On February 20, the Canadian Radio-television and Telecommunications Commission (CRTC) announced the launch of a public consultation to examine competiveness in the Canadian wholesale mobile wireless roaming market, with a view to determining whether regulatory intervention is necessary. This follows an earlier fact-finding exercise and consultation investigating whether large wireless providers charge excessive wholesale wireless roaming rates to their smaller Canadian competitors.
To more efficiently service their subscribers in a capital-intensive industry, wireless providers often enter into wholesale arrangements with each other, including roaming arrangements or sharing arrangements for towers, network or spectrum. These deals allow smaller wireless providers to offer a wider range of services over a greater geographic area. Industry Canada mandates such roaming and sharing arrangements through conditions attached to the spectrum licenses of wireless carriers, but does not regulate the pricing of these arrangements.
The CRTC has the authority to regulate the rates charged by Canadian carriers for the provision of telecommunications services; however, pursuant to s. 34(2) of the Telecommunications Act, the Commission must forbear from intervening in mobile wireless pricing if there is sufficient competition in the marketplace to protect the interests of users.
The current consultation is part of the CRTC’s efforts to determine whether the market remains sufficiently competitive to continue to warrant forbearance. The CRTC is seeking comments on Canadian market conditions and trends in wholesale mobile wireless services - such as roaming, and tower and site sharing - and the effect of wholesale trends on competition in the downstream retail wireless market. Respondents are requested to provide evidence of competitive or anticompetitive effects in the wholesale marketplace, as well as their opinion as to whether greater regulation would be beneficial.
Government policy objectives will factor into the CRTC’s analysis. Objectives include those in s. 7 of the Telecommunications Act, encouragement of innovation and investment in telecommunications facilities, fostering pricing competition and broadening the range of services available for Canadians.
The CRTC’s efforts tie in with the government’s latest federal budget, which also mentions concerns over wireless competition (such as those of the Competition Bureau) and indicates plans to strengthen wireless regulation and cap roaming rates (at least until the CRTC further decides this issue). The budget also proposes to extend CRTC enforcement powers by allowing the Commission to impose administrative monetary penalties on companies that violate rules, including those in the Wireless Code.
Wireless carriers and members of the public can submit comments until May 1, 2014. The CRTC will hold a public hearing beginning on September 29, 2014, in Gatineau, Que.