Québecor’s wireless play raises stakes for CRTC
Oneof the hottest issues in the wireless space today is what’s known as wholesale roaming rates — prices charged by one company to another for access to its network.
Last week, Québecor CEO Pierre Dion announced his company is “ready, willing and able” to make the investment to become Canada’s fourth wireless player, a potentially industry-altering move. But Dion made his offer conditional: In order for the Montreal-based communications giant to open its wallet, the government needs to lower roaming rates.
The man who may ultimately sign off on new roaming-rate rules is Jean-Pierre Blais, chairman of the Canadian Radio-television and Telecommunications Commission — the industry regulator.
The CRTC recently launched a review of the issue and, depending on the result, could announce new rules early next year, Blais said in an interview Thursday.
He made it clear the CRTC has no interest in waging a one-sided campaign for lower consumer prices. Rather, the regulator wants a “balance” that works for both sides.
While smaller players might prefer lower prices, the needs of the industry as a whole must be taken into account, and there is the potential that if rates come under pressure, investors might back away from the sector — potentially starving it of funding necessary to maintain infrastructure, Blais said.
Similarly, an excessive number of competitors in wireless can also hurt the industry, pushing down prices and reducing profits for everyone.
“There is a risk if you (have too many) competitors with a focus just on the retail price, you forget about the larger consumer experience,” he said, adding that having “too many competitors and unnaturally low prices could also mean that people aren’t investing appropriately in their networks, and therefore it may be a short gain for a long-term pain.”
While everyone agrees that roaming rates are an issue, where opinions diverge is how to resolve the situation.
Newcomers to the sector argue excessive prices charged by companies like BCE, Rogers and Telus are a major barrier, limiting their ability to grow. The incumbents argue prices are fair because they take into account the often substantial costs involved in building their networks.
But in the court of public opinion, high prices and big companies rarely win favour — and that’s not lost on the government.
Though he declined to discuss the direction the CRTC is taking, Blais said some of the facts support the argument rates charged by the major players are excessive.