The opinions expressed in this editorial are those of the author and do not necessarily reflect those of Decima Reports. The CRTC’s decision last week reaffirming its position that the use of handset subsidies is a simple cost of doing business could have a dramatic impact on how carriers price handsets and services in the future. While the actual effects of Telecom Decisions CRTC 2002-22 and 2002-23 may not be known for some time, there’s a possibility that the impact could be felt beyond the carriers’ bottom line. In those two rulings, the commission ordered both Rogers Wireless Communications and Telus Communications to resubmit 2000 contribution documents using the methodology set out by the CRTC. Without the ability to recoup the actual cost of handsets, it seems that the wireless operators would have no other choice but to pass along the full cost of handsets to consumers if they want to deduct full handset costs from contribution payments. Alternatively, the industry could increase the cost of services to recoup the shortfall. The commission’s decision has tied the hands of the country’s carriers in being able to offer end-users affordable handsets and services. For an industry that has yet to become profitable and still carries enormous debt load from years of network builds and upgrades, it may have no other choice but to pass along the full cost of handsets and other wireless communications devices to the end-user. While this may solve the problem of being able to recoup the full cost of handsets in the eyes of the commission, the industry could very well be shooting itself in the foot if it attempts such a move. If the carriers are to pay for the expensive network upgrades, they are going to have to convince a significant number of Canadians to buy into these new services. But if the handsets or services are too expensive, the Canadian population may just refuse. The CRTC has lost an opportunity to lend its aid to the wireless industry. Handset subsidies are a win-win proposition when carriers receive contribution relief for the cost. Subsidies are more than just a cost of doing business, they are a business necessity to serve the Canadian public with a vital communications tool.