Saturday, July 12, 2008

Stephen Harper's NDP playbook....income trusts/ATM fees/text messaging fees

I am sure that many of you have shuddered at the thought of the NDP controlling Canada’s economy......guess what?, they do.

The NDP are the brain trust behind Stephen Harper's income trust tax, Flaherty’s ATM fee to nowhere scheme and now Jim Prentice’s new found respect for cell phone costs....two weeks after he personally approved the leveraged buyout of BCE that will raise the cost of telecommunications services in this country across the board.

What's next for irrelevant interventions from the federal cabinet?
Mark Sutcliffe,
The Ottawa Citizen
Published: Saturday, July 12, 2008

First it was Finance Minister Jim Flaherty exploding at the banks about their ATM service charges. Now Industry Minister Jim Flaherty is huffing and puffing at the telecoms over text-message fees. Maybe the Harper government should start a new department to shield Canadians from inconsequential consumer costs that we could easily avoid on our own.

Call it the Ministry of Immaterial and Irrelevant Intervention.

Just a few months after Flaherty defended (to absolutely no effect) the many Canadians who were paying a dollar for the convenience of withdrawing cash from one bank while using a competitor's bank machine, Prentice has now climbed aboard his high horse to fight the big bad telecommunications giants who plan to charge customers 15 cents for an incoming text message.

What's next? A full investigation into bubble-gum machines that sometimes take your quarter without giving you a jawbreaker? A sweeping crackdown on diners that charge you 20 cents for an extra packet of jam with your toast?

"While I have no desire to interfere with the day-to-day business decisions of two private companies, I do have a duty as minister of industry, when necessary, to protect the interests of the consuming public," Prentice said in a statement.

Which is a bit like saying you have no desire to eat dessert while you have a forkful of pie in your mouth.

"I believe this was an ill-thought-out decision," Prentice continued.

Prentice actually demanded meetings with the chief executives of Bell and Telus to talk about their new charges. He said the meetings would likely result in a solution that "provides the best service to consumers at the best price."

Good thing the government is available to share its expertise on providing high-quality service at the best possible price. They excel at that.

To be fair, a charge for incoming text messages does seem a bit illogical, since the telecoms are already charging the sender. It's a bit like getting hit with a bill for all the mail you receive, even if it's junk mail (let's not give Canada Post any ideas). And 15 cents per text message could have the potential to add up to millions of dollars.

But even if it's a bad decision, is it up to the minister or the market to decide? If consumers don't like how they're being treated by a company, they can argue for changes. If the company doesn't listen, they can always switch to a competitor. Rogers says it has no plans to charge for incoming texts.

But I guess it's too much to expect from a Conservative to let market forces rule on whether corporate decisions are "ill-thought-out" or the fair price for a service is being charged.

Interestingly, when Rogers recently launched its service plan for the new iPhone, consumers objected that the prices were too high. Facing a backlash, Rogers relented and cut the fees by as much as 50 per cent. Somehow they managed to do this without Prentice putting Ted Rogers over his knee.

"We have serious concerns" about the 15-cent charges, Prentice said, particularly the fact that the charge will apply to incoming spam.

But in a radio interview the next day, Prentice acknowledged that since the cellphone companies are very good at screening out spam texts, it wouldn't apply to many messages at all.

Besides, 95 per cent of cellphone users are on a plan that gives them a package rate for text messages, for as little as a few dollars per month, so they won't pay the 15-cent fee. And if you don't send text messages, you can disable that feature from your phone and you'll never be hit with a charge.

So where's the sudden requirement for government intervention?

Prentice says his own family employs text messaging for regular communication.

"It is how we stay in touch," he told one newspaper. "I can tell you it's how I get all my family information and instructions."

Maybe one of those instructions was, "OMG, they R going 2 charge for msgs ): Dad, pls stop them 2day."

Text-messaging has become so critical to his family, Prentice pointed out, that it was useful when one of his daughters suffered a recent health scare.

"It turned out fine, but in terms of getting her to the right doctors at the right time, it was text messaging that ensured that that happened," he said.

I guess paying an extra 15 cents wouldn't have been worth it in that situation.

For a group of conservatives, the Harper government is showing a surprising tendency to intervene in the marketplace over meaningless issues. Whether it's being done out of some well-meaning but poorly informed desire to help consumers or as a cynical attempt to get media time and votes by appearing to be on the side of ordinary Canadians, it should stop.

To use Prentice's words, attacking the telecoms over tiny fees that the vast majority of consumers will never have to pay was an ill-thought-out decision.

© The Ottawa Citizen 2008


Dr Mike said...

"To use Prentice's words, attacking the telecoms over tiny fees that the vast majority of consumers will never have to pay was an ill-thought-out decision."

Just another in a long line of ill-thought-out decisions.

These guys will take up any cause to pander for a few votes--especially with Happy Jack Layton whispering sweet nothings in their ears.

Happy Jack , please vote with us on income trusts & we will make you smile forever making you the happiest man on earth.

We will do our best to ward off those pesky ATM fees & those unreal 15 cent cell phone charges--of course , if they don`t work out , we tried.

These clowns moan & groan about a nickel here & a dime there , but thought nothing of shafting investors for 35 billion dollars & thus cheated the taxpayer out of a few billion per year in lost revenue.

It is time for the "new" Conservative party to take a hike & take Happy Jack with you.

Dr Mike Popovich.

Anonymous said...

Dr. Mike:

You're right. Income trust investors' loss equals one quarter trillion incoming text messages.....assuming you don't have a plan.

As for the tax fairness plan, it was all spam, since never have the CONs provided any evidence whatsoever of alleged tax leakage.

Brent Fullard

Anonymous said...

I'm hoping this government becomes as irrelevant as their policies.


Anonymous said...

Better for Prentice politically to make an issue of 15 cent text messaging feed, since the LBO of BCE and the huge run up in fees that it will induce was the sole product if this incompetent government's idiotic income trust tax.

Not only will the LBO of BCE turn the phantom tax leakage under an income trust into REAL TAX losses, it will now also cause the increase in telcom service costs....these are the unintended consequences manifested by the unintended consequences.

Imagine the unintended consequences of Harper ever forming a majority government? I shudder to think, to quote the blog article.

Dr Mike said...

anonymous said...

"Imagine the unintended consequences of Harper ever forming a majority government?"

Now that would be a nightmare.

We would be chasing Taliban for another 40 years.

We would have 7.4 billion dollars of tax leakage from the loss of all the income trusts.

All the remaining corporations will have been privatized by Abu Dhabi or private pension funds.

The Americans will own 90% of our fresh water & 100% of our natural resources.

President John McCain & Vice President Stephen Harper will be best buds.

Happy Jack Layton will be caught shaking a TD bank machine because he was rousted for that extra $1.50 in ATM fees.

It should be some future.

Lucky it was only a nightmare.

Dr Mike Popovich