Canadians know all about the consequences of having the just a few companies dominate the telecommunications marketplace. Limiting the options when it comes to who can provide national services and who can’t limits competition and innovation and leads to price gouging and unfair business practices.
As of last week, it looks like our friends south of the border are heading down the same path.
The New York Time’s Nobel Prize winning economics columnist, Paul Krugman wrote a scathing take-down on a proposed merger in the U.S. that would make Comcast, already the biggest telecommunications company in that country even larger with its proposed acquisition of Time Warner Cable.
Here’s the key points:
Last week’s big business news was the announcement that Comcast, a gigantic provider of cable TV and high-speed Internet service, has reached a deal to acquire Time Warner Cable, which is merely huge. If regulators approve the deal, Comcast will be an overwhelmingly dominant player in the business, with around 30 million subscribers.
So let me ask two questions about the proposed deal. First, why would we even think about letting it go through? Second, when and why did we stop worrying about monopoly power?
On the first question, broadband Internet and cable TV are already highly concentrated industries, with a handful of corporations accounting for most of the customers. Once upon a time antitrust authorities, looking at this situation, would probably have been trying to cut Comcast down to size. Letting it expand would have been unthinkable.
Interestingly, one cliché seems to be missing from the boilerplate arguments being deployed on behalf of this deal: I haven’t seen anyone arguing that the deal would promote innovation. Maybe that’s because anyone trying to make that argument would be met with snorts of derision. In fact, a number of experts — like Susan Crawford of Benjamin N. Cardozo School of Law, whose recent book “Captive Audience” bears directly on this case — have argued that the power of giant telecommunication companies has stifled innovation, putting the United States increasingly behind other advanced countries.
Except for Canada of course. We are the poster child for how not to run a telecom industry. Due the concentration of customers in three mega-companies, practically every Canadian has a Big Telco story about how they were ripped off, and due to the restrictions in the marketplace, they have few places to turn.
Worldline is one of the few competitors out there who are throwing a wrench into the gears of Big Telco, forcing them to reign in their price gouging and unfair contracts. Yet, too few Canadians know that, a), they have an option in a service like ours, or b) too few have geographical issues that leaves them with only one provider.
The only way to beat these guys is first, government action to take the shackles off and let competition truly thrive. However, until that happens, what will really be a game changes is for more Canadians to simply just say “no” to Big Telco and take their business elsewhere.
Oh, by the way, our number is 1(855) 299-0025.