The inability to easily switch between wireless providers – a process known as number portability – has long been a source of frustration for Canadian consumers. Many feel "locked in" to a single provider given the inconvenience of changing mobile phone numbers. As a result, Canadian wireless providers are able expend great effort in acquiring customers, yet do precious little for the ones they already have, secure in the knowledge that most are not going anywhere.
The federal government surprised the wireless industry earlier this year when it used the budget to ask the CRTC to "move expeditiously to implement wireless number portability." Last month, the Canadian Wireless Telecommunications Association unveiled its plan to institute the government’s request for number portability by suggesting that it would take at least two years to implement such a system in Canada.
The CWTA plan set in motion a new round of rapid regulatory consultations from the Canadian Radio-television and Telecommunications Commission. With signals that the federal government was understandably disappointed with the industry’ s plan, the CRTC launched a public consultation – initial comments were due last week with the deadline for follow-up comments set for next Monday.
While the industry regularly touts the Canadian wireless environment as a highly competitive, world-class market, the truth is that Canada trails badly on the number portability issue. The United States implemented both wireless and wireline portability in 2003, starting with its 100 largest cities and following soon after with the rest of the country.
Similar moves are underway worldwide. In Europe, Denmark is working on a joint wireline and wireless portability plan, while most other European Union nations established at least wireless portability several years ago. The situation is much the same in Asia-Pacific with wireless portability implemented in many countries including Australia, Hong Kong, South Korea, and Singapore (Singapore put wireless portability into place eight years ago).
The establishment of both wireless and wireline portability in the Canadian market is clearly long overdue. Unfortunately, the CWTA plan rejects the government’s call for expeditious implementation by relying on a variety of unnecessary delays.
For example, unlike the U.S. implementation, which adopted a phased-in approach that emphasized urban areas, the Canadian plan envisions number portability only after the entire Canadian market is ready. Given that 80 percent of the Canadian population lives in urban areas, it seems likely that the vast majority of Canadians could have access to number portability in a matter of months with the appropriate regulatory emphasis on urban areas.
Moreover, the CWTA plan envisions roughly one year of technical upgrades, followed by an additional year of testing, marketing and promotion to prepare consumers for this new service. Canadian consumers have been waiting years for number portability – it is doubtful that they need to wait another eleven months after the infrastructure has been put in place to become fully informed. Canadian wireless providers are major corporations that should be able to easily establish parallel tracks that implement technological upgrades and inform their customers of their new portability rights simultaneously.
Rather than embracing the potential for a more competitive market, the CWTA’s plan sends the message that greater wireless competition is to be avoided. In fact, several years ago, Rogers CEO Ted Rogers admitted as much, noting that "in the long run, purely price-driven competition harms consumers; providers suffer and pioneering and innovation suffer, robbing our country of productivity gains, resulting in a lower standard of living."
In contrast, Industry Canada’ s position is that the spectrum used by Canadian wireless carriers "is a natural resource managed for the benefit of all Canadians" requiring policies that promote a "fair, efficient, and competitive marketplace."
The limited competition in the Canadian market has left many consumers looking for new alternatives. While upstarts such as Virgin Mobile threaten to take market share from the established providers, inadequate competition may ultimately lead to a grey market in wireless service.
For example, Canadians seeking a North America-wide calling plan can sign on for Rogers Wireless’ Digital One Rate plan, which offers 400 minutes of calling per month with no roaming or long distance fees for C$110 plus service fees. Other carriers, including Bell and Telus, offer comparable plans.
Alternatively, consumers may instead look south of the border, where Verizon also offers a North America-wide plan that includes 450 peak minutes along with more than 1,000 weekend and night-time minutes with no roaming or long distance fees. The Verizon plan only costs US$59.99 (roughly C$70), providing consumers with a better plan at a fraction of the cost. With thousands of Canadians already subscribing to U.S. satellite radio services, a wireless grey market does not appear to be far behind.
Ottawa’s call for expeditious implementation of number portability should be welcomed. It must now be matched by an aggressive CRTC approach, one that rejects the CWTA’ s meandering and demands that Canadian carriers begin marketing number portability immediately with phased rollouts to commence early next year. It is time for Canada’ s wireless providers to put the needs of their consumers first by quickly implementing the long-awaited number portability.
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.