Don’t opt for alternative low-cost plans, carriers warn CRTC

The big three wireless providers doubled down on their proposed low-cost, data-only plans this week, telling the CRTC that alternative proposals from other parties in the proceeding could lead to a jurisdictional challenge and harm the wireless industry if implemented. If the CRTC were to put in place an $11.62 per month for 1 GB plan proposed by the Public Interest Advocacy Centre (PIAC), considering the average wireless consumer paid $64 a month in 2016, the industry would see a 25 per cent reduction in total revenue, Rogers Communications Inc. wrote in a reply filing. “With 10 million consumers attracted to an $11.62 monthly price point for 1 GB of data, the impact on the industry in reality would be a reduction of $6.29 billion per annum,” the company said. “Mobile wireless service providers would be left with an insufficient margin to fund needed capital expenditures and pay debt charges, and no profits. Wireless networks would not be upgraded to meet traffic demands and new 5G networks would be very slow in coming.” The replies were filed in a proceeding initiated by the CRTC in March, when the regulator ordered Rogers, BCE Inc. and Telus Corp. to file proposals for lower-cost, data-only plans in order to fulfill the government’s goal of more affordable wireless options for consumers. In response, Rogers proposed a $25 for 400 MB per month plan, while Bell and Telus said they would offer the plans through their flanker brands. Bell’s Virgin Mobile would offer a $30 for 500MB, Telus’ Koodo a $30/500 MB plan, and its Public Mobile multiple plans, including a $30/600 MB option. In response, a number of interveners called for plans with higher data buckets and lower prices. The Competition Bureau said it’s unclear why the plans “should not feature a variety of capacity limits, stretching into multiple gigabytes per month.” Academics and advocacy groups suggested cheaper plans with more data, including a sliding-scale proposal from Carleton University PhD candidate Ben Klass and professor Dwayne Winseck, in a report commissioned by Consumers’ Association of Canada Manitoba Branch. They proposed plans that start at 250 MB for $5, and go up proportionally in increments, up to 5 GB for $45. In its intervention, Bell said that the alternative plans proposed by various other parties “are not credible.” “They include rates that are well below the cost-based rates set by the Commission for mandated wholesale domestic roaming,” Bell said in its reply. “Adoption of these types of plans would disrupt the competitive marketplace, reduce investment in networks, and in particular undermine new entrant facilities-based competitors.” It also said that if the CRTC were to opt to regulate rates despite an existing order to forbear from regulating them “it is certain there will be a jurisdictional challenge.” That would bring significant uncertainty into the market, Bell said. Bell argued that the purpose of the proceeding was to put in place entry-level plans, “not to comprehensively supplant the entire suite of offers available in the Canadian market today with plans determined by regulatory fiat in a Commission proceeding.” Telus also pointed to the issue of jurisdiction, saying that in order to cap rates the CRTC would first have to reconsider its previous decision to not to regulate wireless prices. “Having forborne from rate regulation...the Commission can only re-regulate rates where it finds that there is no longer competition sufficient to protect the interests of users — and it can only do so with notice to parties and an appropriate record,” it said. Telus added that it launched its proposed plans in May, and that the adoption rates show that customers are finding the plans “to be valuable.” The specifics of those rates weren’t included in the publicly-available version of the filing. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Bryson Masse at bmasse@thewirereport.ca

Don’t opt for alternative low-cost plans, carriers warn CRTC

News | June 29, 2018

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Don’t opt for alternative low-cost plans, carriers warn CRTC

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