NEWS

Cellphone roaming rates to be examined at CRTC hearing

09/29/2014 08:48 EDT | Updated 11/29/2014 05:59 EST
Canada's telecom regulator is looking into the rates cellphone companies charge each other to use their networks — a key consideration that indirectly sets how much consumers pay in travel phone usage.

On the heels of a major discussion about what the future of television in Canada will look like, the Canadian Radio-television and Telecommunications Commission (CRTC) will begin a hearing Monday in Gatineau, Que., that looks into, among other things, wholesale roaming rates. Those are the fees that rival cellphone carriers charge other wireless companies when their customers travel outside their home networks and on to others.

Although not directly paid by consumers, they set the trend of how much cell users pay to use their phones to talk while away from home.

The three largest players — Rogers, Telus and Bell — control more than 90 per cent of Canada's wireless market and generally charge each other a relative pittance to piggyback temporarily on each other's networks because each has large, geographically spread out coverage maps.

But wholesale roaming fees are a constant thorn in the side of new wireless companies like Wind, Eastlink, MTS, Quebecor and Mobilicity, because they rely on piggybacking on the large carrier's networks for service. They have typically been charged far more than the incumbents for that service, which raises prices for consumers.

Current rates 'discriminatory'

Quebecor Inc., which bought off chunks of wireless spectrum across the country recently with a view towards rolling out national coverage, has singled out roaming rates as a key stumbling block in whether it moves forward with that plan.

In July, the CRTC said Rogers was putting unfair clauses into its roaming agreements with Wind Mobile. An exclusivity agreement that didn't let Wind strike agreements with other carriers, coupled with charging Wind significantly more to use Rogers' network than the latter was charging to U.S. carriers (or the other big two Canadian ones) was unfair and discriminatory, the commission said in a ruling.

When that deal was torn up, Wind managed to negotiate a better deal for itself. The company quickly turned and passed that down the line, slashing the rates it charges its customers for roaming services by as much as 95 per cent.

Wind, along with representatives of the Competition Bureau, are scheduled to appear at the hearings as early as Monday.

This summer the regulator said cell carriers aren't allowed to charge other companies less that what they charge their own consumers. But it's possible that the outcome of the hearings will take that a step further and implement a hard cap on rates that's even lower still.

"We believe it is possible, but hard to predict, that the government could step in and mandate even further reductions in domestic roaming rates before the CRTC completes its review," TD telecom analyst Vince Valentini said in a recent note to clients.

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