Regulator Could Impose New Wholesale Rules, Impacting Wireless Roaming Rates

GATINEAU, Que. — Canada's telecom regulator will issue a decision today that could affect the fees charged to consumers when they roam with their wireless devices outside of their home network areas.

 

The ruling from the Canadian Radio-television and Telecommunications Commission comes seven months after hearings were launched into the health of the country's wholesale wireless market, considered the backbone of Canada's mobile services sector.

 

Budget measures adopted by the Harper government last year set a cap on wholesale roaming costs — the rates that mobile carriers charge their competitors to use their wireless infrastructure — at no more than what carriers charge their retail customers.

 

The government-imposed cap was intended as a temporary measure that the CRTC could choose to keep, kill or amend. But CRTC chairman Jean-Pierre Blais has noted that the government did not take regional differences into account in its legislation.

 

The CRTC heard that the wholesale rate caps were actually hurting smaller players, and thereby stifling competition, particularly where the major service providers had no firm foothold.

 

Regional carriers asked the CRTC to “fine tune” wholesale rates to ensure they aren't forced to offer Telus Corp. (TSX:T), Rogers Communications Inc. (TSX:RCI.B), and BCE Inc. (TSX:BCE) use of their networks at a discount.

 

The Competition Bureau also called for new wholesale roaming regulations, arguing that rate caps alone will not foster greater competition.

 

The bureau predicted during the fall hearings that expanded mobile wireless penetration in Canada could drive down retail wireless prices by about two per cent.

 

But Rogers, BCE and Telus maintained that further regulation would hinder their ability to invest in improvements to their own wireless networks.

 

Montreal-based Cogeco Cable Inc. (TSX:CCA), which is hoping to offer wireless services without building its own cell tower network, asked the CRTC to adopt new rules to allow for the creation of what are known as mobile virtual networks (MVNOs), which would effectively give smaller carriers access to large players' spectrum and cell towers.

 

Cogeco warned that, without regulations, the big players will continue to muscle smaller competitors out of existence.