because they’re allowed to cap the data you get with your wireless plan.

Virtually everyone I meet has got something bad to say about the caps. Everyone knows that they’re make-believe, that “bandwidth hogs” and “network congestion” are just boogeymen conjured up to scare the regulator into letting the wireless companies charge whatever they want. We all know that a megabyte doesn’t cost Bell anywhere near as much as they charge, even if we don’t always know what a megabyte is. But we also know that a collection agency will start calling at all hours of the night after a missed bill, so we grit our teeth and pony up.

I’ve been studying smartphones and data caps for about 4 years now. I’m not a seasoned expert, but I know a thing or two about the history, about the politics, and about the economics of communications in Canada. And since I’m a student studying communications, I kind of feel like it’s my job to share what I’m learning. Scratch that. When what I’m learning is that Bell’s charging 8 times as much for its competitors’ goods, it practically becomes my duty to spread the word.

If you walked into the supermarket and found out that your favourite cereal was out of reach up on the top shelf, and that it was there because all the store’s house brand boxes were taking up the lower shelves, what would you do? Call the manager? Leave? Give up and buy some Rice Crunchies instead?

Too bad things aren’t that simple in telecom.

I’ve been writing blog posts for a while now, and this summer I stepped it up and wrote a letter to Bell’s CEO, George Cope. It was pretty popular, but apparently they aren’t getting the message. So this time, I decided to write to someone who might do something about it. This time I wrote a letter to the CRTC.

Took me about a month, and I didn’t get a lot of sleep. But the thing about this piece is that it’s not a regular letter. It’s a “Part 1 application,” a formal request to the CRTC asking them to make sure Bell plays fair. I’m really hoping they’ll listen.

The thing is, Bell could be doing even better without the markup. Lower prices would mean more people will sign up. And trust me, there are plenty of people in Canada who want to subscribe but can’t afford a data plan. And with so many things moving online these days, you can’t really afford not to have one either.

Instead of only offering mobile TV to their own wireless customers, why doesn’t Bell offer it to everyone, like Netflix does? Canadian content is good enough that people elsewhere in the world would surely pay 5 bucks a month to watch it. Bell’s market could expand significantly – and we know they can compete with the best of ’em.

The great thing about wireless services is that there’s plenty to go around. Once you set up a tower, all you have to do is recover your building costs and then everything else is going into people’s pockets. Not just execs either – builders, engineers, salespeople, and yes, shareholders too. It’s good for everyone. But it starts with the customer. Charge a fair price, provide a good service, and collect the reward. Almost sounds…reasonable, right?

I think Bell can do better, and in my letter I outline some ideas about how. Check it out:

Ben Klass Part 1 Application requesting fair treatment of Internet services by Bell Mobility