Is This Progress? This Is Progress.

What Is Kaputall?

Oxford defines Kaput as "broken and useless; no longer working or effective" - similar to our unbalanced economic system. This is a page dedicated to the intersection of capitalism and social, political, and environmental problems.

Tuesday, 30 July 2013

Telecommunications Breakdown

Last Friday Bell Canada published an open letter to the Canadian Government, printed in numerous national publications. The telecommunications company is appealing to the public following Verizon's attempts to jump into the Canadian mobile phone market. In the wake of this move, I'd like to make a proposition that Canadians agitate to create a more effective market, including potentially forming a co-operative to meet the needs of Canadian consumers.

Canadians have some of the most expensive cellular rates in the world. While many reasons for this are cited, it comes down to the fact that there is minimal competition in the Canadian market. For the past few decades, Canadians have had minimal choices. Bell Canada Enterprises has been the largest player in Canada, and is privileged to hold about 30 per cent of the market share for cell phones. Bell and Rogers have been competing intensely for the last decade or so. Bell being represented in blue and Rogers in red. This is commonplace branding for Canadians who encounter Bell and Rogers countless times daily.

Bell, for example, owns a substantial part of the national telephone infrastructure, the Montréal Canadians, Maple Leaf Sports and Entertainment, and The Source. It also controls Bell Media, which includes CTV, TSN, the Comedy Network, MTV, Discovery, the Globe and Mail, and several radio stations. Not to be outdone, Rogers has similar investments in Canadian media. Shaw, which owns Global, is a third party, and Telus competes in the mobile market.

Collectively, Bell, Rogers, and Telus make up the "big three" in mobile phones. There are subsidiaries of each, but of course they do not really create more competition since they are owned and managed by the parent entities. The only independent national carriers are Wind, Public Mobile, and Mobilicity. Together these companies make up a very small share of the Canadian market (approximately 1.1 million plans or about 4 per cent). It's not by coincidence that these recent entrants to the market are small - there are two significant barriers to entry. Firstly, the CRTC regulations make it very challenging to get a license. Secondly, the capital required to run such an operation is outstandingly high.

Despite these barriers, Wind Mobile has been rather successful, taking about 2.5 per cent of the Canadian market in the past four years. However, due to unfair rules they have struggled to become true competitors. That's where Verizon comes in. An American giant, Verizon has saturated its markets and is looking for a place to expand. Verizon has massive access to capital and therefore only really needs to get past the CRTC in order to become a true competitor in the Canadian market.

If Bell was scared in 2008 with Wind attempting to join the market, this is the nightmare. The fear does not come across explicitly: the tone of the open letter is one of stirring up nationalist sentiments against encroachment from a foreign company. Bell is counting on Canadians being outraged at American money changing hands and that the public will view Bell as the little guy, which is a rather absurd proposition.

I'm not overly excited about another large multinational conglomerate coming to the market in order to increase competition. For that reason, I'd like to see something more democratic and sustainable. My hope is that Canadians could explore the feasibility of arranging a co-operative to meet the needs of wireless consumers. In the past Wireless Nomad was an internet provider arranged as a for-profit co-op and currently the Eastern Ontario co-operative Mornington Communications Ltd offers phone service. These are small companies, but are examples of the drive that Canadians have for more transparency, fairness, and sustainability in wireless communications.

I hope for more competition, but I know that meaningful changes to the market can only occur when Canadians have real options that are affordable and democratic. I support Verizon's ambitions, but I can't help but think that a co-operative is the right way to go.

Friday, 12 July 2013

Québec and the Tar Sands

Recently a train derailed in the small village of Lac Mégantic in the Eastern Townships of Québec, devastating for the local community. The details are astonishing and I'd encourage you to have a look at as many sources as possible. While it has brought to the fore some rather predictable responses, the tragedy rests precariously on some important political and economic fault lines.

Blame is currently going around, with various groups pointing to different actors and criticising their actions. Aid relief from the federal government has allegedly been slow; the provincial government has been accused of using this event as a political firestarter; firefighters, engineers, and supervisors are the subject of investigation, the role of the rail company is being scrutinised, and the regulatory systems that govern rail transportation are under attack.

Seemingly, these are all important pieces of the puzzle, and will ultimately determine the trigger for the crash as well as its larger causes. However, there seems to be minimal attention to the reason why an event like this is even taking place, and it is rather unsurprising taken in the context of larger Canadian political and economic issues.

The oil sector in Canada is a major cause of the problem. The transportation of oil by rail has increased 280 times in the past five years. While the Tar Sands are seen as a vast fountain of wealth for Canada, they are useless on their own. Oil extracted from the Tar Sands needs to be properly processed, and it is for precisely this reason that the governments of Alberta and Canada have worked so tirelessly to establish new pipeline deals. Crude oil would then be sent either to China (via the Northern Gateway Pipeline) or to the United States (via the Keystone XL Pipeline) in order to be processed.

However, there has been an incredible outpouring of support for groups that oppose these projects, namely because they oppose the Tar Sands. Where in years past people demanded that the Tar Sands be closed, the rallying cries now are that pipeline projects be stopped in their tracks. They have become significant public relations controversies given the high risks and costs, though all the while production has steadily increased in the Tar Sands. An increasing amount of oil has been sent by rail to processing plants in New Brunswick. In order to get there, oil is sent through prime agricultural land and densely populated regions of central and eastern Canada. Places like Lac Mégantic.

The Tar Sands have a massive effect on the Canadian economy, leading various governments to make decisions about fiscal issues such as taxes and services. Domestic policy in Canada is quite strikingly predicated on the Tar Sands. Decisions about whether or not scientists should be able to criticise the oil industry or whether corporations are to be held accountable and transparent are part of the grip that the Tar Sands has on Canadian society. Now rail transportation can be added to the equation.

What's perhaps most interesting is the fact that the Tar Sands were a significant part of the NDP's attack on the government after Mulcair was selected as the new leader. Mulcair argued that Canada, by virtue of having invested so heavily in the Tar Sands, had forsaken the rest of the Canadian economy. This rationale picked up serious momentum until it was pointed out that Quebec, which is the base for the NDP's support, was reliant on transfer payments from the Tar Sands.

The cries of Dutch Disease fell silent, but sadly the money that is pumped into governments across Canada from dirty oil have started people to ask a new question. Is it worth it? While financially Canada may seem to need the oil sands, the idea of externalised costs is striking. Concerns about who will pay for the rebuilding of the levelled village, how victims will be compensated, how the oil will be cleaned up, and what happens to the drinking water are now the dominant concerns of people who, for the first times in their lives, have been meaningfully affected by the Tar Sands.

It's a long distance from the advertisements that the Canadian Association of Petroleum Producers have created, espousing the wondrous economic and social benefit of the Tar Sands for Québec. Presumably time will tell and people will hopefully not vote with their wallets on this pressing question for the future of Canada.

Sunday, 7 July 2013

The Situation in Syria

My first post on this blog was in May of 2011, merely two months after the conflict in Syria first emerged. Despite my intense interest in the Middle East, I've shied away from commenting on it because I haven't felt that I've been able to put my thoughts into some type of coherent post. Given the rise in media attention over the past month, I thought I'd offer some brief insight.

My suspicion is that the logical starting place is around the nomenclature. It's been termed a civil war, genocide, revolution, conflict, insurgency, uprising, and numerous other labels. But what is it? To some degree it's a matter of perspective, but perhaps more importantly it's a question of not being able to characterise a movement as any one particular thing. In my opinion, it's numerous different things simultaneously, which is why I am attempting to refer to it as a conflict in order to remain rather vague about it. To frame this more historically, people are still debating whether or not the American Revolution was in fact a revolution or whether it was merely a war of independence. Historical events and processes are complicated and take on numerous labels at once.

The origins of the conflict in Syria are connected to the broader Arab Spring movement of 2011. Much unlike the other countries involved, the events in Syria were not short-lived. While other movements ended (Libya), and others have met with intermittent success (Egypt), Syria is alone in sustaining the climate of revolution and open combat. It's most certainly the most complicated of all the Arab Spring movements, and I'd argue that it's definitely the most misunderstood.

At a domestic level, the situation is difficult for Westerners to understand because the lines are not clearly drawn. While it is rather obvious who represents formal power, the enemies of the state are numerous. Some are self-fashioned Islamist groups while others are claim to be liberal secular moderates. There have been numerous attempts to unite enemies of Bashar al-Assad under a coalition, but these have failed because there are significant disagreements about what a post-Assad nation should look like.

This gets overwhelmingly complicated when the international context is added. Many of the groups fighting in Syria have received support from outside powers, while others have been labelled "terrorist organisations" by Washington and others. This has stopped countries, particularly France, Britain, and the United States, from making commitments to more participation. It is unclear how to intervene without picking allies carefully. The United States and other NATO allies have been burned badly in Iran, Afghanistan, and Libya over the past decade and are naturally hesitant to participate in another highly charged situation. From Russia's perspective, Syria has been an ally and, while Assad may not be the most likeable character, he is a safer bet that a radical pro-Western Islamic state. It's only been in the past few weeks that Moscow has changed its tone regarding Syria, though this has yet to materialise on the ground.

The fact of the matter is that the average citizens of Syria are left to deal with numerous factions fighting one another. The destruction is incomprehensible, with cities virtually destroyed, crops burned, and the innocent subjected to atrocities by all sides. The road toward a solution is complicated at best, since at this point numerous factions have been fighting for over two years. Every side has invested heavily in trying to create a Syria that is synonymous with their aspirations and values, often directly at odds with those of their enemies. It's unlikely that Syria will be at peace in the near future, and when that time does come, resentment will find other ways of manifesting itself.