Thursday, 3 February 2011

Speaking of Being Screwed through Lack of Competition

For those that still use cable or satellite providers, has anyone taken a hard look at their bills lately?  Can anyone explain why Bell/Rogers/Cogeco et al. are allowed to get away with such high rates?

With Internet traffic, there is a plausible justification for usage based billing (in an ideal none-fucked-up Canadian telecom landscape.)  Data traffic has ebbs and flows and usage varies.  Circuits can get congested, and genuine work has to be done to get traffic to its destination as smoothly as possible.

Not so with broadcast television signals.  When you hook up a cable or satellite system, that system is receiving every single channel that the provider carries on their system.  To create "packages" whereby we have to choose which channels we wish to pay for, the provider has to put in blocks to prevent data from reaching your television.  Heck, right now, as you sit at your computer, every single channel that Bell carries on their satellite network is streaming through your body.  If you were a Borg or a Cylon you would have the inherent technology to receive that signal and watch TV in your brain for free without use of a television.  Of course you'd be too busy trying to destroy humanity, and our only defenses would be the circuit rotting experience of processing Two and a Half men and Life With the Kardashians, but that's another story.

This is the complete opposite of data networking.  Instead of innovating to deliver content, TV re-broadcasting involves innovating to prevent content from being viewed.  It costs no more for Bell to allow me to watch every channel they carry than it does to allow only 10 channels.  It actually costs Bell more money to create, manage and enforce package selection.  Never mind the probably absurdly large sales team devoted to trying to get you to buy ever more services.

These artificially induced costs are then the justification to hike rates.  In effect they are charging us more money to prevent delivery of services.  It is all based on ransom demands.  Quite the racket huh?

What I want to know is, why do we let the government protect this market and prevent open foreign competition?  And that question goes for all telecom services as well.  Why does the government keep the market closed so that these companies can continue to gouge customers at will?

UPDATER: What Pete Nowak said. HT Christopher Parsons

1 comment:

Ken Breadner said...

It's funny, you know. Say "foreign ownership" and the first thing most Canadians will think of is outsourcing. The attitude is that foreign owners don't give a fart in a glove for Canadian workers, and why should they? But the Canadian companies are outsourcing like mad. When those nineteen Bell employees split that lotto jackpot a while ago, I wasn't alone in my shock that Bell *had* 19 Canadian employees.
If you're going to pay everybody crap wages, the least we can have is cheap pricing.