Roaming arrangements like Survivor alliances, consultant tells CRTC

Comments made to the CRTC as part of its review of domestic roaming rates paint a picture of different alliances made among Canadian wireless carriers — reminiscent of the TV show Survivor — with difficult circumstances facing those who find themselves on the outside of these relationships. In a submission to the CRTC, also shared with The Wire Report, Wind Mobile’s operating firm Globalive Wireless Management Corp. talked about “a large differential” in the roaming rates Rogers Communications Inc. charges Wind, in comparison to what Quebecor Inc.’s Videotron unit pays. Globalive said “the wholesale roaming rates that Rogers Wireless Partnership (“Rogers”) currently charges WIND unjustly discriminate against WIND and subject it to an undue or unreasonable disadvantage,” adding that “current negotiations with Rogers, Bell Mobility Inc. (“Bell”) and TELUS Communications Company (“TELUS”) … raise similar issues under the Act.” The entry was referring to parts of the Telecommunications Act that Globalive said are meant to prevent “unjust discrimination” and “undue preference” in the industry. Globalive said Videotron charges its retail customers an extra five to 15 cents per megabyte in data charges for roaming on Rogers’ network. Wind customers pay an extra $1 per megabyte for domestic roaming with Rogers, Globalive said. While Globalive did not quote wholesale rates, it said these charges at the retail level reflect differences in wholesale prices. “Though WIND does not pass on all such charges, given the significant underlying costs of our subscribers’ roaming on Rogers’ network, WIND has no choice but to pass through certain charges,” it said in its submission. Wind, meanwhile, announced Thursday that its customers can, as of Feb. 3, roam in the United States with unlimited use of data, voice and text services for $15 a month. Globalive’s submission did not indicate that it uses the networks of Telus Corp. or BCE Inc. for domestic roaming, though it said the roaming rates these incumbents charge SaskTel are “significantly lower” than those “offered” to Wind. It said SaskTel customers typically pay two to six cents extra per megabyte for domestic roaming. Globalive asked in its submission that the CRTC regulate domestic roaming rates “to remove the discriminatory, preferential and disadvantageous conduct.” In his submission to the CRTC, Jean-Francois Mezei, a Montreal-based telecom analyst with Vaxination Informatique, drew a parallel between the Canadian wireless sector and the television show Survivor, discussing how favourable roaming arrangements are set up between certain “alliances.” “In a ‘Survivor’ analogy, Vidéotron and have made an alliance with Rogers (and Vaxination suspects Eastlink will too), and Sasktel has made an alliance with Telus/Bell,” Mezei said in the comments, which he shared with The Wire Report. He said the CRTC must “take the initiative to enhance the competitive level by not only giving the remaining smaller players a chance, but also making entry into the relatively small Canadian market attractive to domestic and foreign investors. This requires realistically priced access to existing facilities-based networks.” The comments were submitted to the CRTC as part of a review of domestic roaming agreements between carriers, which was announced in December. CRTC Chair Jean-Pierre Blais said in a release at that time that the commission is “concerned that some wireless companies may be making it unfairly difficult for Canadian providers that do not operate a national network to compete in the marketplace.” The deadline for filing comments to the CRTC as part of this process was Wednesday. Replies to these submissions are due Feb. 10. In its submission, also shared with The Wire Report, Rogers said the roaming rates it charges other carriers “are not unjustly discriminatory and the rates charged to American wireless carriers are not unduly preferential.” It added: “While the rates charged to either Canadian or American wireless carriers are not uniform, there are valid commercial reasons why this is the case. These reasons are supported both by economic principles and commercial realities.” Rogers said a number of things can factor into the different rates different carriers are charged, including whether the relationship is “one-way or reciprocal,” whether the roaming agreement is part of a “broader relationship between the two parties” and also the volume of traffic expected. “The wholesale roaming market in Canada is competitive,” Rogers said in its submission. “Whether or not new entrants could seek roaming from Bell and TELUS five years ago, they can do so now. Rates negotiated in a competitive market are not unduly discriminatory.” In its submission, BCE Inc. denied any “preference or discrimination” in its roaming agreements with other carriers. It said that since Telus Corp.’s acquisition of Public Mobile, it no longer provides roaming services to any of the carriers that entered the wireless market following the 2008 AWS spectrum auction. To the extent that its past arrangement with Public Mobile is relevant, Bell said “these rates were commercially justified by the significantly lower traffic volumes provided for and the fact it was a unilateral, not bi-lateral, roaming agreement.” In a submission shared with The Wire Report, Telus told the CRTC: “A central tenet of Industry Canada’s domestic roaming framework is that the rates, terms and conditions of roaming are set by commercial negotiation. This is the right approach for roaming arrangements because it facilitates new entrants to compete while maintaining the incentives of all parties to build network infrastructure and to utilize scarce spectrum resources to the fullest extent.” Telus said differences in the rates and conditions attached to roaming agreements with different carriers “are not inconsistent with competition.” It added: “Different value propositions explain most, if not all, of the alleged price differentials observed by the CRTC. The differences in value proposition are not the result of market failure and thus do not require regulatory intervention.” Less than a week after the CRTC said it would review domestic roaming rates, Industry Canada announced intentions to introduce legislation that caps the roaming prices carriers charge domestic competitors to no more than what they charge their own retail customers. The department said on Dec. 18 it would be a matter of “weeks” before such legislation is introduced, which would remain in place at least until the CRTC reaches a conclusion in its review of domestic roaming rates. On Wednesday, the Competition Bureau said it told the CRTC in its submission that high roaming rates carriers charge competitors are “likely” having a detrimental effect on the level of competition in Canada’s wireless sector. MTS, which was characterized as being part of the Rogers “alliance” by Mezei, said in its submission to the CRTC, which was also sent to The Wire Report, that it “supports the Commission’s efforts to eliminate any unjust discrimination and undue preference that may exist in the current roaming rates.” MTS also warned that measures the CRTC might take to eliminate anti-competitive practices by national incumbents in the area of domestic roaming might have the “unintended consequence” of hurting regional carriers like MTS. The Manitoba-based carrier noted the “joint use wireless access” arrangement it started with Rogers in 2011, which it said helped MTS “remain competitive, particularly given the high Canadian roaming rates that were being charged to MTS by the National Carriers in other parts of Canada.” — With reporting by Derek Abma at dabma@thewirereport.caand editing by Anja Karadeglija at akarad@thewirereport.ca

Roaming arrangements like Survivor alliances, consultant tells CRTC

News | January 30, 2014

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Roaming arrangements like Survivor alliances, consultant tells CRTC

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