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, 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.”
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 email@example.com or online at www.michaelgeist.ca.