By Ahmad Hathout
OTTAWA – SaskTel has warned Innovation Canada that if it significantly increases its costs to certify telecommunications equipment, Canadians will see higher monthly telecom prices.
The department has said that new telecommunications equipment has emerged since it last conducted a certification cost study in 2007, meaning it has had to invest in new technologies to keep up. This has led to the department only recovering 8% of the cost to certify equipment, including 5G smartphones and Wi-Fi routers.
As such, ISED is proposing to increase the cost of that process, including raising the $1,200 certification application fee to $4,000 because the process generally takes two more days to complete; charging $375 to amend radio equipment certifications under a new category; and increasing the rate for its technical expertise from $150 to $160 per hour. The department estimates it will be able to generate $35 million by 2027-28, or 95% of its costs for the program with the new pricing structure.
But the Saskatchewan crown corporation said in a comment published yesterday that the department is losing sight of who this will impact: Canadians, whom the department said is most harmed by its inability to recover the costs associated with these certification processes.
“The knock-on effect of increased ISED fees is necessarily higher fees for the monthly cell phone and internet plans of Canadians,” said the telecom. “Meanwhile, telecommunications service providers are constantly being pressured to lower the rates for the services we provide.”
As such, the claim that “taxpayers bear the burden of revenue shortfalls” is “an empty one,” SaskTel added. “If ISED raises its fees for the certification service, Canadians who use certified devices will pay, through the cost of the device from the manufacturer or a telecom, or through increased tax.”
SaskTel warns about the certification costs for “niche” devices needed to power rural and remote connectivity will have a particular acute impact in those difficult-to-connect regions, driving up rural internet prices.
The telecom said it is “consistently under attack for the price we charge for the valuable service we provide,” including being subject to “various regulatory policies, pressures, and government interventions, all of which create direct costs for SaskTel and our subscribers.” Then, it added, when prices go up because of new certification costs, “service providers will be questioned why such a service costs more.”
The company also asked how ISED is claiming costs have outpaced revenue when it said it has outsourced a chunk of the certification process to the manufacturers of the devices before they submit their applications. It said ISED is not being wholly transparent.
While Rogers, the only other respondent comment published by ISED, said it agrees with a cost recovery approach, it took this opportunity to ask why the same philosophy doesn’t apply to spectrum costs.
“If adjusting equipment certification fees is intended to ‘relieve taxpayers’ of an undue burden of related costs,” Rogers argued, “such a policy direction surely extends to relieving wireless consumers from an undue burden of unreasonably high spectrum fee rates.”
