Appeared in the Toronto Star on September 7, 2013 as Regulated Wireless Roaming Fees on the Way
The Labour Day weekend ended with a bang for telecom watchers as
Verizon, the U.S. giant that was contemplating entering the Canadian
market, announced that it was no longer interested in moving north. That
decision represents a major loss for consumers, who would have
benefited from greater choice and increased competition.
Yet days before the Verizon change of heart, the Canadian
Radio-television and Telecommunications Commission released its own
noteworthy announcement, issuing a request for information to all
Canadian wireless companies on their roaming pricing. The request, which
covers everything from roaming agreements with U.S. companies to
roaming revenues and consumer costs, may be the start of a long-overdue
effort to reign in Canadian roaming fees that the OECD has reported are
amongst the highest in the world.
The Commission acknowledged mounting concern over roaming fees, which
kick in whenever Canadians use their wireless devices outside the
country (and occasionally within the country when a provider does not
offer their own service). After attempts to gather data from publicly
available information failed to provide a clear picture, the CRTC
initiated the request for information, much of which has never been made
Based solely on the readily accessible information, however, roaming
fees render typical usage of cellphones when out of the country
unaffordable for most Canadians. Consider an average family of four that
travels to the U.S. for a long weekend. Each person travels with their
cellphone, but limits their use to a few calls, checking email, and some
text messages to co-ordinate plans. The parents spend only 20 minutes
per day talking on their devices, the kids are limited to 10 minutes,
and everyone sends ten texts per day. The family avoids bandwidth
intensive activities such as streaming video or uploading multiple
The total cost for such modest usage? On Rogers, the hour of total talk
time costs $87 per day, checking emails costs $31.96 per day, and the 40
texts adds another $30 to the bill. With a daily cost of $148.96, the
three-day weekend total roaming cost runs to $446.88 plus taxes.
The situation is even worse with Bell and Telus, who both charge more
for data usage. Assuming the emails used 10 MB per day per person (a
very modest figure), Bell's pricing of $6 per MB (Telus charges $5 per
MB) would add over $200 per day to the family's cost, bringing the
weekend cost to over $1000.
By comparison, Vodafone Australia recently unveiled a daily cap for its
customers that roam in the U.S. The plan gives subscribers the same
voice, text, and data usage as their domestic plans for only AU$5 per
day (the same offer applies to travel in the UK and New Zealand).
Many other countries have already taken action against the gouging that
appears to occur on roaming fees. In fact, costs in the European Union
have dropped by 91 per cent over the past six years in response to
regulatory initiatives that have capped roaming fees in Europe.
Canadian providers have been anticipating a regulatory response to high
roaming fees. Earlier this summer, a Rogers executive told telecom
analysts that "the roaming initiatives, which frankly we think are
imperative in the long run to kind of get roaming in line, or I think we
will see the same kinds of things that we've seen in other parts of the
world where it becomes high on the regulatory agenda."
Rogers has already taken some steps to drop roaming pricing, resulting
in tens of millions of dollars in reduced revenues. Yet those reductions
still yield in the pricing described above. With costs still high by
international standards and a lack of competition an ongoing concern,
regulated roaming pricing is overdue and an important step in meeting
the government's goal of "more choice, lower prices, better service."
Michael Geist holds the Canada Research Chair in Internet and
E-commerce Law at the University of Ottawa, Faculty of Law. He can
reached at firstname.lastname@example.org or online at www.michaelgeist.ca.
TagsShareMonday September 09, 2013