The competitiveness of Canadian wireless services has been the source of an ongoing and contentious debate for years. Last week, Canada’s telecom regulator concluded that there is a competitiveness problem, yet in a decision surprisingly applauded by many groups, declined to use much of its regulatory toolkit to address the problem. Instead, it placed a big bet on the prospect of a smaller wireless carrier somehow emerging as a fourth national player.
My weekly technology law column (Toronto Star version, homepage version) notes that the Canadian Radio-television and Telecommunications Commission began investigating the wholesale wireless services market in 2013. The big three wireless companies – Bell, Rogers, and Telus – argued that the market was competitive and that no regulatory action was needed. By contrast, new entrants such as Wind Mobile called for regulated roaming rates so that they could offer viable national services with more affordable connectivity wherever their customers roam.
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The CRTC released it much anticipated decision on the wholesale wireless industry yesterday, painting the decision as fostering “sustainable competition, innovation and investment in the wireless services market.” The ruling generated supportive comments from consumer groups, community groups, new entrants such as Wind Mobile, and business analysts who thought that the CRTC might go further. The regulated wholesale roaming rates has attracted the lion share of attention, but the bigger story is what the Commission did not do. Indeed, given the CRTC’s finding on the competitiveness of the Canadian wireless industry, it should have done more to address the issue. Instead, it adopted a regulatory approach that suggests it thinks it knows the right formula for more competition and it has placed its bet primarily on a fourth national wireless player rather than on an environment that facilitates as much new competition as the market can support.
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Industry Minister James Moore yesterday took another step toward improving the state of wireless competition in Canada by announcing plans to cap wholesale domestic roaming fees at the same rates the companies charge their own customers. The cost of domestic roaming has been a persistent concern for new entrants and regional wireless carriers, who argue that the national carriers increase wholesale prices for roaming that render the smaller players less competitive. The new government reforms will put an end to those concerns. Moreover, it plans to create tough new penalties for companies that violate the wireless code or other regulatory requirements, a move that may increase compliance rates.
While the usual critics will moan that the latest changes are indicative of a wireless policy with ever-changing rules, the reality is that the government has made a clear commitment toward addressing the state of wireless competition in Canada. Some of its hopes may have been thwarted – the entry of Verizon tops that list – but identifying and addressing competitive barriers should be a continuing process with regular reforms as needs arise.
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