Tuesday, December 6, 2016

All Hail the CRTC!

Canadians pay through the nose for the internets.

Our cell phones aren't cheap, either.

This is, of course, the government's fault. The CRTC regulator is to blame, but so is legislation that favours Canadian companies at the expense of American companies.

Putting Canadians out of work, really. Depriving them of entrepreneurial status.

Who knows what innovations a Canadian could create when he or she has access to American markets.

Canada's Telecom cartel and the CRTC are destroying wealth before it's even created.

And it's about to get worse.

First, the CRTC wants to establish a wholesale price for interest usage. That's right, a final rate on what Bell, Rogers, Telus, SaskTel, Shaw, Cogeco, MTS and Videotron can charge.

This centrally-planned rate also determines what the Telecom giants charge smaller companies on their physical networks.

Wouldn't it be great if American companies could come up here and build new internet infrastructure?

Wouldn't it be great if governments and banks everywhere stopped debasing the national monies?

Slow and steady inflation to induce economic growth is about as backwards as having the CRTC set wholesale internet prices.

Until Canadians embrace laissez-faire capitalism, the deterioration will continue. Phone and internet bills will rise steadily.

The CRTC says it must set prices to help foster competition. Their reasoning is invalid. They focus on the apparent benefits while ignoring the unseen consequences.

Opposition to the scheme focuses on the effect lower fees might hold. They fear lack of investment into the broadband network.

What about the malinvestment orchestrated by the CRTC?

The solution is simple: decommission the CRTC and open the market to international commerce. Canada's protectionist telecommunications industry is a global eyesore.

And it hurts consumers.

But never fear! The CRTC is here.

They've been investigating monopolistic practices of the Telecom cartel. Consumers were complaining about overcharging on data plans.

Consumers accused Telecom of acting as "gatekeepers" while Telecom said something along the lines of, "hey, we're a business, we're only in it for the money."

Of course, the problem is lack of competition. The market-clearing price for mobile data plans is higher than otherwise would be.

Telecom pockets more consumer funds because they enjoy a nice little made-in-Canada cartel.

And, lo and behold, even a consumer advocacy group swings to the left. Meanwhile, a CRTC tribunal of bureaucrats will decide on "differential pricing" instead of permitting the market to work.

But how could the market work?

The CRTC imposes codes regulating everything from conduct to contract lengths, unlocking phone fees, wireless data limits, and cancellation fees. And that's just scratching the surface.

It's as if the CRTC is unaware of the difference between commercial contracts and consumer contracts.

Commercial contracts "are usually between corporate entities with specialized knowledge of industrial practices and a financial interest in minimizing the interruption of business."

Consumer contracts "are those in which one or both parties lack commercial sophistication and large sums do not rest upon a speedy resolution of any dispute that might arise."

Instead of having a uniform body of contract law, perhaps we could have a free market for legal services. 

Perhaps we could also have a free market in telecommunications.

1 comment:

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