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CanadianRip
join:2009-07-15
Oakville, ON

CanadianRip

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Canadian Telecom: Obvious Collusion, Purchasing Maple Leafs

First we had a major agreement for Bell and Telus to share its tower infrastructure. This in itself certainly raised my eyebrow considering at the time the market consisted of only three players.

Considering that Bell was more focused on the East, and Telus was more focused on the west, and Bell the east it really didn't seems like they competed much outside of wireless. It was fairly obvious by the pricing that there was market collusion going on there.

Now Bell & Rogers purchase the Maple Leafs franchise together, proclaiming their BFF status? If this does not earmark an ongoing mutually beneficial relationship between the two companies, I'm not sure what would.

This half measures that are being taken by the CRTC to increase wire-line Internet competition are simply not enough. If this latest news does not show how unaffected the two companies are. If their profit statements do not indicate something is very wrong with competition, then what does.

Why are these companies NOT being bench marked in profits versus regions countries who have a vibrant level of competition. We spend millions of dollars to figure out Ontarian's are paying too much for booze at the LCBO; which required no study. However Industry Canada can't somehow scrounge up a enough muster or budget to really tackle the problem of INTERNET INFRASTRUCTURE?

[Begin Rant]
Okay anything meaningful pretty much stops here, and I'm going to walk off into personal rant territory now.

Honestly these half hearted attempts at dealing with something so vital to our future economic, and social growth is disturbing to me. It just highlights a government that has lost all touch with the future of Canadians.

Not to pick on the cons, because I feel all parties have lost touch of what it takes to be a great leader. Vision - something that seems to have left us in the 80's. Today we react to problems, only when a fire exists. The entire generation of leaders worldwide look to and care about the future as far as their next paycheck. We've created a society of instant gratification, which stems from the bottom to the top. We use credit to buy it now, and we don't want to commit to any large projects where the results will be achieved in more than a 2-3 years. Everything we do, we do through the lens of short sightedness.

We're in trouble a society, and if the economic collapse that's about to bestow the world is perhaps the greatest culmination of trillions of dollars piled upon trillions more of short sightedness.
[End Rant]

Hmmm okay so the whole post was a rant, but someone had to.

Shrug
@videotron.ca

Shrug

Anon

In Quebec, Maple Leaf is a company that makes baloney that kills people.

BGB
Wants moar interwebz
Premium Member
join:2009-07-09
Waterloo, ON

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Expect bills to rise yet again to cover the cost of this..

They should take the money they are throwing away on this and fix/upgrade the infrastructure.

plus if this is not a sign that the companies are in bed together i don't know what is
freejazz_RdJ
join:2009-03-10

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I'm largely supportive of the rant portion of your post. We are too short sighted when it comes to making investments that will make us a more efficient society.

But the tower sharing deal isn't collusion. Both players needed to make a big change in their networks to keep up with Rogers and the potential new entrants. And so in order to build an entirely new network from the ground up in around 1 year, they agreed that a sharing structure is what worked best: You build half, I build half. Well not quite half, since Sasktel built their part themselves and share it with both Bell and Telus. Perhaps if the indie players (both ISPs and Wind/Mobilicity) were able to make such a deal they could pay less money to incumbents each month in leasing large capacity circuits. They pay tens of thousands each month to lease short haul circuits between common buildings, but none have come up with group build.

As for the MLSE deal, someone was going to buy them. Clearly both Bell and Rogers had an interest: on its own, MLSE makes money. Add in the broadcast content and you're golden! But they have to share: Broadcast rights for games are auctioned by the NHL, not MLSE. So no issues with the broadcast rights. And for Mobile content, they must also share after the CRTC vertical integration decision. So they can't lock other players out of nearly all the MLSE content, just like Bell can't lock people out of Habs content anymore (they own 20% I think).

CanadianRip
join:2009-07-15
Oakville, ON

CanadianRip

Member

said by freejazz_RdJ:

But the tower sharing deal isn't collusion. Both players needed to make a big change in their networks to keep up with Rogers and the potential new entrants.

I'm not going to disagree with you there. However if think about what makes a healthy competitive environment.

Could you imagine WalMart sharing retail floor space with Loblaws? Absolutely not; in fact you see quite the opposite of WalMart going out and buying all the land around their store so they can control who pops up around them as much as a possible.

Why? Because this is how competition works. Could you see WalMart and Loblaws holding hands together and saying, hey lets buy the Leafs together?

No, in fact if they two sets of executives ever walked into a room together sure they would be civil. However their entire agenda would be to tease business strategy out of each other, only so that once they walk out of the room they can figure out how to stab the other in the back.

Why? Because ANYONE of the numerous competitors out there would have an easy time pushing both incumbents well out of the way if they ever got fat and lazy.

Now with our OmniCom (TM) industry (my term: royalties required for reuse); we have quite a different scenarios. We have content meetings to figure out how everyone can hold hands make more money. Make more money at the expense of whom? Why the public of course.

Yes I see where this is a unique industry is so much as the infrastructure takes large investments. Which is why we need to stop looking at this industry as a private infrastructure manipulated by private industry.

Imagine what the trucking industry would be like if three different Cartage companies owned all the roads. They would create situations where the transport of goods would become so expensive, life as we know it today would not exist. They would be the same Robber Barron's that we see in Telus/Bell/Rogers.

This is exactly why the highways are a public good. I really think the long term game here needs to be to take the infrastructure portion of the network, and create an industry organization that has shared access to ALL infrastructure. Anyone that joins the membership can pay per use, and everyone gets the same pricing options.

Each paying member can then also vote/nominate board members that will oversee infrastructural improvements and maintenance.
MaynardKrebs
We did it. We heaved Steve. Yipee.
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join:2009-06-17

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Ok, there is abusive concentration going on.

But really......why get worked up over the Toronto Maple Oafs....the gang that can't shoot a puck straight? Or the Raptors - a bunch of semi-literate street kids who wear baggy pants?

Last I heard, viewing or attending 'professional' sports business entertainment events was entirely optional on the part of consumers.

But if you prefer that sort of thing at least have the common decency to chant the appropriate universal team slogan, "Our millionaires are better than your millionaires!". It helps keep your perspective on the whole matter.
booj
join:2011-02-07
Richmond, ON

booj

Member

Because it is a step backwards trying to break the telecom collusion that exists now.

Sports packages are what keeps many consumers tied to their cable/satellite TVs. Almost all other content can be found over the internet.

Now we have the same two companies owning the team, the two sports networks that show the games, and the two infrastructures the games are distributed with. There is no competition.

Shrug
@videotron.ca

Shrug

Anon

Bell = Montreal Bell Centre
Bell+Rogers = Toronto
Videotron had special laws passed in QC to build a new forum in Quebec city with them as the owner.

Collusion? Government interference? Telco Mafia reaching into the depths of government in order to capture a market?

BhellMustDie
@comcast.net

BhellMustDie

Anon

Great. Now we have arrogant Bhell and Robbers controlling the product to delivery and I'll pay a dollar a minute to watch the maple laughs on my crackberry.

Thief
@comcast.net

Thief to booj

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to booj
Guess it's time to steal signal from my neighbor.
YogiB
join:2010-08-18
Montreal, QC

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said by Shrug :

Videotron had special laws passed in QC to build a new forum in Quebec city with them as the owner.

Well, Quebecor to be precise. Videotron is just 'one of their little projects'. If it was just Videotron trying to push, we wouldn't have any problem. But because Quebecor owns roughly 80% of the media (tv, radio, internet, newspapers, books), we have a problem.
old sparks
join:2011-02-17
Greely, ON

1 recommendation

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Saw in the cbc comments section:

Now Leaf players will be 30% slower than advertised and the team will hit its salary cap two weeks into the season...
MaynardKrebs
We did it. We heaved Steve. Yipee.
Premium Member
join:2009-06-17

MaynardKrebs

Premium Member

LOL
freejazz_RdJ
join:2009-03-10

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said by CanadianRip:

I really think the long term game here needs to be to take the infrastructure portion of the network, and create an industry organization that has shared access to ALL infrastructure. Anyone that joins the membership can pay per use, and everyone gets the same pricing options.

As long as they are all willing to contribute equally in terms of equity and have control relative to the equity they invest, this isn't problematic in theory. Although with fragmented ownership, there will be problems with consensus on what to build, when, where, etc. But to allow someone to reap the benefits without investing any capital is ridiculous and will undermine all future investment.

The bigger issue with having a single supplier for infrastructure is that you limit yourself to one type of competition with one type of efficiency: static efficiency. All your consumer gains come from constraint on the markup because you have a monopoly supply on the infrastructure. Long haul connectivity costs didn't come down because of regulated margins, they came down because competitors to the large telcos built competitive facilities at a lower cost than the telco could and operates them at a lower cost.

You should pay close attention to the screams coming from competitors, mainly indie suppliers, in Australia now that there will be a monopoly there. The cost is even higher per Mbps than Bell charges in the new GAS tariff and you've got to build your own capacity to 121 different POI's. Not the dreamscape people here picture when they think of a single infrastructure co. owned by the public.

BhellMustDie
@comcast.net

BhellMustDie to MaynardKrebs

Anon

to MaynardKrebs
Ottawa sucks more.

asdasdsa
@rogers.com

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Bell and Rogers will be on a short leash here I think. If it gets approved by the government and the NHL you can bet Canadians will be a hell of a lot more angry about them screwing with the Leafs than their internet.
monsoon66
join:2007-01-13
Toronto, ON

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This whole deal stinks. As much as I hate it being a Raptors fan, I hate it even more knowing that the two big dummies are in cahoots with each other.

The first thing that popped into my head when I heard the story was how could two supposed rivals get into a business deal like this together? I don't think there needs to be anymore evidence to show that these two have been colluding for years.

From their press conference they both sounded like they were more interested in the actual broadcasts than they were with the teams. The whole thing stinks and I hate it.
jp_zer0
join:2009-07-27
Gatineau, QC

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I don't get the point . Any visibility from this also goes to your competitor...

Why doesn't bell buy the Ottawa Senators? If my theory is wrong that investing together with a competitor isn't a good idea... then at lest we get some sweet irony.
bt
join:2009-02-26
canada

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said by asdasdsa :

Bell and Rogers will be on a short leash here I think. If it gets approved by the government and the NHL you can bet Canadians will be a hell of a lot more angry about them screwing with the Leafs than their internet.

Don't think the Government has any say in this sale what so ever, just the NHL.
InvalidError
join:2008-02-03

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said by freejazz_RdJ:

You should pay close attention to the screams coming from competitors, mainly indie suppliers, in Australia now that there will be a monopoly there. The cost is even higher per Mbps than Bell charges in the new GAS tariff and you've got to build your own capacity to 121 different POI's.

If you build to NGNCo's POIs, you don't need to buy NGNCo's expensive long-haul transit, only the NNI fees.

IIRC, NGNCo's long-haul rates were under $8k/Gbps for type-1 (background/bulk priority) traffic and their type-2 traffic is "only" $20k/Gbps which is actually $2310/Gbps cheaper than Bell.

CanadianRip
join:2009-07-15
Oakville, ON

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said by freejazz_RdJ:

You should pay close attention to the screams coming from competitors, mainly indie suppliers, in Australia now that there will be a monopoly there. The cost is even higher per Mbps than Bell charges in the new GAS tariff and you've got to build your own capacity to 121 different POI's. Not the dreamscape people here picture when they think of a single infrastructure co. owned by the public.

There's nothing stopping Rogers from continuing their ownership of the cable network infrastructure. I just think we need one communal good, and it probably should be fibre.

Before someone pipes in with "FIBRE COSTS WAY TOO MUCH". Still cheaper than roads, and in this day in age they're probably just as important as roads.
jfmezei
Premium Member
join:2007-01-03
Pointe-Claire, QC

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Guys, I think you are making too much of this.

In fact, this could be more competitive since during Leafs games, you'll see both Bell and Rogers adverts.

Large corpporations are very used to fighting in the arena during the day, the having dinner together afterwards.

So I see nothing wrong with BCE and Rogers each having an equal (is it equal ?) stake in some hockey team. This is just some ego stroking at the CEO level and really doesn't affect how each company's marketing department tries to match price increases made by the other.

Banks are similar. They work together on many fronts (bank security, banking laws, and credit card processing (Moneris as example), but still compete to get the big deals (above 1 million) and still equal each other in their efforts to screw ordinary canadians.

neuromancer1
join:2007-01-22
York, ON

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Another reason to hate the Leafs and boycott there games etc... None my money is going to Bhell ever again.

CanadianRip
join:2009-07-15
Oakville, ON

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said by jfmezei:

Large corpporations are very used to fighting in the arena during the day, the having dinner together afterwards.

I don't think this is at all correct when perfect competition exists. I'd love to see an example of this in a market that is not broken with limited incumbents.

To me this is very open, very evident collusion.

If you take the example of banks, here where they're very regulated you can hardly call it a market with perfect competition. While the financial barriers to entry are more limited due to regulation rather than financial investment to open.

If you look at the banking example in the US, the very ATM networks you speak of took almost a decade to form because the competition was so fierce and everyone was trying to get an edge over their competitors.

I've done a lot of consulting work for many Fortune 500 companies. I can tell you this type of thing only happens when there's an environment of collusion in the first place. As I stated before, you will never ever see this type of thing happening between WalMart and Loblaws - not even close.

hm
@videotron.ca

hm

Anon

I'm not sure if I would call it collusion. However, hockey, that is hockey in Toronto, Montreal and Quebec city, are monopolized.
jfmezei
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Loblaws and Wallmart would work together if the government were to want to pass law/regulations that would hurt both of them. In fact, they probably have some sort of association that represents their interests to government (some would call it a lobby group).

Consider Bell an Telus. They share antennas, but compete fiercly for business services.

There is no loyalty involved. They cooperate in a very selffish way (when it benefits them).

Banks will work with the Canadian Payments Association to ensure that cheques get processed in a standard, trustable and efficient way. Same with the Interact association. But a bank that learns that some financial istrument isn't worth what it says it is worth will glandly sell it to a competitor at full value and not reveal any info about it being not so great. It wants to get rid of that instrument while it still appears to have full value and let some other bank absorb the loss.

In the case of Interac, CPA, CBA, there are many committees where all major banks participate which have regular meetings to discuss operations for those systems, plan new features etc.

In the early days of ATM Interac, banks did not trust each other so they would refuse to send your bank balance information when you used another bank's ATM (since that bank would then know the average balance for customers at the other banks).

But they eventually worked this out and agreed to include balance info when doing interac based ATM transactions.
cog_biz_user
i ruin threads apparently
join:2011-04-19

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i'm kindof miffed about this whole thing too... what right does rogers and bell have running a hockey team?

i've always ranted that telecom in canada is mis-managed, but this just takes the cake.

there should be no reason for an internet provider to be running tv stations, newspapers, tv cable service, phone service, home security systems and the like.

death to monopolization.
InvalidError
join:2008-02-03

InvalidError

Member

said by cog_biz_user:

what right does rogers and bell have running a hockey team?

The same right as any entity with spare cash to invest/spend in whatever they feel like... if you can afford to legally own something, nobody is going to stop you from doing so as long as you can afford to pay for it.

i've always ranted that telecom in canada is mis-managed, but this just takes the cake.
said by cog_biz_user:

there should be no reason for an internet provider to be running tv stations, newspapers, tv cable service, phone service, home security systems and the like.

Vertical integration is the natural course of things... the telco already owns the copper plant, adding ADSL/VDSL to it for internet adds relatively little cost while significantly increasing revenue and adding IPTV to that adds relatively little more extra cost while adding yet more significant revenue opportunities. Same goes for the cablecos where they already have a copper plant for TV, adding internet adds relatively little cost to that and adding phone on the back of DOCSIS infrastructure adds almost no cost. Each incremental extra service riding on existing infrastructure makes the whole package increasingly cost-efficient and profitable.

It may not be funny from the consumer viewpoint but it all makes perfectly logical business sense.
MaynardKrebs
We did it. We heaved Steve. Yipee.
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I just hope that when it comes to any losses from 'sports' operations that the CRTC not include them in the consideration of what fair tariffs might be.
freejazz_RdJ
join:2009-03-10

freejazz_RdJ

Member

said by MaynardKrebs:

I just hope that when it comes to any losses from 'sports' operations that the CRTC not include them in the consideration of what fair tariffs might be.

They don't. The Phase II costing process doesn't allow the holding co. to use losses in another entity to justify a rate hike. Although in the 80's, they did use Bell's very profitable consulting division to reduce rate hikes. Hence why BCE was created.