Rogers wins battle with Ice Wireless over roaming access to network

CRTC confirms incidental use, not permanent

TORONTO • Canada’s telecom regulator quashed an attempt by Northern wireless carrier Ice Wireless Inc. to let customers of its affiliate network Sugar Mobile permanently roam on Rogers Communications Inc.’s network.

In two decisions released Wednesday that reaffirm federal preference for wireless carriers that own their own networks, the Canadian Radio-television and Telecommunications Commission determined Ice Wireless “improperly” allowed Sugar users permanent, not incidental, access to Rogers’ network.

If Ice Wireless doesn’t stop Sugar Mobile customers from using Rogers’ network within 50 days, the CRTC granted Rogers permission to kick off all Ice Wireless customers from roaming on its network.

The standoff between Ice Wireless and Rogers began when Sugar launched in early 2016. Sugar, which offers wireless services starting at $19 per month through a combination of Wi-Fi and cellular networks, described itself as a mobile virtual network operator that used Ice’s network as a home network.

Ice Wireless, which owns network facilities in the three territories and Quebec, already had a contract with Rogers that lets its customers roam on the wireless giant’s cellular network when travelling, for example, from Yellowknife to Toronto. The Big Three carriers Rogers, Telus and Bell are mandated to provide wholesale roaming services to other wireless carriers so customers have seamless service outside their home networks.

But Rogers was chagrined to learn that Ice also let Sugar Mobile customers — who were not necessarily based in the North — roam on its network. It told Ice it would terminate their roaming agreement unless it stopped Sugar customers from using the network.

Ice asked the CRTC for relief and received it on an interim basis. It argued Sugar users only used Rogers’ network on an incidental basis since most Sugar service is provided over Wi-Fi. Ice noted that Sugar customers still rely on Ice Wireless’ backbone network regardless of their physical location.

Rogers countered that WiFi isn’t a part of the cellular framework and shouldn’t be considered a home network. The CRTC agreed. The regulator noted that Sugar marketed its services to customers across the country and there was no indication these customers were required to use the Ice home network at all. It also wasn’t satisfied that Sugar customers relied on Ice’s backbone network.

The final wholesale rules — also released Wednesday — confirm that wholesale roaming must provide incidental, not permanent, access to an incumbent’s network. This prevents mobile virtual network operators from proliferating in Canada even though it’s a common business model around the world. Incumbents argue that such operators deter investment in physical infrastructure by eating away at their margins.

RBC analyst Drew McReynolds called the decision neutral for wireless operators, stating the terms “are consistent with current regulatory policy that largely protects existing wireless operators from non-facilities-based competition.”

The CRTC will give Ice until the end of the month to confirm Sugar will stop its unauthorized use of the Rogers network, explain how Sugar will comply with its decision and inform its customers of any changes, and prove that Rogers finds Sugar’s new direction acceptable. If it fails to do so, Rogers can stop providing roaming services to Ice Wireless altogether on May 1.

Samer Bishay, CEO of both Sugar and Ice and their parent company Iristel, said the decision is a blow to competition that will affect 5,500 customers who use the “innovative service that’s made in Canada.”

“I’m very disappointed, not only for our company but for all the Canadians that are paying some of the highest wireless rates in the world,” Bishay said.

“It just seems that something that is fundamental is being missed. It’s almost like getting a death penalty without seeing a judge,” he said.

Customers will continue to have service while Sugar weighs its options. It is deciding whether to appeal or comply with the decision, or pursue a different model altogether, Bishay said.

In an emailed statement, Dave Watt, Rogers’ senior vice-president of regulatory affairs, said he’s pleased the CRTC “made the right call.”

“We believe in innovation and a fair, competitive market — this was about violating a roaming agreement, plain and simple,” Watt said.

But the feud between Rogers and Ice Wireless affiliates isn’t over. In December, Rogers accused Iristel of gaming the system with a practice called traffic pumping. The CRTC has yet to weigh in.