Amendments to the Telecommunications Act Put Cap on Wholesale Roaming Charges

by Istvan Fekete on February 12, 2014

Canada’s incumbents won’t be able to charge wireless startups more than their own customers, the Conservative government has announced as part of the 2014 federal budget.

In an interesting turn of events, Finance Minister Jim Flaherty outlined amendments to the Telecommunications Act and Radiocommunications Act that aim to cap wholesale roaming rates – those the Big Three charge wireless startups – for mobile voice, data, and text services. Furthermore, the government will give more authority to the CRTC and Industry Canada to impose fines and penalties for those who break the new rules.

In other words, the Big Three will be prevented from charging smaller players more than they charge their own customers.

The wholesale roaming rate issue has gained publicity over the past few months since wireless startups began complaining about higher charges. Since then, the CRTC has formed a team that has been looking into the claims, which has found the incumbents charging higher rates than they charge, for example, their US partners.

The problem is that Canada’s biggest players control 85% of the available wireless airwaves, and an unregulated market gave them the advantage of negotiating a price that pushed the competition (smaller players) down.

With the new amendments, the government aims to breathe new life into the wireless sector, which has seen new entrants fail to turn profits, and make the long-promised competition a reality.

Since smaller carriers lack their own infrastructure, in some part of the country they are forced to pay the incumbents to use their cell towers. The Industry Minister said last December that Canada’s largest wireless players charge the wireless startups as much as 10 times the amount they charge their own customers.
This is about to change. The government is moving ahead, while the CRTC continues to monitor the issue. Carriers were asked to submit paperwork (their roaming charges contracts) last month, so we can expect a statement from the regulator in the near future.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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Capping Wholesale Roaming Rates is Just an Interim Step, Study Says —
May 14, 2014 at 6:42 am

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