Videotron says national wireless expansion depends on CRTC

GATINEAU, Que. — The CEO of Quebecor Inc.'s Videotron told the CRTC Friday that her company needs the regulator to lower the legislated rate for domestic roaming if it is to build a national alternative to the incumbent wireless carriers. Manon Brouillette asked the commission to place its own cap on domestic roaming charges below the retail-based cap the government brought into force in June. The CRTC’s week-long hearing on the wholesale wireless market wrapped up on Friday and has heard testimony from BCE Inc., Rogers Communications Inc. and Telus Corp. that the cap needed to be raised or removed, from smaller players such as Wind Mobile and Mobilicity that said the cap should be lowered, and from regional players such as Eastlink and Saskatchewan Telecommunications Holding Corp. that wanted their own services to be exempt. Videotron spent $233.3 million on 700 MHz spectrum in Ontario, Alberta and B.C. in the auction earlier this year, and Quebecor CEO Pierre Dion has spoken about the carrier’s ambitions to become a national alternative to the incumbent players. “The issue for us today is what do we do with the spectrum we purchased outside Quebec,” Brouillette said in an interview Friday after the hearing. “We need to leverage that, and to do so there is no other way than giving us help in terms of roaming rates and access to tower sharing as well.” As part of its process, the CRTC is looking at the wholesale rates carriers charge one another to access each others’networks, as well as the rates charged for tower sharing and other issues such as seamless handoff when users move from one network to another. Quebecor, along with other small carriers, wants the commission to provide oversight for tower-sharing deals. One proposal before the commission is the implementation of a tariff that sets a regulated, industry-wide standard price for tower access. Both tower-sharing and roaming need to be regulated, Brouillette said, in order to ensure deals are made between the incumbent carriers and the smaller players. “You can’t have one without the other,” she told the commission. “They’re still dragging their feet. You have to have a mechanism where we can solve this problem.” The CRTC, rather than Industry Canada, should oversee dispute resolution, she said. “We think that if there has to be arbitration, we think it would be much more quick and flexible with you,” Brouillette told the commission. Videotron said in its filing that one of the biggest problems with the government’s retail-based cap is its calculation, which it said includes lower-priced legacy plans and other costs that the incumbents should not be passing on to wholesaler buyers. “Other services are included in that price: retail stores, marketing, device subsidies,” Brouillette told the hearing. “We shouldn’t have to finance the commercial activities of the incumbents.” Mandating seamless roaming, where customers on the fringes of Videotron’s coverage can switch between networks without dropping calls, should also be a part of the CRTC’s actions, she said. “If roaming is not seamless, we lose those subscribers at the fringe,” she said. “We have to have this continuous roaming system for the network.” Videotron, she said, is living up to the government’s desire of a fourth wireless carrier, providing Quebec residents with better, cheaper service and forcing the incumbents to compete. “We brought some competition into play,” she said. “The question is how to ensure long-term sustainable competition.” That competition, Brouillette said, has stimulated investment in the province. Her company flipped the switch on its LTE network in August. “With a fourth player that invests in technology, we’ve managed to do something,” she said, adding that prices have decreased while service levels have increased at carriers across Quebec. In the interview after the hearing, Brouillette said her company would consider striking deals outside its home province similar to the spectrum-sharing agreement it has in place with Rogers in Quebec. "We feel that there is a place for us, but we need the appropriate conditions," she said. She said a national expansion at the current roaming rates would be "very difficult." During the hearing, Brouillette responded to concerns raised by the incumbent providers earlier this week that lowering roaming rates would deter companies from investing in upgraded networks. "This is a question of business philosophy," she told the commission. "We are builders. We are innovators. We wish to control the technology as quickly as possible. If we had healthy, sustainable and fair rates, we would simply invest more quickly." Videotron's new LTE network, she said, is proof that her company is serious about building networks. “It was very important for us to have higher speeds than the incumbents,” she said. “We wanted to be better than our competitors. This is a law of the market; we need to be better than our competitors." The only other party presenting Friday was Jean-Francois Mezei, a Montreal-area telecom consultant with Vaxination Informatique, who told the commission that the incumbent carriers will do anything to protect their market share. "The unfortunate reality is that stronger medicine is needed to force incumbents to react to competitive forces from non-incumbents," Mezei said in his prepared speaking notes. "Short of implementing structural separation, effective competition cannot and will not happen with commercially negotiated rates." The only option, he said, is for the CRTC to regulate such matters. CRTC Chairman Jean-Pierre Blais closed the hearing by saying the commission would not be hasty in planning the best course of action. “Given the huge impact this market has on the Canadian economy and the size of the record before us, it is important for the commission to take the necessary time required to make an informed decision,” he said, adding that a decision would be issued within four months of the Oct. 20 deadline for making final written submissions. — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Videotron says national wireless expansion depends on CRTC

News | October 3, 2014

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Videotron says national wireless expansion depends on CRTC

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