March 9, 2010
At a 5000% mark-up, colour may be too expensive for most of us and we will be back to viewing the world in black and white, low resolution and high noise interference.
In Canada, radio airwaves or spectrum, a public resource, is managed by Industry Canada. The Canadian federal government with a $54 billion deficit hopes to gain c. $ 1 billion dollars through its spectrum 10-year licenses auction to cash in on cellphone industry’s astronomical profits (ex. 2006 total revenue $12.7 billion, 2008 total revenues c. 15.9 billion) Was the 2009 spectrum auction a bargain basement for telecommunications giants?
Rogers Communications Inc., Bell Canada Inc. and Telus Corp, Canada’s largest cellphone providers have held spectrum licences for cellphone services in Canada. In 2006 alone Canada’s cellphone industry total revenue was $12.7 billion, 95% of this going to these three companies who- lacking competition- charged higher rates and provided poorer services than services in peer countries. In 2008 the total revenue for Canadian cellphone companies was $15.9 billion and in 2010 cellphone providers Rogers Communications Inc., Bell Canada Inc., Telus Corp, Fido and Virgin charged up to a 5000% mark-up even calculations included technology and overhead costs. Prices were so high and customer service so bad that Marketplace held a “Canada’s Worst Cellphone Bill” contest (Mesley 2010-03-05).
It is no wonder that Rogers Communications Inc. (NYSE: RCI) is listed by Forbes as having Aggressive Growth potential. Should we applaud the growth for Rogers investors or lament the management of the Spectrum commons?
“Spectrum is a catch-all term for the radio airwaves that many wireless gizmos use to communicate information. Radios use spectrum, as do the rabbit-ear antennas on older television sets. The CBC, for example, is broadcast free to many parts of Canada using a part of the electromagnetic spectrum. Cellphones, of course, also use it. Spectrum is divided into different frequencies and measured in units called hertz. The government extracts big revenue from selling spectrum licences to cellphone companies, because those licences are limited while demand is high. Other telecommunications providers would like to offer cellphone services but can’t, because they don’t have a spectrum licence. The auction is expected to earn the government at least $1 billion. A number of smaller regional companies, including Winnipeg-based Manitoba Telecom Services Inc. and Regina-based SaskTel, also have licences and offer cellphone services (Nowak 2008-05-26).
See map of cellphone costs worldwide.
1789 Jeremy Bentham “considered protection from harm, as more basic (and an aim of regulation) than provision of enjoyments: “the care of providing for his enjoyments ought to be left almost entirely to each individual: the principal function of government being to protect him from suffering” (Bentham 1789/1948:301, quoted in Shrader-Frechette 1991:285). An assessor’s prima facie (at first sight) duty is to minimise the chance that an unsafe technology is implemented; in order to minimise public risk. This is a value judgement: is it more important to protect the public from harm (hazards from risky technologies, such as cellular towers), than to provide welfare (benefits from new technologies, such as third generation services and better cellular coverage)? The perception and response type I and type II errors in regulation reveal the rationality of the regulator. The research analyses the national
thresholds pertaining to RF human hazards and spurious emissions (Madjar 2008-08).”
1864 to 1873 James Clerk Maxwell (1831-1894), a Scot theoretical physicist, demonstrated that four relatively simple equations could fully describe electric and magnetic fields and their interaction. He described how charges and currents produce an Electro Magnetic Radio wave (Madjar 2008-08).”
1887, in the research laboratory of a young German physicist, Heinrich Hertz, the first radio transmitter began working briefly over a range of just a few metres (Madjar 2008-08).”
1895-05-07. Alexander Popov (1859-1906) demonstrated his instrument for the detection and recording of electrical oscillations (Madjar 2008-08).”
1895-spring In the spring of the same year, Guglielmo Marconi (1874- 1937) took his wireless experiments outdoors and soon discovered that an intervening hill was no barrier to the reception of electromagnetic waves (Madjar 2008-08).”
1987-1991 New Zealand was the first country to apply the Wireless Act in 1903 (one year before the UK); the first RF Auction in the world occurred there in 1989. Neo-liberal ideologues promoted structural adjustment program which was more drastic than that inaugurated by Margaret Thatcher in Great Britain (Herman and McChesney 1997:178-9). Their 1987-1991 auction of UHF spectrum resulted in the acquisition of RF (Herman and McChesney 1997:180) (Madjar 2008-08:47).”
2002 The economist Vernon L. Smith, the laureate of Nobel Prize 2002, published (Smith 1962) that only under perfect competition, the market price establishes equilibrium between supply and demand- at the level, where the value assigned to a good by a marginal buyer is as high as that of a marginal seller (Madjar 2008-08:47).”
Today there are more than 3 billion cellular telephones worldwide.
2007-11 Even though Canada’s cellphone industry made $12.7 billion in 2006, 95% of the total revenue went to Rogers Communications Inc., Bell Canada Inc. and Telus Corp who charged higher rates and provided poorer services than peer countries because of lack of competition (Nowak 2008-05-26)
2008 In 2008 c. 60 % of Canadians subscribed to a cellphone service, subtantially behind the rest of the industrialized world. Countries such as Denmark and Norway where c. 90% of the population are subscribed and rates are much lower (Nowak 2008-05-26)
Instituting special breaks in the auction was the government’s way of spurring competition (Nowak 2008-05-26)
2008 The total revenue for Canadian cellphone companies was $15.9 billion and in 2010 cellphone providers Rogers Communications Inc., Bell Canada Inc., Telus Corp, Fido and Virgin charged up to a 5000% mark-up even when calculations included technology and overhead costs. Prices were so high and customer service so bad that Marketplace held a “Canada’s Worst Cellphone Bill” contest (Mesley 2010-03-05).
2008-08 Haim Mazar Madjar defended his dissertation entitled “An Analysis of Regulatory Framework for Wireless Communications, Societal Concerns and Risk: the Case of Radio Frequency (RF) Allocation and Licensing” at Middlesex University in which he analysed the role of culture and geography in allocation and licensing of the radio frequency (RF) spectrum in different nations. Using an inter-disciplinary approach for example, he explored contrasting risk-management regulatory frameworks/attitudes in the UK, France, US and Ecuador. He summarized and used 3 alternative sociological theories including Mary Douglas et al.’s Cultural Theory (CT) re: categorising countries in terms of perceptual filters. Bounded Rationality (BR) is used to investigate and explain these apparent irrationalities. Rational Field Theory (RFT) showed how beliefs and values guide administrations in RF regulation. Wireless regulation is now divided into two major camps (the EU and the US), which differ in their risk concerns, approach to topdown mandated standards, allocation of RF spectrum to licence-exempt bands and type approval process.
2010-03-04 The Canadian federal government announced its response to the $54 billion deficit which will take the form of $17.6 billion savings (2010-1015) by streamlining and reducing the operating and administrative costs of government departments.
2010-03-04 The Canadian federal budget has confused opposition politicians and industry observers alike as to whether Canada will open its doors to foreign telecommunications companies. The government promised to increase competition and investment in the telecommunications sector, which will lead to greater innovation and lower prices for consumers by removing foreign ownership restrictions on satellites. However, critic Marc Garneau claimed the budget was an overall disappointment in terms of the digital economy as there is no national digital economy plan and future plans include vague allusions to further studies in terms of fast and affordable broadband internet access for all Canadians. Canada was a leader in the digital economy in 2000. Now we are behind other OCED countries. This federal budget promised more on outdoor recreational infrastructure than on high-speed internet in rural areas (Nowak 2010-03-04).
Webliography and Bibliography
Madjar, Haim Mazar. 2008-08. “An Analysis of Regulatory Framework for Wireless Communications, Societal Concerns and Risk: the Case of Radio Frequency (RF) Allocation and Licensing.” PhD Dissertation. Supervisors: Dr. Peter Hough; David Ball; June Burnham. School of Health and Social Sciences. Middlesex University.
Hazlett, T. W.; Munoz, R. E.; Square, V. “A welfare analysis of spectrum allocation policies.” utfsm.cl
“Economic analysis of spectrum allocation policies focuses on competitive bidding for wireless licenses. Auctions generating high bids, as in Germany and the UK, are identified as “successful,” while those producing lower receipts, as in Switzerland and the … ”
McMillan, J. 1995. “Why auction the spectrum?” Telecommunications Policy. Elsevier. stanford.edu [PDF]
“Of the alternative spectrum allocation methods — administrative process, lottery, first come first served, and auction — economic theory, as well as various countries’ experiences, show that auctioning works best. As well as raising revenue, an auction assigns licenses to the firms … ”
Noam, E. 1998. “Spectrum Auctions: Yesterday’s Heresy, Today’s Orthodoxy, Tomorrow’s” The Journal of Law and Economics. University of Chicago Press.
Nowak, Peter. 2008-05-26. “Wireless spectrum: Auction of radio airwaves will influence Canada’s prosperity.” CBC News
Nowak, Peter. 2010-03-04. “Budget sows confusion over telecom rules.” CBC News
May 2, 2009
Swine flu, aka A (H1N1) and North American influenza.
1994 Smithfield Foods Inc. who own half of the Granjas Carroll de Mexico, began operating pig farms in the region By the time of the pandemic in March 2009, they were the major producer in the country, with 907 workers, 500,000 thousand pigs in developing states of Veracruz and Puebla. Their website from their headquarters in Perote, Mexico claimed that they 56,000 sows in 2008 producing 950,000 hogs. They are 12 such mega farms surrounding La Gloria, Mexico, a hillside hamlet of c. 3,000 people in the located in the municipality of Perote, Veracruz. Residents of La Gloria, Mexico have long complained that some of the pits that hold pig waste are not properly lined; they fear their groundwater is contaminated. They’re frustrated and angry, too, about the stench and the swarms of flies that invade their village. Granjas Carroll de Mexico, half-owned by U.S.-based Smithfield Foods Inc., operates dozens of farms around La Gloria.
2009-02 In the end of February in La Gloria, Mexico, a hillside hamlet of c. 3,000 people in the located in the municipality of Perote, Veracruz, many people became ill with symptoms similar to a bad cold.
2009-03-18 Mexican government reported an unusually high level of flu-like illnesses.
2009-03-23 Veracruz health officials arrived in La Gloria, Mexico to take saliva samples. About a third of some 1,300 townspeople who sought medical attention – 450 or so – were diagnosed with acute respiratory infections and given surgical masks and antibiotics. (Washington Post).
Edgar fell ill a bit later; the energetic 5-year-old retreated to his bed with a high fever. Other kids in his school already were sick.
2009-04-12 “By early April, the Veracruz government notified Mexican authorities of a possible flu outbreak in La Gloria. This alert happened to come around Holy Week, a time when lots of people in this largely Catholic country travel to visit family. On April 12, Mexican health authorities notified the CDC and the Pan American Health Organization of the unexplained cases of severe respiratory illness. One day later, people started dying (Cohen and Rodriguez 2009-05-01).”
2009-04-13 Adela Maria Gutierrez, a 38-year-old mother of three, was the first to die of H1N1 influenza virus. She had “arrived at a hospital in Oaxaca, in far southern Mexico, gasping for air, her oxygen-starved hands and legs a ghastly shade of blue. Her death was not just tragic, but alarming: Gutierrez had worked door-to-door for Mexico’s tax collection agency, interviewing scores of people. As it turns out, one of her co-workers, a temporary employee, was from Veracruz, the state on the Gulf of Mexico where the first swine case was confirmed. Family members said that woman had a bad cough (Cohen and Rodriguez 2009-05-01).”
2009-04-12 First two cases of A (H1N1) in California BBC 2009 Outbreak Map.
2009-04-25 “A day after seven new cases are confirmed in the US, the World Health Organization declares a Public Health Emergency of International Concern. From April 17-25 1, 455 cases of suspected A (H1N1) flu investigated. BBC 2009 Outbreak Map.
2009-04-26 Canada had 6 confirmed cases of A (H1N1); US had 20; Mexico had 18 BBC 2009 Outbreak Map.
2009-04-28 Confirmed cases of A (H1N1): UK had 2, Spain had 2, US had 64; New Zealand had 3; Mexico had 20. BBC 2009 Outbreak Map.
2009-04-29 Confirmed cases of A (H1N1): Canada: 13; UK:5 (London, Polmont, Redditch, Paignton); Israel:2; Spain:10; US:91; New Zealand:3; Austria:1; Germany:3; Mexico: 26. Deaths caused by A (H1N1) Mexico: 7; US:1; BBC 2009 Outbreak Map.
2009-05-01 Confirmed cases of A (H1N1): Canada: 35; UK:10; Israel:2; Spain:13; US:109; New Zealand:4; Austria:1; Germany:4; Mexico: 300; Peru:1; Costa Rica:2; Netherlands:1; Switzerland:1; Hong Kong:1. Deaths caused by A (H1N1) Mexico: 12; US:1. The UK, US, Canada, Spain, Germany confirm cases of secondary transmission. BBC 2009 Outbreak Map.
2009-05 “Influenza A(H1N1) – update 8.1. 1 May 2009 — “The situation continues to evolve. As of 23:30 GMT, 1 May 2009, 13 countries have officially reported 367 cases of influenza A(H1N1) infection. The United States Government has reported 141 laboratory confirmed human cases, including one death. Mexico has reported 156 confirmed human cases of infection, including nine deaths. The following countries have reported laboratory confirmed cases with no deaths – Austria (1), Canada (34), China, Hong Kong, Special Administrative Region (1), Denmark (1), Germany (4), Israel (2), Netherlands (1), New Zealand (4), Spain (13), Switzerland (1) and the United Kingdom (8). Further information on the situation will be available on the WHO website on a regular basis. WHO advises no restriction of regular travel or closure of borders. It is considered prudent for people who are ill to delay international travel and for people developing symptoms following international travel to seek medical attention, in line with guidance from national authorities. There is also no risk of infection from this virus from consumption of well-cooked pork and pork products. Individuals are advised to wash hands thoroughly with soap and water on a regular basis and should seek medical attention if they develop any symptoms of influenza-like illness.”
2009-05-01 “Swine flu has been confirmed in 16 deaths, all from Mexico (one Mexican toddler died in Houston). It has sickened nearly 350 people in Mexico, and about 200 others from New York to New Zealand, including children, teens, adults, students and tourists. It has rattled the world’s financial markets, pushed oil prices down, caused a run on surgical masks and hand sanitizers, closed schools and churches, postponed sporting events, prompted travel bans, rerouted cruise ships(Cohen and Rodriguez 2009-05-01).”
BBC. 2009. Outbreak Map.
Cohen, Sharon; Rodriguez, Olga R. 2009-05-01. “How swine flu virus hopscotched the globe.” Washington Post
WHO. 2009-05-01-23:30 GMT. “Influenza A(H1N1) Update 8.1.