National Post (National Edition)
CRTC to dictate wholesale wireless roaming rates.
Limit to what Big Three can charge small carriers
GATINEAU, QUE./ TORONTO• Canada’s telecommunications watchdog is regulating the wholesale roaming rates the Big Three providers can charge smaller carriers — a move it says is designed to keep a lid on costs and improve services and competition across the country.
In a highly anticipated decision, the Canadian Radiotelevision and Telecommunications Commission on Tuesday ruled that Bell Mobility, Rogers Communications Inc. and Telus Corp. must file their final wholesale rate structures by Nov. 4.
Those rates, however, will be retroactive to Tuesday and will be part of a new five-year fee structure to be announced by the CRTC next year. Companies that have higher rates than the level to be set the regulator will be required to make up the cost difference. Also as of Tuesday, the CRTC called for the federal government’s interim cap on retail rates to be set aside.
“The measures we are putting in place at the wholesale level will result in a more competitive retail market — a market in which Canadian can choose from a wide-range of innovative wireless services offered a reasonable prices,” CRTC chairman Jean-Pierre Blais told reporters following the decision.
“What’s more, they can use this market power to hold back competition. They have the ability and the incentive to maintain rates and impose terms and conditions that would not be sustainable in a competitive market.”
The future of wholesale roaming in Canada has been a divisive issue for some time.
Newer entrants such as Quebecor Inc. and Wind Mobile Corp. depend on cheap and easy access to another company’s infrastructure outside of the area their wireless network currently covers.
During the CRTC’s five-day hearing on the matter last fall, these companies claimed that these roaming arrangements have been long-structured in a way that unfairly reduced their profit margins and inhibited their expansion plans. The effects are so adverse, they said, that regulation was required.
A spokesman for Quebecor said the company “will look closely at the decisions implied” but will make no comment for now. Rogers said the company is reviewing the decision.
Requests for comment from BCE were not immediately returned. Mobilicity and Telus declined to comment. Wind Mobile said the decision “will lead to better, stronger competition for Canadian consumers.”
Incumbents Telus, Rogers and BCE have argued that
commercial rates of this sort should be left to commercial negotiations. The trio has issued warnings about how the wireless technology that connects Canada will deteriorate if operators have more incentive to lease facilities and defer capital investments rather than build, deploy and
operate their own.
The federal government legislated an interim cap last June on how much carriers can charge their domestic rivals to use their network for voice, text messaging and data services. At the time, the price couldn’t exceed the average retail rate per unit. Still, the new entrants said these amounts were still too stiff because those retail prices included things like
handset subsidies and marketing budgets — things that officials at Wind and Quebecor said they shouldn’t have to pay for. Today, the CRTC recommended to the Governor in Council that it “repeal this section of the legislation to allow the return to market forces … as soon as possible.”
In July, the CRTC found “clear instances of unjust discrimination” in the way Rogers structured roaming contracts with other operators, prompting the country’s telecom regulator to ban exclusivity provisions in wholesale roaming contracts.
But Tuesday’s announcement, while in the right direction for consumers, was short on details, said John Lawford,
the executive director of Ottawa-based consumer group the Public Interest Advocacy Centre.
“What was mandated today may not be low enough, but we look forward to the fall,” Lawford said in an interview. “It’s probably going to be cheaper but we don’t know by how much than even the legislation says. We sort of have to take Jean-Pierre Blais’s word for it.”
Quebecor chief executive Pierre Dion has teased that the Montreal-based company has been “ready, willing and able” to expand beyond its home turf of Quebec for almost a year “under the right conditions,” which he has said include a federally regulated wholesale roaming policy. In addition to what it calls a price gauge, Quebecor argued that its subscribers who have roamed while in Canada in the past have dealt with sub-par service and dropped calls as they jumped from the home network to the another carrier’s.
Both the CRTC and the federal government have been focusing their efforts on the Big Three to set market-wide standards for rates and services. The CRTC said Tuesday it is also aiming to reduce market barriers by reducing some restrictions in wholesale roaming agreement.
What was mandated today may not be low enough, but we look forward