Fast

FACTSCANADIAN CENTRE FOR POLICY ALTERNATIVES - MANITOBA December 30 , 2020 The price of privatization at MTS: higher prices, fewer jobs Previously published in the Winnipeg Free Press December 29, 2020. alternative.

anitoba Hydro Chief Executive Premier Gary Filmon assured Office Jay Grewal said this Manitobans that nothing could be further Mfall that in the future the from the truth than the rumours that his Crown Corporation may cease to have a government was thinking of selling MTS. monopoly on the distribution of electrical The following year his government power. This revived public concerns pushed through legislation that led to the that the provincial government was privatization of MTS in 1997 at a price considering privatizing Hydro. that the Canadian Radio Television- While Manitoba Hydro publicists were Telecommunications Commission quick to assure people that nothing could estimated was less than its market value. be further from the truth, there is no This meant that investors stood to make a avoiding the fact that: few things please tidy profit on their purchase—made even tidier by the fact that the government the current government more than the there is an selling off of public assets: witness the provided interest-free loans to purchasers ongoing privatization of public housing. and guaranteed them a six per cent dividend on their investment. And while The recent revelation that the government MTS’s senior managers were treated to has instructed Manitoba Hydro significant pay increases, the company’s International (the arm of the corporation employees had to fight a 17-year court involved in international consulting) battle to regain the full benefit of their CCPA-MB and Manitoba Hydro Telecom (which pension plan. In the workplace increases 301 - 583 Ellice Ave. provides broadband services in rural and Winnipeg, MB in the pace of work and layoffs were the northern Manitoba) to stop pursuing new R3B 1Z7 order of the day. Profits and jobs were and existing projects suggests that the shipped out of province. Comparisons government is considering hiving off and with Sasktel, the last provincially phone disposing of portions of the corporation. owned telecommunications company (204) 927-3200 In the case of Manitoba Hydro Telecom, in the country, regularly showed that email it appears the government may be getting privatization had led to higher service [email protected] ready to turn its northern and rural costs and reduced benefits to Manitobans. website broadband network over to Bell MTS. But, apparently things could get worse. www.policyalternatives.ca/ Manitobans with long memories will recall As a provincially based corporation the manitoba that Manitoba once owned MTS (which privatized MTS competed with Bell, blog was then called the Manitoba Telephone TELUS and Rogers for a share of the www.policyfix.ca System). They will also recall that in the telecommunication market, the presence twitter 1995 election campaign Conservative of MTS exerted a downward force on @ccpamb prices. In markets where Bell, TELUS and The number of Unifor members employed Rogers faced no regional competitor, prices at the company has fallen from 850 to were higher and less competitive. Go figure. 660. The Telecommunications Employees The big boys would not tolerate such a Association of Manitoba has also reported situation and in 2016, Bell announced job losses since Bell took over. These that it wanted to buy MTS. The Canadian declines are due to numerous factors, Media Concentration Research Project including technological change and the raised warning flags about the takeover. sale of subsidiaries. But also, the company In a report, Benjamin Klass and Dwayne has sought to increase the use of non- Winseck noted that, when compared to union contractors and shipped jobs out Bell, MTS invested more of its capital in of Manitoba and in some cases out of the its networks (meaning it provided better country. service) and that most MTS operations So, nearly a quarter century into “compare either favourably with or are privatization, what was once a provincially performing better than anything Bell controlled telecommunications system

continued... offers throughout its own territories.” is now owned by an Eastern Canadian They cautioned that allowing the takeover corporation, which alongside two other “would result in increased prices above the large corporations are raising rates competitive levels that currently prevail.” and cutting service. The fact that the The federal Competition Canada came to corporation is referred to as Bell MTS similar conclusions. Its 2017 report on the should not fool anyone: the “MTS” is proposed takeover observed that: little more than the left-over bit of jam as a result of coordinated behaviour that adheres to the plutocrat’s lips after a among Bell, TELUS and Rogers, satisfying chowdown. In other words, it is mobile wireless prices in Canada are branding and nothing more. higher in regions where Bell, TELUS History rarely repeats itself exactly, and Rogers do not face competition but it often rhymes. Given this history, from a strong regional competitor. Manitobans would be well advised to ask Conversely, the Bureau concluded that themselves if the provincial government is where Bell, TELUS and Rogers face competition from a strong regional not preparing to take Manitoba Hydro to competitor, prices are substantially market. lower. Despite this, the federal government let Bell Doug Smith is a Winnipeg writer and buy MTS. The strong regional competitor researcher. A shorter version of this piece is gone, and surprise, surprise, Manitoba was published in the Winnipeg Free Press. telecommunication costs have risen. Bell CCPA-MB MTS’s basic phone services cost $32.56 a 301-583 Ellice Ave. month, Sasktel’s $21.54 a month. Bell MTS’s Winnipeg, MB basic internet price is $90.95 a month, R3B 1Z7 Sasktel’s is $69.95. Bell MTS charges $70 a month for basic internet, Sasktel charges $65. phone Klass and Winseck also warned that the sale (204) 927-3200 of MTS to Bell would jeopardize “unique email and innovative options that people value [email protected] greatly, notably unlimited mobile data.” At website the time of the sale only MTS and SaskTel www.policyalternatives.ca/ offered unlimited mobile data. A year after manitoba taking over MTS, Bell cancelled the service blog for new customers. www.policyfix.ca Bell-MTS has continued to shed jobs. twitter When Bell bought the MTS, 623 members @ccpamb worked there: the figure is down to 490. References available upon request.