Regional wireless carriers seek review of incumbents’ roaming rates

A consortium of regional wireless competitors have filed an application with the CRTC seeking a review of the wholesale roaming tariff rates of the big three national carriers. It also wants annual rates to decline and for the rates to be considered interim rates. In a May 19 document, Bragg Communications Inc.’s Eastlink; Cogeco Inc., Quebecor Inc., and Xplornet Communications Inc. say that the methodology used to determine the rates is out of date. “The requested relief is necessary to put an end to a situation where regional wireless carriers are being charged wholesale roaming rates that are manifestly unjust and unreasonable,” the application states. “This situation is undermining sustainable competition in the wireless market and harming Canadian consumers. It cannot be allowed to persist.” The CRTC first set the rates back in the fall of 2015 on an interim basis. They were made final in 2018, retroactive to May 5, 2015. The regional carriers point out that the rates have remained unchanged, 6.5 years later. A 2021 policy statement reaffirmed that the national players should provide seamless roaming and that the wholesale roaming policy applies to 5G networks. Telus sought to vary that decision. It argued that courts should strike down a provision regarding access to public infrastructure for technology upgrades and another section mandating seamless roaming for regional carriers. Bell asked for changes to the roaming policies affecting Videotron. It said there should be a mandated, non-incidental roaming test. The Public Interest Advocacy Centre opposed the Bell challenge. The small carriers argue that the 2015 rates were applied when 3G was dominant with 4G as an emerging technology. Now 4G is dominant with 5G on the horizon. “The passage of these equipment lifecycles translates into dramatic reductions in the unit cost of handling wireless traffic,” the companies say. “These reductions in unit costs then get translated into reductions in retail prices (albeit far too slowly in a market subjected to the dominance of the national wireless carriers).” The regional firms explain that the average revenue per gigabyte of wireless data has fallen from $17.33 in 2017 to $8.73 in 2020, a decline of 20.4 per cent. The companies assume the same fall over the 6.5 years the rate regime has been in place, leading to the conclusion that revenue has fallen 77.4 per cent since 2015. They illustrate their case by citing the roaming rates in the European Union which have declined each year since 2017, with reductions continuing until 2027. Using an exchange rate of $1.36 dollars to the Euro, the current rate on the continent is $3.40/GB. BCE Inc.’s Bell Mobility charges $13.28/GB, Rogers Communications Inc. pegs it at $13.98/GB and Telus Corp. is at $14.07/GB. “There is simply no rational explanation for why wholesale data roaming should be four times more expensive in Canada than the EU,” the regional players assert. The rates are not related to underlying costs, the small companies say, and are unreasonable. Rate revision is overdue, they add. The application quotes commission policy statements which put the national players on notice that they should be cautious in looking for incremental wholesale roaming revenues. Overreach could result in a review of the wholesale roaming tariffs. “Incumbent hubris, however, knows no bounds,” the application continues. “Rather than heed the commission’s invitation to be prudent, all three incumbents submitted tariff notices…that include anti-competitive proposals to impose new, potentially unlimited, up-front charges on regional wireless carriers.” The regional firms are calling for an immediate and comprehensive review of the incumbents’ wholesale roaming tariff rates, stating the status quo harms competition and consumers. The new rate schedule must be set on a declining scale. Finally, they seek the current rates to be declared interim rates. –Reporting by Paul Park at ppark@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca .

Regional wireless carriers seek review of incumbents’ roaming rates

News | May 24, 2022

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Regional wireless carriers seek review of incumbents’ roaming rates

News | May 24, 2022

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