Telcos Should Be Run By The Public, For The Public
In last week’s issue, we discussed how Canada Post is being underutilized, and how it could make a significant difference in communities around the country by offering postal banking services, helping to fund the green transition and creating an integrated (and expanded) urban delivery network. But it doesn’t stop there.
Private monopolies and oligopolies have always fought to get rid of their public competitors. Not only do public alternatives better and more equitably serve Canadians, but they also challenge the power and profits of the private monopolists. Many such examples exist in our history.
The big banks incessantly lobbied to kneecap and eventually shut down public savings banks in Canada, including the Post Office Savings Bank, in the late 1800s and first half of the 1900s.
In her 2019 book, The Sport and Prey of Capitalists, author Linda McQuaig describes how the Canadian Pacific Railway (CPR), a private company with a dominant position in the early 1900s, was desperate to get a monopoly. Following 1918, as many of its competitors started to go bankrupt, the CPR thought it would finally achieve its goal. Instead, the government formed the publicly owned Canadian National Railway, which would go on to take CPR’s customers, out-innovate it in radio and provide a better deal for workers.
The banks and the railways are just two of the oligopolies that benefited from public-sector competition focused on the public good. There are many more. Telecommunication services are incredibly important for keeping in touch with family, friends and colleagues — even more so in a global pandemic — but telecom companies have long fought to preserve private control over a natural monopoly.
When telephone services began to be rolled out in Canada in the late 1800s, our system was tied into AT&T’s Bell System and run by its subsidiary, the Bell Telephone Company of Canada. That’s why Canada and the United States use the same international calling code.
In much of the country, Bell had a virtual monopoly and expanded its services westward as CPR built the first railway to the Pacific Ocean (with a ton of government funding). However, not everyone was happy. As professor Dwayne Winseck describes, there were occasional steep rate increases, rural areas were not well-served and the west grew increasingly angry about the lack of service improvements. After important Bell patents expired in 1893 and 1894, there was a growing push for public ownership of telecom in certain provinces.
In 1906, Alberta purchased the Bell system to establish its provincial telecom company. Manitoba did the same in 1908, and Saskatchewan followed in 1909. That left Bell with a virtual monopoly in Quebec and Ontario, a private operator called BC Tel in British Columbia, and a collection of private companies in the Maritimes. (Newfoundland and Labrador wasn’t yet part of Canada.)
Winseck writes that as a result of public ownership, Manitoba expanded the telephone system to provide much better rural service, with particular attention paid to farmers. Though it lost money on the expansion, the government saw other benefits to serving its population. Subscriber numbers doubled by 1910 and again by 1914, and, according to Winseck, “Manitobans enjoyed some of the lowest rates in the world despite the fact that the ‘number of calls per subscriber was more than double that in the cities of Great Britain, Germany, Australia, and the United States.’”
Clearly, we already have a made-in-Canada example of what public telecom services could look like. After telecommunications were partially deregulated in the second half of the 20th century, there was a glimpse of competition before the sector was reconsolidated.
That collection of companies in the Maritimes? That’s Bell Aliant today. The public Manitoba Telecom Services was privatized in 1996 in the face of public opposition, and Bell resumed control in 2017. Alberta Government Telephones was also privatized in 1990. Today, you’d know it as Telus, which also bought the publicly owned Edmonton Telephones in 1995 and merged with BC Tel in 1998. The last public telco standing is SaskTel, which Saskatchewan’s right-wing government has tried to sell multiple times before backing down because of public outrage.
More than a century after Canadians were angry about high prices and inadequate rural telephone service, we have a similar situation with an oligopoly that makes massive profits while forcing us to pay some of the highest prices in the world for internet and cell phone service, and underserving rural communities despite public funding to close the “digital divide.” And every time these companies face a regulatory decision, they threaten to hike prices or reduce rural service.
This clearly can’t continue. Like the Prairie provinces did in the early 1900s, it’s time to demand public ownership of telecom services that are run in the public interest, with affordable rates and proper service to communities around the country. The alternative is a new national network, as the Canada Infrastructure Bank apparently considered building to compete with the existing oligopoly, but there are reasons to be wary of that approach.
While U.S. municipalities are having success building public broadband networks to escape the high fees and bad service of their telecom oligopoly, the same can’t be said of Australia. After privatizing Telstra, its national telecom company, Australia realized it needed faster internet, so its Labor Party set out to build a National Broadband Network in 2009 with every home connected to a fibre network.
However, after the right-wing Liberal Party took power in 2013, that all changed. The new government decided the network would use a “Multi-Technology Mix” of copper wiring and satellite connections that would deliver slower connections. Despite saying it would save money, it actually cost more, and Australians are furious they still have bad internet. Labor is even now suggesting the government buy the fibre networks of Telstra and other private operators to improve the public network because the Liberals botched it so badly.
The last thing we want is to give a newly elected Conservative prime minister the opportunity to get in the way of public telecom services. For that reason, we shouldn’t build a new network, but take control of the network shared by Bell and Telus that has been subsidized, given favourable regulatory treatment and was even partly publicly owned for many decades. That will give us a good base from which to build a network that serves all parts of the country at affordable prices, if not providing internet services for free to recognize how essential it is in the 21st century.
Canadians deserve better than a private oligopoly that rips them off for an essential service. Public telecom services could enable a broader rethinking of how we approach technology — and we’ll talk about that next week.
Perspectives from around the world
Kai Heron, associate editor at Roar Magazine, argues capitalist realism has given way to capitalist catastrophism where “we find ourselves caught between what is imminently ‘winnable’ in the here and now and where, with ever increasing urgency, we know that we need to be.”
Davide Mastracci, managing editor of Passage, writes about the pro-Israel bias in the Canadian media.
Ethan Cox, editor of Ricochet, writes about how employers are laying the foundation to cut the pay of people working from home.
Matt Hongoltz-Hetling, a New England-based journalist, explains how U.S. demand for renewable energy is fuelling hydro projects in Canada that damage environments and Indigenous hunting grounds.
Allyson M Pollock, Louisa Harding Edgar and Luke Clements make the case for a National Care Service for Britain’s elderly.
Brian Merchant, senior editor at OneZero, explains how dystopian fiction allows white people to pretend they’re oppressed while ignoring the real dystopia of Black and poor people.
Benjamin Braun, a political economist at the Max Planck Institute for the Study of Societies, argues for the socialization of central bank planning.
Natalija Majsova, an assistant professor at the University of Ljubljana, writes about the futures imagined in Soviet science fiction.
This week on Tech Won’t Save Us, I talk to Banu Subramaniam and Debjani Bhattacharyya about how India’s government is implementing a technofascist agenda and using COVID-19 to surveil poor and Muslim people. I also wrote about why we need to plan the intercity transportation system of the future for Jacobin.