MLSE: Bell and Rogers have too much power

By ELLEN ROSEMAN*

EVERY DAY, I hear from Rogers and Bell customers about overcharging, recurring bill errors and unfair contract terms.

Most people tell me how hard it is to reach these companies, to get through to anyone who listens and can resolve problems quickly.

So, I trembled to hear that Rogers and Bell bought a majority stake in Maple Leaf Sports and Entertainment from the Ontario Teachers’ Pension Plan.

“Rogers and Bell will be much better owners. Look at how well they treat their customers in their current monopoly,” said a Twitter message I saw (and retweeted) just before the official announcement.

Where does each company find an extra $533 million to get a stranglehold on sports broadcasting in Toronto?

It’s coming from all of us — the long suffering customers who pay too much for home phone, wireless phone, TV and Internet services from these two giant telecom firms.

We pay too much because of a misguided federal government policy that has allowed Bell and Rogers to dominate and control the telecom markets in eastern Canada.

In the past 20 years, Ottawa has stripped away much of the regulation that once applied to home phone service and cable TV. Meanwhile, it has refused to regulate Internet and wireless phone service.

Competition is seen as the panacea. Consumers will enjoy lower prices and snappy service once companies can outbid each other for an expanded market share.

Sounds good in theory, which explains why the federal industry minister always talks about competition when asked to justify the latest outrage perpetrated on consumers.

Who can forget Tony Clement, now promoted to Treasury Board president, when he tried to defend Bell’s policy of making Internet wholesalers adopt its usage-based billing practices?

Only when consumer groups staged a large-scale protest did the government back down.

The incumbent firms — Rogers and Bell (and Telus in western Canada) — have used their pricing power and easy access to capital to dictate the rules for their unregulated businesses.

Wireless phone service is the cash cow for these companies. It’s the arena where the battle for market share is being waged.

Rogers and Bell bludgeon customers into accepting a flurry of extra charges for wireless phones. They hit them with unexpected bills for data roaming and third-party text messages.

In 2010, the government moved to open wireless spectrum to new entries (Wind, Mobilicity and Public). Change is moving slowly.

Many customers stay with the established firms and their discount brands (Virgin, Solo, Fido and ChatR) because they like the wider phone selection and cross-country networks that smaller firms lack.

Upstarts need financial heft to compete, but they’re hampered by restrictions on foreign investment. Wind Mobile was almost knocked out of play because of its Egyptian backing.

Some customers lock themselves into long-term deals to get a price break. Bundle discounts are an effective weapon.

In advance of new wireless competition, Bell and Rogers ran campaigns to push discounted deals, hoping to thwart the new entries before they began.

Talk about unfairness. Some people now say the deals they were offered never showed up on their bills. They had verbal contracts only and nothing in writing to prove their claims.

Bell and Rogers also raised some prices while the discounts were in effect. Here are examples.

Robin Kelm called Bell to cancel last June, but agreed to stay when his home phone cost was reduced by $5 a month. Six months later, he’s facing an increase in January.

“When I asked why, they said I’m still getting a discount, but they’re just raising the base price,” he says. “Is it just me or is that misleading?”

Kevin Yong-Ping asked if he could break his contract without penalty after Bell Mobility announced a text message fee increase next February.

“Text messaging is often not part of the contract,” replied Howard Maker, head of the Commissioner for Complaints for Telecommunication Services, when asked about the increase.

If text messaging were provided as an add-on feature, then raising rates “wouldn’t constitute a change to your contract,” Maker said.

Several provinces have stepped into the gap. Quebec passed a law in 2010, limiting the right of telecom firms to change contract terms unilaterally. Manitoba passed a law (not yet in effect) and Ontario’s bill went through second reading this month.

Telecommunications is a federal responsibility, so the industry may try to strike down provincial laws on constitutional grounds — especially if another big province follows suit.

In case you didn’t get my drift, I think the MLSE deal is wrong.

Bell and Rogers have too much power. They use it to disable smaller rivals and stifle competition.

Customers are furious about perceived abuses. The federal complaint agency handled 8,007 complaints in its recent year, up from 3,747 a year earlier.

Now they want to join forces to monopolize sports broadcasting, using our inflated bills to fuel their buying spree. They should be stopped.

*Ellen Roseman is a Personal Finance Columnist with the Toronto Star

Source: http://www.thestar.com/article/1099845–roseman-this-duo-has-too-much-power-already