OTTAWA – There is no working market for domestic wholesale roaming in Canada, which has led to sky-high rates that injure competition, says Halifax-based cable and wireless company Eastlink. Conversely, Bell Mobility argues new entrants have the choice of three providers, all of which are girding for roaming business.
In comments to the CRTC’s investigation into domestic and international roaming, Eastlink says the incumbents’ wholesale domestic roaming rates are much higher than their retail rates and thus “are inherently commercially unreasonable.” It adds these rates “are a significant obstacle to new entrants’ ability to compete over the long-term, considering the economics of being a wireless new entrant in Canada.”
Even wholesale roaming rate negotiations with an incumbent wireless service provider (WSP) can be problematic because the new entrants have little to offer the bigger players during discussions. “New entrants require these services and have little to offer in return to offset the costs. We do not have comparable networks to offer reciprocal wholesale domestic roaming arrangements,” the company says, noting that it has to conduct these negotiations but has little to offer other than monthly roaming fees. “As a result, it is not possible to reduce these artificially high wholesale domestic roaming rates via negotiation.” The comments echo some those made by CEO Lee Bragg, whom Cartt.ca featured a few days ago.
Bell Mobility says it’s important to remember that there are two types of wholesale domestic roaming agreements: reciprocal and one-way. Reciprocal deals see customers from each carrier roaming onto the other, while one-way agreements involve new entrant users roaming onto an incumbent’s network. Bell acknowledges that the rates for one-way deals are higher than those of reciprocal agreements.
The company argues in its comments that if there were a wholesale roaming rate problem, it would be reasonable to assume that it would be forced into arbitration discussions with a rival carrier (arbitration is required if two carriers can’t come to a roaming agreement). But this hasn’t been the case.
The firm says it “has always been able to reach commercial agreements and has never been the subject of nor initiated an arbitration process. This is because WSPs typically have at least three alternative providers for domestic roaming and we are highly motivated to win their business.”
Besides, Bell states that there is no reason for the Commission to stick its nose in wireless rates. It points to the recently released Wireless Competition in Canada: An Assessment, a report prepared by the University of Calgary’s School of Public Policy (For more on the report, click here) and Telecom Decision 2012-556 which provides evidence that intervention in the regulation of wireless service rates isn’t warranted.
In referring to the October 11, 2012 decision, it writes, “the Commission considers that competition in the mobile wireless market continues to be sufficient to protect the interests of users with respect to rates and choice of competitive service provider [and] there is no evidence that the conditions of forbearance have changed sufficiently to warrant commission intervention with respect to mobile wireless service rates or competitiveness in the mobile wireless market.”
Telus echoes Bell’s sentiments about the state of competition in Canada’s wireless markets, referring to the same decision in its comments. The company goes a step further arguing that if the commission were to decide to regulate retail roaming rates, it would first have to revisit its previous wireless forbearance decisions.
Eastlink’s submission, on the other hand, says that sustainable wireless competition is in jeopardy if the Regulator doesn’t do something to address domestic wholesale roaming. The company notes the current wholesale roaming regime has already had a negative impact on its ability to offer services.
“For example, it was not possible to launch service in Nova Scotia until half the province was built, to minimize our reliance on roaming. This completely defeats the purpose of mandatory roaming as set out in the conditions of licence, and serves only to delay rural Canadians’ access to advanced wireless services and competition,” states Eastlink.
Bell says the real problem around roaming revolves around bill shock from international roaming. The company argues that the forthcoming enforcement of the wireless code of conduct beginning on December 2 will solve many of those issues. This includes caps on data charges and the mandated unlocking of devices, which gives consumers the ability to use SIM cards in other nations.
