Carriers ask CRTC to take powers from government

GATINEAU, Que. — Two of Canada's largest wireless carriers called on the CRTC to take some regulatory power from Industry Canada at the commission's week-long hearing into the wholesale wireless market. Both Rogers Communications Inc. and BCE Inc. want to change the balance of regulation in the wireless business, asking the CRTC to take over the arbitrator role currently filled by Industry Canada in disputes between companies. On Wednesday Rogers said the commission should take that role on tower sharing, while on Thursday Bell said the CRTC was their regulator of choice for tower sharing and domestic roaming. "The commission, rather than Industry Canada's commercial arbitrators, should resolve commercial disputes," said Bell chief legal officer Mirko Bibic. "This change would make the process less expensive and less time consuming." A day earlier, Rogers chief regulatory officer Ken Engelhart said the CRTC was a "a less expensive, kinder, gentler arbitrator than what's out there." Both the CRTC and Industry Canada have regulatory power over the wireless market. The CRTC, an arms-length agency, has been studying the wholesale wireless market for more than a year, while in June the government passed Bill C-31, which capped the wholesale rates carriers can charge one another for usage of their networks at what they charge their retail customers. In its Thursday submission, Bell asked the CRTC to overrule those caps and let the market determine wholesale prices with the CRTC providing binding arbitration. "In a sense, you're asking us to second-guess that legislation," CRTC Chairman Jean-Pierre Blais said in response. "What we're putting forward as a position is the overwhelming preponderance of the evidence is that no additional wholesale regulation is needed," said Bibic. "We don't view that as necessarily second-guessing the price cap. You may choose to do that as well and suggest that the may be removed by cabinet." In his response, Blais said the commission was still, in some ways, guided by government policy despite its status. "Being out at arms length doesn't mean you can't touch," he said. "In fact, the whole legislative framework provides for the commission to receive certain policy directions from the government." The CRTC, Blais said, does have the ability to overrule the legislative cap. He also noted that the CRTC's actions can be reviewed by the federal cabinet, and that whatever decision the regulator makes on wholesale wireless could be subject to that review. On Wednesday, Blais said that not acting on the wholesale wireless caps would leave the regulator in a “strange” position. “There is nobody in this commission that actually wants regulations just for the sake of regulation,” Blais said Wednesday. “And despite what commentators often say out there because they don't believe us, but we actually only regulate where necessary.” A request for comment from Industry Minister James Moore’s office was not immediately returned. In Bell’s presentation Martin de Gooyer, vice-president of pricing at Bell Mobility, addressed the concern raised by Rogers Wednesday that Bell and Telus Corp. operate as essentially one carrier for the purpose of wholesale provision. Rogers wanted the two companies to sell access to their network, which covers the entire country as a result of a comprehensive sharing agreement, as two separate entities. "The bottom line is we can't sell the Telus network to a third party that is not our end customer because it is not our asset," Gooyer said Thursday. "Similarly they can't sell our network to another party because it is not their asset. Yes, from a technology perspective it is possible, but from a contractual and property ownership perspective, it wouldn't be right for us to sell their network." It's not just Bell, Rogers and Telus that oppose wholesale price caps. On Thursday morning representatives from Manitoba Telecom Services Inc., Saskatchewan Telecommunications Holding Corp. and TBayTel told the commission that the caps were hurting their business. TBayTel president Dan Topatigh told the commission that the national carriers have built small networks in urban centres in the regional carriers' territories, and are avoiding building towers in rural areas because of roaming rates "that are not reflective of what it costs to provision rural service.” SaskTel CEO Ron Styles said the long-term effects would have the opposite of the outcome intended by the government. “Bill C-31 will weaken the regional carriers’ ability to provide a sustainable competitive alternative to the three national carriers,” he said. “It further advantages the national carriers, not the regional carriers, by eliminating our ability to use our regional networks to negotiate for wholesale services.” Styles said the three region carriers presenting on Thursday appreciate the need for regulation of wholesale services, and have suggested that they would offer regulated roaming rates to help the smaller carriers such as Wind Mobile and Mobilicity. “However, we emphasize how important it is that a regulatory framework takes into consideration the real regional competitive variations in the Canadian marketplace,” he said. Instead of blanket industry-wide rates for wholesale roaming, he said, such rates should only be granted to carriers with less than 10 per cent of the national market share based on revenues. “The regional carriers would provide the lower, regulated wholesale roaming rate to new entrants and other regional carriers,” he said. “But the regional carriers would not be forced to grant the national carriers the same regulated wholesale roaming rates.” Kelvin Shepherd, president of MTS, told the commission it should work to avoid damaging the “success story” of the regional carriers. “In Manitoba, Saskatchewan and northwestern Ontario, we are the successful alternative competitive carriers that the federal government and consumers seek,” he said. “Target regulation to where a market imbalance exists.” — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Carriers ask CRTC to take powers from government

News | October 2, 2014

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Carriers ask CRTC to take powers from government

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