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Regulated Wireless Roaming Fees May Be on the Way

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Tuesday September 10, 2013
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 publicly available.

Based solely on the readily accessible information, however, my weekly technology law column (Toronto Star version, homepage version) notes that 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 photographs.

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."
Comments (9)add comment

Andrew said:

Roaming packages available
This posting is not to, in any way, excuse the outrageous gouging of their customers by Canadian mobile phone companies.

That disclaimed, I am with Virgin Mobile, which is associated somehow with Bell (i.e., ymmv) and was able to get, by Canadian standards, a fairly reasonable roaming package when I was traveling in the US earlier this year. For a month's worth of access, the cost was about $40 on top of my regular bill. Still very high but, as noted above, very reasonable as compared against the no-plan roaming charges.

I can't remember the caps, although I recall they weren't terribly high. I exercised moderate discretion in my phone use but didn't go out of my way to avoid it. Over the course of about a week and a half, I didn't exceed the cap.
September 10, 2013

Anonymous - the "real" Anonymous said:

What has happened here?
The Internet Society has called the US government's surveillance and decryption regime "a fundamental threat to the Internet's economic, innovative, and social potential."

And the Internet Engineering Task Force is setting aside its next neeting in Vancouver to re-write the way the Internet runs to "save it from the US government", and all that you can ever read about here is that "the Internet costs too much money..."

Is it any wonder that CIRA's Internet forum, open for this week only, where we can shape whether US-style domain seizures are brought to the dot-ca domain, among things such as peering and enchange points, and yet there is not a soul there, zero, not one comment!

You used to be better than this, Mr. Geist. What happened? Did you get a National Security Letter from the FBI, too? You know, they can't really do anything to you.
Please, please Sir, start to do your job.
September 10, 2013

Brian said:

Why not deal with things that affect ALL Canadian mobile users first?
OK. So roaming is a big fat bend-over-and-take-it gouge, no doubt about that. But how many Canadians does it really affect on a day-to-day basis?

Not nearly as many as the plain high-priced-gouging that just having a mobile plan does. You are hard pressed to get a voice+text+data plan for less than about $70/mo. That's simply outrageous!

And then there is the double-dipping that constitutes that high cost. That $70/mo. is typically split between data and voice. Let's say for argument's sake that it's $35 for each.

OK. So I don't want voice. I don't talk on the phone. I don't want people phoning me. If voice is $35/mo. and data is $35/mo. just give me the data and no voice, right? Nope. You can't get data-only without first paying for the voice bend-over-and-take-it.

What's criminal about that is that voice and data are (or should be) both the same thing, charged for twice. It's all (or should be) one data network with the voice being transmitted in what are actually data packets. So why am I paying for that twice?

The CRTC needs to switch it's focus from issues that affect only a few Canadians for relatively short periods of time to issues that affect all Canadians all of the time and reign in the gouging that is plain domestic mobile billing.
September 10, 2013

jason said:

I just don't use my phone.....
anywhere other than BC. I have roaming for data turned off for my account, and I turn my phone off when I go through the border to make sure I don't accidentally use it. I leave it at home if I am travelling out of the country.

How sad is it when consumers must protect themselves from their service provider by disabling aspects of the service provided?
September 10, 2013

mike said:

Please regulate
PLEASE REGULATE! Planning for our visit to the States we bought the Telus Travel Pass 40 for $40. The included 25MB of data that lasted 2 days. As we were there for 2 weeks, I purchased a ATT sim for $40 and their included data of 250MB was more than enough for the trip.

I will never buy a roaming plan again and I wish I could ditch Telus (Rogers is just as bad).

Musing - I think the whole industry should be unbundled just like was done for electricity with towers and roaming regulated. Keep the competition on the handsets and service.
September 10, 2013

Cynic said:

...
Perhaps our new Industry Minister could explain how his strategy of deeper and deeper meddling in the markets is going to encourage foreign carriers to invest in Canada? It's no surprise at all the Verizon turned up their nose at Canada and walked away.

@Mike, Be careful what you wish for. The unbundling of the electric utilities hasn't been any better for consumers at all. In fact, the myriad of indecipherable fees and rate-rider adjustments on my electricity bill make my cell phone bill look simple by comparison. If we use the electricity industry as a model for cell phones we could see everyone paying a fixed monthly service delivery charge based on their highest momentary usage for the entire year. The electric wire service providers argue that they have to build their network to deliver for peak periods so consumers have to pay for that peak demand even when consumption is zero.

September 10, 2013

Eric L. said:

RE: Cynic
"Perhaps our new Industry Minister could explain how his strategy of deeper and deeper meddling in the markets is going to encourage foreign carriers to invest in Canada? It's no surprise at all the Verizon turned up their nose at Canada and walked away. "

Indeed, this meddling is weaksause. As I've said before, the best meddling the conservatives can do, at least as a first step, is to divest the media assets from Bell, Rogers, etc. Of course, the Conservatives aren't likely to do anything like this as the propositions they put forward have been consistently weaksause.
September 11, 2013

chris said:

insane fees
I just travelled to the US and am on Bell. As soon as I turned my phone on, AT&T "welcomed" me and advised that it cost $1.50/ min for a call ; $0.75 PER text and $6 PER megabyte.

A warm and fuzzy welcome indeed. Europe s getting rid of roaming fees and I say it is high time we followed suit there and also to use only a single adapter (micro usb).

If Europe can do it, which consists of many countries, why can't North America??
September 14, 2013

Cynic said:

...
People seem to forget that Canadian carriers eliminated roaming fees across an area bigger than the EU more than 15 years ago. I can only imagine how delighted the Europeans are going to be when they finally get a roaming fee free zone as large as the one we have in Canada. I expect they will also be delighted when they get 4G, but that looks like it will be an illusive goal since most of their telcos are almost broke and aren't able to invest in network upgrades right now
September 17, 2013

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