Earlier this year, Bell Canada announced a blockbuster $3.38 billion offer to buy Astral Media, Inc. It is just the latest rush towards media concentration in Canada as the country’s largest cable and phone companies acquire a growing number of television networks, cable services, radio and broadcast television outlets, magazines, and other media.

Bell Canada already owns CTV – a major broadcast network, and TSN sports. Now it is back for more — Astral Media, the company that owns HBO Canada, The Movie Network, Family, Viewers Choice and lots more.

If this deal wins approval, one company will control 37.6% of TV viewing in Canada, more than twice the amount of its largest competitor. It means Bell will be able to set rates for some of Canada’s most popular cable networks and shows — putting competitors at a major disadvantage and forcing you to pay more to watch.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Say No to Bell Canada.flv[/flv]

Say No to Bell’s ad campaign fighting Bell Canada’s attempt to buy Astral Media.  (1 minute)

The federal government has to approve this deal, and a growing number of competing media companies, consumer groups, and politicians are coming together to oppose it.

Stop the Cap! believes Bell Canada owns too much already, and has repeatedly demonstrated that when it flexes its marketplace muscle, consumers pay more for less service. Add your voice against this deal by submitting a letter to Canada’s Ministers of Heritage and Industry, the Competition Bureau, the CRTC and your Member of Parliament and visiting the other opposition websites noted below.

No company needs to own and control 79 TV channels, 107 radio stations and more than 100 major Canadian news, entertainment, and cultural websites.

Even smaller Canadian cable companies fear this deal. Cogeco Cable, Eastlink, and Quebecor (parent company of Vidéotron), have joined forces to launch saynotobell.ca, a website to help consumers fight back. Quebec-based consumer group Option consommateurs has its own online petition in French, and Openmedia’s Stop the Takeover Coalition includes a range of pro-consumer forces opposed to the deal:

• OpenMedia.ca
• the Public Interest Advocacy Centre (PIAC)
• the Canadian Internet Policy and Public Interest Clinic (CIPPIC)
• Canada Without Poverty and the CWP Advocacy Network,
• the Canadian Media Guild (which represents over 6,000 media workers, including those from CBC, Reuters, the Canadian Press, and Shaw Media),
• the Consumers’ Association of Canada,
• the Council of Canadians (Canada’s largest citizens’ group),
• the Council of Senior Citizens’ Organizations of British Columbia (COSCO),
• Union des consommateurs.

Some of the arguments against the deal to consider:

• Bell Canada’s TV audience share would be 50% greater than the share of any TV network in the US, Japan, UK, Australia, France, and Russia. It would allow one corporation to control the programming (including news) on a scale not seen outside of countries like Italy, Brazil, and Mexico. When politicians have that much control of the media, they use it to influence viewers. Would Bell do any different?
• Bell can set the rates, terms, and bundling requirements for popular cable programming and services. They have already shown a willingness to tell independent ISPs they must set usage limits on their customers just as Bell does already. What would stop them from insisting you subscribe to more services in order to watch the programming you want?
• Mergers=job losses and cost cutting to pay for inflated bonuses and “cost savings” to help finance these blockbuster deals. Without competition, original Canadian productions can be slashed to the bone or canceled altogether. Why deliver quality when you can limit viewers’ alternative choices instead?
• America allowed media consolidation in radio and television and turned vibrant local stations into corporate money-machines at the expense of local news, original shows, and local content. How many radio stations in the United States now operate like automated electronic jukeboxes? How many local TV newscasts signed off for good to “save money.” Can Canadian local news, weather, and informational programming survive Bell’s ax? If it happened in the United States, it can happen in Canada too.

Ensure diversity by disconnecting this Bell deal permanently, and tell your elected leaders to stop allowing endless media consolidation.

[flv width=”576″ height=”344″]http://www.phillipdampier.com/video/Globe and Mail How much of a competition threat is Bells Astral deal 8-24-12.flv[/flv]

The Globe and Mail considers the issue of Bell’s takeover bid for Astral Media. How will it affect Canadian consumers? (2 minutes)

TekSavvy, an independent Canadian Internet Service Provider, just announced some speed upgrades, changes, and some price adjustments for DSL customers in Quebec and Ontario:

Ontario

• The 12Mbps tier is being downgraded to 10Mbps with no price change;
• Current customers on the 12Mbps tier are being upgraded to 15Mbps free of charge;

Quebec

• Quebec customers who were on the 10Mbps/300 GB package will receive a price decrease to $41.99;

General Changes

• Customers subscribed to 25Mbps service will now have 10Mbps upload speed free of charge (up from 7Mbps);
• Packages at 640kbps & 2Mbps speeds have been discontinued;
• The 16Mbps package is being converted to 15Mbps with existing customers grandfathered at the higher speed.

The speed changes will take effect by Monday, Aug. 27.

TekSavvy uses phone lines from Bell and Telus for DSL service and also uses cable broadband networks owned by Rogers, Shaw, and Vidéotron. Unlike most Canadian providers, TekSavvy sells packages with generous usage allowances or, for a few dollars more, unlimited service.

TekSavvy Solutions, Inc., is one of the leading independent providers of telecommunications services in Canada. Founded in 1998, TSI provides residential, business and wholesale Internet and phone services in Canada.

While Verizon and AT&T have increasingly given up on their legacy landline networks, Bell Canada is showing that investment in their network to keep up with the times can make all the difference.

Ten years ago, Bell was hemorrhaging customers with the advent of cable “digital phone” service and the growing number of Canadians turning to cell phone service. Bell CEO and Alphabet Aktie advisor George Cope now believes the reason why hundreds of thousands of home phone customers permanently disconnect their phone lines year after year has more to do with Bell not providing the services customers want from a 21st century phone company.

Cope believes the key to turning around the landline business is to invest in it. Bell has spent hundreds of millions overhauling its phone network for the Internet era — replacing copper phone wires with fiber optics to enhance reliability and, more importantly, sell broadband service at speeds customers demand.

“I’ve never felt more positive about our consumer land line business than I do right now,” Cope told investors on a recent conference call.

Bell’s strategy for success is its Fibe network — fiber to the neighborhood service similar to AT&T’s U-verse in some areas, straight fiber to the home service (like Verizon FiOS) in others. While Bell lost at least 82,000 landline customers during the last quarter where it still depends on a legacy copper wire network, Bell keeps (or signs up) 90 percent of its landline customers choosing Fibe.

At least 2.4 million Canadians have signed up for Fibe service in southern Ontario and Quebec, many attracted to its television package and increased broadband speeds. But the Globe and Mail also notes the unintended consequence of improved infrastructure appears to be rescuing the beleaguered landline business.

So far Wall Street appears skeptical, however. Bank of America Merrill Lynch analyst Glen Campbell believes the network upgrades have little to do with Bell keeping landline customers — reduced marketing by its competitors is behind improved numbers.

Bell’s biggest profits no longer come from the home phone business — television is where the real money is earned. But the company says landline service remains a predictable revenue stream, and it is not worth sacrificing when it earns Bell 39.9 percent profit margins.

Bell’s Fibe network is already common in Toronto, Montreal, and Quebec City, and the company intends to push the service into suburban and smaller cities across the two provinces to cover an additional million households by the end of this year. Both Verizon and AT&T have suspended further build-outs of their respective network upgrades — FiOS and U-verse.

It’s back to school season and Bell is teaching Canadian students a lesson in “bait and switch” broadband — pitching attractive broadband offers with generous usage allowances that evaporate when the school year ends.

Our regular Canadian reader Alex fills us in on the fine print (underlining ours):

The main lure is an extra 250GB of usage per month, but only for the first eight months. The activation fee and part of the monthly fee is also waived for the same amount of time.

Unfortunately, once the promotion expires (timed precisely after two college/university semesters are over), the price can increase by as much as $14 while the usage caps will be decreased by as much as 94%. Bell currently has a $25/month option to add 125GB. With or without it, the limit for usage based billing overlimit fees is $80.

Rogers usually launches a similar promotion for students, at similar prices. Back-to-school is also a competitive market for Canada’s cell phone companies.

Upon closer examination, we found the devil is indeed in the details:

• Internet 5: After eight months, your Internet usage allowance takes five, dropping like a rock from 265GB to 15GB per month. Your overlimit fee is $2.50/GB, up to $80.
• Fibe 5/1: After school is out, you’ll wonder why you took this deal when your 265GB allowance gets slashed to 15GB per month. Same overlimit fee as above.
• Fibe 15/10: You better have a long summer vacation planned when your 325GB usage cap falls to 75GB a month. That’s speed you can’t really use with an overlimit fee of $2/GB, up to $80.
• Fibe 25/10: $50 a month should buy a lot, but after eight months your 375GB shrinks more than half — to 125GB a month with an overlimit fee of $1.50/GB, up to $80.

Openmedia.ca is recommending Canadians take their own permanent vacation from cable and phone company Internet Overcharging schemes and consider switching to one of several independent ISPs offering far better usage allowances or unlimited use plans. The consumer group has a website to help direct you to the providers serving your province. In their view, not doing business with the bait and switch providers will send them a message they have to do better to compete for your business.

Otero

When a former labor leader suddenly starts advocating for the interests of AT&T and other super-sized telecommunications companies, even as AT&T’s unionized work force prepared to strike, the smell of Big Telecom money and influence permeates the air.

Jack Otero, identified in the Des Moines Register as “a former member of the AFL-CIO Executive Council and past national president of the AFL-CIO’s Labor Council for Latin American Advancement,” penned a particularly suspicious love letter to deregulation that might as well have been written by AT&T’s director of government relations:

[…]Industries — like broadband Internet — are thriving and creating innovations. Tossing a regulatory grenade into these businesses could wreck markets that create value for consumers and jobs for workers.

The United States is one of the most wired nations in the world. More than 95 percent of households have access to at least one wireline broadband provider, and the vast majority can connect at speeds exceeding 100 Mbps. And monthly packages start as low as $15. That means more families can go online to improve their job skills, look for work or help the kids with their school assignments.

More choices and higher speeds — the signs of a vibrant market — are the product of private investment, not public dollars. Internet service providers have invested over $250 billion in the last four years alone. This has created roughly half a million jobs laying fiber-optic and coaxial cable.

But some squeaky wheels are demanding heavy-handed regulations that would move our broadband Internet to the European model, where taxpayers have to subsidize outdated networks with slow speeds. Some want broadband providers to be required to lease their networks to competitors at discounted prices — as they do in Europe. But lawmakers in both parties agree that this policy, tried in the 1996 Telecommunications Act, failed miserably.

Others argue that broadband Internet providers should not be able to impose a small surcharge on the tiny percentage (less than 1 percent) of consumers who download hundreds of movies and tens of thousands of songs every month — effectively the data usage of a business. They say these fees discriminate against online video companies like Netflix. But that’s silly. More than 99 percent of users can watch plenty of Apple TV or Netflix without approaching the lowest data allotment. Without tiered pricing plans, the rest of us would have to underwrite these super-users.

Okay then.

Otero’s Fantasy World of Broadband sounds great, only it does not exist for the vast majority of Americans. Are most of us able to connect at speeds exceeding 100Mbps?

If you happen to live in a community served by a publicly-owned broadband provider Otero effectively dismisses, you can almost take this fact for granted.

Some of America’s most advanced telecommunications providers are actually owned by the public they serve in dozens of communities small and large. EPB Fiber, Greenlight, Fibrant, Lafayette’s LUS Fiber, among others, deliver super-fast upload and download speeds at very reasonable prices while the giant phone and cable companies offer less service for more money.

The only major telecommunications company with a wide deployment of fiber-to-the-home service is Verizon Communications.

You cannot easily buy residential 100Mbps service from Time Warner Cable, AT&T, CenturyLink, Frontier, FairPoint, or a myriad of other telecom companies at any price, unless you purchase an obscenely expensive business account. From the rest, 100Mbps service typically sets you back $100 a month.

Otero’s quote of affordable $15 broadband is not easy to come by either. It usually requires the customer to qualify for food stamps or certain welfare programs, have a family with school-age children, a perfect payment history, and no recent record of subscribing to broadband service at the regular price.

The only people who believe America is the home of a vibrant market for broadband service are paid employees of telecom companies, paid-off politicians, or their sock-puppet friends and organizations who more often than not receive substantial contributions from phone or cable companies. The fact is, the United States endures a home broadband duopoly in most communities — one cable and one phone company. They charge roughly the same rates for a level of service that Europe and Asia left behind years ago. Broadband prices keep going up here, going down there.

Simply put, Mr. Otero and actual reality have yet to meet. Consider his nonsensical diatribe about the impact of the “heavy-handed” 1996 Telecommunications Act, actually a festival of mindless deregulation that resulted in sweeping consolidation in the telecommunications and broadcasting business and higher prices for consumers.

Otero is upset that big companies like AT&T and Verizon originally had to open up their networks in the early 1990s to independent Internet Service Providers who purchased wholesale access at fair (yet profitable) prices. Those fledgling ISPs developed and marketed third-party Internet service based on those open network rates. Remember the days when you could choose your ISP from a whole host of providers? In some markets, this tradition carried forward with DSL service, but for most it would not last.

The telecommunications industry managed to successfully lobby the government and federal regulators to change the rules. Phone companies did not appreciate the fact they had to open their networks for fair access while cable operators did not. So in 2005, the FCC allowed both to control their broadband networks like third world despots. Competitors were effectively not allowed. Wholesale access, where available, was priced at rates that usually guaranteed few ISPs would ever undercut the cable or phone company’s own broadband product.

The lawmakers who believed open networks represented awful policy were almost entirely corporate-friendly or recipients of enormous campaign contributions from the telecom companies themselves.

So which market is actually on the road to failure?

The LCLAA couldn’t do enough to help AT&T swallow up competitor T-Mobile USA.

The American broadband business model is a firmly established duopoly that charges some of the world’s highest prices and has rapidly fallen behind those “failures” in Europe.

In the United Kingdom, BT — the national phone company, is required to sell access at the wholesale rates Otero dismisses as bad policy. As a result, UK consumers have a greater choice of service providers, and at speeds that are increasingly outpacing the United States. Nationally backed fiber to the home networks in eastern Europe and the Baltic states have already blown past the average speeds Americans can affordably buy from the cable company.

Even Canada requires Bell, the dominant phone company, to open its network to independent ISPs selling DSL service. Without this, Canadians would rarely have a chance to find a service provider offering unlimited, flat rate service.

Otero’s final, and most-tired argument is that data caps force “average” users to subsidize “heavy” users. In fact, as Stop the Cap! reported this week, that fallacy can be safely flushed away when you consider the largest ISPs pay, on average, just $1 per month per subscriber for usage, and that price is dropping fast. The only thing being subsidized here is the telecom “dollar-a-holler” fund, paid to various mouthpiece organizations who deliver the industry’s talking points without looking too obvious.

The Des Moines Register omitted the rest of Mr. Otero’s industry connections. We’re always here to help at Stop the Cap!, so here is what the newspaper forgot:

• Mr. Otero is a board member of Directors of the U.S. Hispanic Leadership Institute (USHLI), a group funded in part by AT&T and Verizon;
• He is the past president of the Labor Council for Latin American Advancement, a group that enthusiastically supported the anti-competitive merger of AT&T and T-Mobile USA;

Mr. Otero has a side hobby of penning nearly identical editorials with largely these same broadband talking points. One wonders what might motivate him into writing letters to the Des Moines Register, the Lexington Herald-Leader, the Gainesville Sun, the Star-Banner, and the Ledger-Inquirer.

Otero may have a case for plagiarism, if he chooses to pursue it, against Mr. Roger Campos, president of the Minority Business RoundTable (the top cable lobbyist, the National Cable & Telecommunications Association is labeled an MBRT “strategic partner” on their website). Campos uses some of the exact same talking points in his own “roundtable” of letters to the editor sent to newspapers all over the place, including the Ventura County Star, the Leaf Chronicle, and the Daily Herald.