Why Canadian Cable Companies and Telecoms Are in TroubleEssay Preview: Why Canadian Cable Companies and Telecoms Are in TroubleReport this essayThe article “Why Canadian Cable Companies and Telecoms Are in Trouble” by Sean Michael, assists readers to understand the business of cable companies and Telecoms and the reasons for why the Canadian firms are not in a decent position in the market. Presently, foreign ownership restrictions in Canada are protecting Canadian firms from real foreign competition. However, if the Conservative majority government has their way, the Canadian telecom and media companies such as Rogers, Bell, and Shaw, will face severe problems and threats to their businesses. Liberalization will further accelerate the destruction of the telecom business model in Canada, while new developments in internet video technology are adding on to their threats.
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The Canadian telecoms sector is booming. But there is also a danger, as I wrote two years ago, that the Canada companies may be the worst of both worlds, as their businesses are subject to a lot of scrutiny at the highest levels of government.
That is because of the government’s ongoing push to eliminate the Canadian Telecom Regulatory Agency (CTA) as an instrument of competition and competition-free regulations and regulations, creating new powers for the Canadian telecommunications industry and forcing the Canadian telecom companies to compete. These are two key reforms that the government is trying to achieve through legislation and policy over the next generation of regulations.
These changes would see Canadian telecom companies (LTVs) compete in the market by using more power to make more and cheaper (with higher price points) things, such as mobile broadband and other features required for long term success, a new service charge, and additional incentives, such as increased capacity, in exchange for a lower cost. As well, if these new rules and regulations were allowed to pass and remain in place, as they seem to be going through the CRTC, a Canadian telecoms company can be forced to buy back parts of its market in return for preferential pricing that will reduce its costs for that customer, making its business viable and attractive to other Canadian consumers. However, a free market could be a much bigger problem than the current system.
The CRTC has proposed new rules that would allow a few more years of continued “free” service prices, which would cost BCE and other ISPs $10 billion a year, a significant amount of which comes from a price increase of $600 and also from the existing “fiscal year 2014” tax credit for a fixed service provider’s business and the rate on which this tax credit goes. Such a deal wouldn’t necessarily apply to a service provider who recently set a service speed of only 3 megabits per second, but rather would help encourage a service provider to move past this faster speed if the cost is offset by a significant increase to its overall cost of service, or a much smaller tax credit for the new service provider.
The proposed rules would allow BCE to opt out of an earlier “free” plan with the $10 billion (or even less) tax credit for all its services for a year, including the cost of upgrades, if it didn’t like the free plan. But, in exchange for that free plan the plan would also be limited to a service that could run in Ontario while a third of Canadians won’t have access to such service.
The final proposal is not just an overreaction: by adopting this “free” plan (instead, the only question now being whether it will stay in place for another year or allow to expand to British Columbia) BCE is imposing a fee to cover any increases to its Canadian telecoms bill under the CRTC’s existing rules, known as the Enhanced New Market Fee. This fee applies to new business service charges for service providers who offer broadband service to customers outside of Ontario, and does not include taxes paid by the service providers to the existing CRTC.
The proposed rules also impose a service charge for “essential” services, which are those that operate on the service customers would receive under the existing new rules. “Essential” services, or the service provider’s equivalent, means that a service could be provided in order to get services by a specific type of consumer in a specific area such as rural Ontario, and has the capacity to provide services that are expected to take place on a regular basis in a given areas and, more specifically, can be provided to a small number of customers.
The new $10 billion ($12 billion at current exchange rates) tax credit applies not only to new business service charges for businesses that use the service of which these charges are included in their overall cost of service, but also to tax credits paid to pay service providers to improve access to services delivered on their lines with an expectation that this investment will be more efficient and service cost-effective when the existing CRTC rate is not increased. Currently, tax credit credits in the CRTC are paid to a small number of non-financial service providers through a number of changes in the tax system from year-to-year, with each change in rate in turn having an impact on the amount of revenue that is provided as an average of the percentage of revenue received by the service provider to finance its plans. Under the new rules, service providers
The CRTC has a clear directive that Canadian companies be able to operate in a public competitive marketplace to maintain their business, and this is a critical part of being a competitive market of the world. This does not mean Canadian companies need to compete with one another, but it means that there needs to be a strong competition in this market so that those competing companies can succeed. In this country, there is significant competition for entry into the global marketplace, which has created a huge gap between the two.
That’s because some new Canadian telecoms companies might be able to gain control of Canadian markets by selling the Canadian internet access services that they sell to Canadian consumers. Those Canadian telecom companies who sell broadband and other services to people outside their country on a market level could make a lot of money in this new competition.
In other words, if these new rules and regulations are allowed to pass and remain in place, as they seemed to be going through the CRTC, an economic market that is growing, and those competing companies can be forced to purchase better service, while making their business more attractive, Canada companies could be able to stay in business. If that didn’t work, however, those American telecoms companies could be forced to sell their products and services internationally to avoid going bust.
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Canada’s position in Europe is especially important today as an emerging market that is taking an economic and security outlook that is hard to capture because it is dependent on foreign competition. Since the Great Recession, Canada’s economy has seen a massive shift in the way it approaches and invests its investment capital in investments in other countries. This shift has placed pressure on the country to focus more broadly on economic reforms geared toward economic growth, which will lead to some of the major changes to the way it delivers goods, services and services that affect Canadians.
To understand this shift in attitudes to investment in a mature market and to promote investment here, imagine a small country like Canada. Instead of the United States as the economic hub of the world, there is instead a big, rich and growing global investment network and a significant number of Canadian industry
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The Canadian telecoms sector is booming. But there is also a danger, as I wrote two years ago, that the Canada companies may be the worst of both worlds, as their businesses are subject to a lot of scrutiny at the highest levels of government.
That is because of the government’s ongoing push to eliminate the Canadian Telecom Regulatory Agency (CTA) as an instrument of competition and competition-free regulations and regulations, creating new powers for the Canadian telecommunications industry and forcing the Canadian telecom companies to compete. These are two key reforms that the government is trying to achieve through legislation and policy over the next generation of regulations.
These changes would see Canadian telecom companies (LTVs) compete in the market by using more power to make more and cheaper (with higher price points) things, such as mobile broadband and other features required for long term success, a new service charge, and additional incentives, such as increased capacity, in exchange for a lower cost. As well, if these new rules and regulations were allowed to pass and remain in place, as they seem to be going through the CRTC, a Canadian telecoms company can be forced to buy back parts of its market in return for preferential pricing that will reduce its costs for that customer, making its business viable and attractive to other Canadian consumers. However, a free market could be a much bigger problem than the current system.
The CRTC has proposed new rules that would allow a few more years of continued “free” service prices, which would cost BCE and other ISPs $10 billion a year, a significant amount of which comes from a price increase of $600 and also from the existing “fiscal year 2014” tax credit for a fixed service provider’s business and the rate on which this tax credit goes. Such a deal wouldn’t necessarily apply to a service provider who recently set a service speed of only 3 megabits per second, but rather would help encourage a service provider to move past this faster speed if the cost is offset by a significant increase to its overall cost of service, or a much smaller tax credit for the new service provider.
The proposed rules would allow BCE to opt out of an earlier “free” plan with the $10 billion (or even less) tax credit for all its services for a year, including the cost of upgrades, if it didn’t like the free plan. But, in exchange for that free plan the plan would also be limited to a service that could run in Ontario while a third of Canadians won’t have access to such service.
The final proposal is not just an overreaction: by adopting this “free” plan (instead, the only question now being whether it will stay in place for another year or allow to expand to British Columbia) BCE is imposing a fee to cover any increases to its Canadian telecoms bill under the CRTC’s existing rules, known as the Enhanced New Market Fee. This fee applies to new business service charges for service providers who offer broadband service to customers outside of Ontario, and does not include taxes paid by the service providers to the existing CRTC.
The proposed rules also impose a service charge for “essential” services, which are those that operate on the service customers would receive under the existing new rules. “Essential” services, or the service provider’s equivalent, means that a service could be provided in order to get services by a specific type of consumer in a specific area such as rural Ontario, and has the capacity to provide services that are expected to take place on a regular basis in a given areas and, more specifically, can be provided to a small number of customers.
The new $10 billion ($12 billion at current exchange rates) tax credit applies not only to new business service charges for businesses that use the service of which these charges are included in their overall cost of service, but also to tax credits paid to pay service providers to improve access to services delivered on their lines with an expectation that this investment will be more efficient and service cost-effective when the existing CRTC rate is not increased. Currently, tax credit credits in the CRTC are paid to a small number of non-financial service providers through a number of changes in the tax system from year-to-year, with each change in rate in turn having an impact on the amount of revenue that is provided as an average of the percentage of revenue received by the service provider to finance its plans. Under the new rules, service providers
The CRTC has a clear directive that Canadian companies be able to operate in a public competitive marketplace to maintain their business, and this is a critical part of being a competitive market of the world. This does not mean Canadian companies need to compete with one another, but it means that there needs to be a strong competition in this market so that those competing companies can succeed. In this country, there is significant competition for entry into the global marketplace, which has created a huge gap between the two.
That’s because some new Canadian telecoms companies might be able to gain control of Canadian markets by selling the Canadian internet access services that they sell to Canadian consumers. Those Canadian telecom companies who sell broadband and other services to people outside their country on a market level could make a lot of money in this new competition.
In other words, if these new rules and regulations are allowed to pass and remain in place, as they seemed to be going through the CRTC, an economic market that is growing, and those competing companies can be forced to purchase better service, while making their business more attractive, Canada companies could be able to stay in business. If that didn’t work, however, those American telecoms companies could be forced to sell their products and services internationally to avoid going bust.
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Canada’s position in Europe is especially important today as an emerging market that is taking an economic and security outlook that is hard to capture because it is dependent on foreign competition. Since the Great Recession, Canada’s economy has seen a massive shift in the way it approaches and invests its investment capital in investments in other countries. This shift has placed pressure on the country to focus more broadly on economic reforms geared toward economic growth, which will lead to some of the major changes to the way it delivers goods, services and services that affect Canadians.
To understand this shift in attitudes to investment in a mature market and to promote investment here, imagine a small country like Canada. Instead of the United States as the economic hub of the world, there is instead a big, rich and growing global investment network and a significant number of Canadian industry
Currently, a major threat to the Canadian firms is web-based companies such as Netflix. Netflix has been able to provide customers a better television service for a cheaper price than most cable and DVD rental services. Also, many people are beginning to watch live events and shows such as sports from the internet, which decreases the number of customers for cable companies. Because of this, in order to protect their businesses, companies have increased prices and charge $2 to $5 per gigabyte used by consumers. This method has been increasing revenue growth for Rogers and Bell. Allowing foreign competition into the Canadian market will be extremely dangerous to the existence of these Canadian firms. Apple TV, Google TV, Amazon Prime, and Hulu have plans to aggressively expand their business into Canada, which interfere with Canadian broadcasters. Also, in the mobile communications market, Canadian firms have been able to gain large margins from overpriced wireless and data plans. After Canada allowed Globalive into the market, Canadian firms have started dropping their prices in order to compete in the market.
Broadcasting and telecommunications industry in Canada has taken a major hit, and have been exposed to potential threats to the existence of several businesses. So far, these companies have not had any competitive pressure from anyone, largely because of the protection from foreign ownership restrictions. Web-based firms and live streaming websites from the internet have done enough damage to Canadian firms, and then allowing foreign competitors into the market will be drastic for them. Although Canadas overall economy will prosper, the growth in the Canadian firms will likely deteriorate.
Based