It turns out that the prices being charged wireless customers in Canada are extortionate. How would we know? The iPhone’s release in the US has opened the doors to the subject a crack – the iPhone is not available in Canada yet, with no release date in sight, but it has Canadians asking, Can I get one? and What will it cost?

Eventually, sure you’ll be able to get one. But as for cost … what costs an American $60.00 a month will cost a Canadian – according to best estimates based on current wireless rates – between $260.00 to $879.00 a month. That’s CAD, for those of you keeping track, but with the dollar at par it might as well be in USD. Can you imagine Americans paying $260.00 USD a month for an iPhone, let alone $879.00? It wouldn’t be the success it is, if that was the case – that’s for sure.

Some other figures: unlimited GSM wireless access (that’s iPhone’s technology (for now)) isn’t even available in Canada as of the time of this writing; the largest available amount is 500MB a month, from Rogers, and only from Rogers – for $210.00. 500MB is roughly enough for 70% of one CD. Additional use costs $21 per MB. In contrast, you can get 500MB for $45 in South Africa, $79 in Mozambique, and $103 in Tanzania. 1GB – twice the content – is $29 per month in Italy. Poland, Malaysia, Rwanda, and Romania all offer unlimited packages for under $50.00. And we pay $210.00 a month for 500MB. Just think about that for a second.

In the next 3 years, it’s expected that 20 average American households will move as much information a year as the entire Internet moved in 1995. In 2007, traffic to YouTube jumped 60%. Growth is happening, and people will want things like video downloaded to their phones. If Americans have it for $60 a month, can we be expected to pay hundreds of dollars a month, without choking on our outrage?

RIM Technologies, the creators of the Blackberry, are based in Canada. They have no control over what the airwaves cost, and they figure that if Canadian rates were competitive with international rates, they could sell roughly 8 times as many Blackberries to Canadians. But the airwaves are monopolised by 3 companies (triopolised?) – Rogers, Bell and Telus.

Demand is about to explode, and unless these three companies are presented with some competition – hopefully from people like Google or Apple who realise the money is in selling content and pushing advertising, not in renting bandwidth – then we can expect the collusion and the extortion to continue. Canadians have always been early adopters, and I for one wouldn’t be surprised if things like mobile downloading caught on with Canadians much faster that it has with people in other countries, should it ever become available to us. Fortunately, bandwidth is coming up for auction in Canada later this year, but it’s expected that these three companies, with the large amount of capital they command, will snap this bandwidth up and sit on it, just to preserve their dominance. It’s true that a portion of this bandwidth has been set aside, specifically designated for fourth party use, but the last time fourth parties bought bandwidth (namely Clearnet and Microcell), they were absorbed not long after by Telus and Rogers. Whether or not this will happen again remains to be seen.

The simple fact is, launching a telecom to compete with Bell or Rogers (and especially the accumulation of bandwidth it would take) is something that could take a century. Wee Canadian companies simply aren’t going to do it, for the simple reason that any small company going up against the big three would be on shaky ground for years. Investors, faced with a profitable buyout, will sell. Capital follows the money, and when the choices are to continue to back your tiny company in a market dominated by three titans, or sell and make back double your investment, the choice (from an investor’s point of view) is obvious. The point being, Canada will probably never produce a fourth company to compete with the three we already have – and even if they did, odds are it would follow the same uncompetitive practices as Bell, Rogers and Telus do now.

The solution I reluctantly propose is to encourage a large American company to come into Canada and introduce some real competition – something that will drive prices down to something like what our friends in Mozambique enjoy. So where is AT&T? Where’s Comcast?

As it turns out, Google in particular has been very aggressive about restricting the limitations that can be placed on the airwaves which were recently auctioned off in the US; thanks to Google’s efforts, a large chunk of newly opened bandwidth is designated as open to any applications and devices that consumers care to use. My greatest wish would be for Google to launch its own telecom here in Canada, to provide affordable and open bandwidth to consumers, and basically undercut the existing triopoly to the point where they either adapt to a more competitive market or close their doors.

However, this wish is not to be. As appealing as the Canadian market may be to US companies – underserved, overcharged, with virtually no competition – they are legally blocked from creating their own platforms in Canada. Our protectionist laws restrict foreign investors to purchasing, at most, a minority stake in an existing Canadian telecom. This will do absolutely nothing for competition, and will do absolutely nothing to improve service or drive down prices.

So whom do we have to thank for this? My finger is pointed at the government (naturally), which has coddled our companies since the beginning, and fostered this anti-competitive nursery environment. It wouldn’t be very nice for the Canadian media to be totally controlled by US companies – we’d like to see at least a majority stake of our telecoms in the hands of Canadians. But there is simply no fourth company in Canada with the resources to purchase this bandwidth out from under the bloated triopoly, and the strategy to grow in the long term, instead of just flipping bandwidth for profit. Only our government can save us at this point; they could either write strict and punishing (and fascist) legislation to regulate the industry, basically setting standards of quality that must be met and reasonable prices for them – something I think we can all agree seriously undermines the whole concept of a free market – or by simply opening the door to foreign investment a crack – something that supports a freer international market.

It doesn’t behoove the triopoly to encourage competition whatsoever. It doesn’t behoove the government to aggravate the triopoly either, but fortunately, it’s better to aggravate the telecoms than the Canadian electorate. We, at least, have to power to make our politicians unemployed. Step one towards holding our representatives accountable is spreading the word about the highway robbery being committed under our very noses – step two is to turn public sentiment into a political movement that will finally blow some fresh air into the suffocating claustrophobia of our current telecom cabal.