The federal government says it is concerned about high cellphone prices and is ordering the telecom regulator to review a recent ruling on roaming that makes it harder for some small wireless companies to provide inexpensive service.
Innovation Minister Navdeep Bains said on Monday he has directed the CRTC to revisit a March decision on how smaller wireless companies can access roaming services provided by the major wireless providers, Rogers Communications Inc., Telus Corp. and BCE Inc.
In that ruling, the CRTC said service providers that use WiFi as their primary network can’t rely on regulated rates for cellular roaming from the Big Three to keep their customers connected when WiFi is not available.
The regulator said companies that do not own airwaves or operate a cellular network in a particular geographic area cannot allow their customers to “permanently roam” on the networks of the established national carriers. The ruling reflected the CRTC’s policy of encouraging wireless companies to invest in building their own networks.
The decision, as well as a related ruling, put a halt to a business model used by Toronto-based Sugar Mobile, which offered a cheap wireless service relying primarily on WiFi access. When a cellular connection was necessary, Sugar turned to a roaming agreement that a related company had with Rogers in the northern territories.
Sugar, which does not have a network of its own, then marketed its service to customers across the country, until the CRTC said it could not do so.
The minister’s move is one of the first indications that the Liberal government plans to push for lower telecom bills – at least for some consumers. The previous Conservative government made the issue of competition in the wireless sector a key focus and policy and tried to bring prices down by creating the conditions for new wireless carriers to compete with the Big Three.
The current government has yet to take a similarly strong stand on telecom issues, but in a speech at the Canadian Telecom Summit in Toronto, Mr. Bains took a shot at high prices that keep low-income Canadians offline, calling the digital divide “unacceptable.”
“Middle-class Canadians and those working hard to join it are concerned about the rising cost of their Internet and cellphone bills. They deserve more affordable options. They deserve more choice. That’s why our government is taking action.”
Mr. Bains said he wants to encourage more competition from new technologies that could help connect low-income households, pointing to services that use WiFi as the primary means of connecting wireless customers. However, he stopped short of announcing broader plans to assist those struggling to pay expensive telecom bills.
“This issue of rising cellphone bills is a major concern and we’re trying to deal with that through these measures that we introduced this morning,” Mr. Bains said in an interview.
He also pointed to the government’s commitment in this year’s budget of $13-million over five years to create a confidential portal that would allow Internet providers to offer affordable broadband plans to low-income families. Rogers and Telus have begun offering low-cost Internet packages to recipients of certain social-assistance programs but Mr. Bains said Ottawa wants to work with other providers as well.
But representatives from public-interest groups who were on hand for the minister’s announcement said they want the government to take steps to address affordability sooner.
“We’d like to see the subsidies now. Competition [from WiFi-based services] is good, but we want subsidies now. We need low-income people to get access to the Internet now,” said Donna Borden, a leader with community advocacy group ACORN Canada.
John Lawford, executive director of the Public Interest Advocacy Centre, also said he wants to see the government consult directly with groups representing those affected. “If you design a program without the input of low-income Canadians, it’s going to be selective, it may not be what they need,” he said.
PIAC has argued for a monthly subsidy of up to $20 for low-income Canadians to spend on a telecom service of their choice and says the funds to support such a subsidy – which would cost $410-million annually – could come from a levy on the revenues telecom companies earn. However, in a ruling on broadband access last year, the CRTC created a fund to help pay for improved Internet service in rural and remote locations but declined to order a subsidy to address affordability.
Mr. Bains said on Monday that he is concerned that low-usage wireless plans in Canada are more expensive than in the United States and Britain. He said WiFi-based services are available south of the border – pointing to one $15 (U.S.) a month option offered by Republic Wireless – and wants to see similar options in Canada.
Samer Bishay, chief executive officer of Sugar Mobile and Ice Wireless, welcomed the announcement on Monday. Meanwhile, Dave Watt, senior vice-president of regulatory affairs at Rogers, said he is encouraged by the minister’s commitment to encouraging investment in networks, adding, “We look forward to working with the CRTC to examine creative ways to bridge the digital divide and maintain fast and reliable networks.”
The government is giving the CRTC until March, 2018, to review its decision.
- Rogers Communications Inc
- Telus Corp
- Bce Inc
- Bce Inc
- Updated June 5 4:00 PM EDT. Delayed by at least 15 minutes.