TORONTO – It might be a sign of the ingrained competitive spirit of the telecom industry in Canada that even when wireless carriers manage to agree on a vital issue – the need for a national code to protect wireless consumers’ interests – they still manage to bicker with one another.
During the Canadian Telecom Summit’s “regulatory blockbuster” panel discussion on Tuesday morning, moderated by Cartt.ca editor and publisher Greg O’Brien, regulatory experts from the big three incumbents – Rogers, Bell and Telus – along with MTS Allstream, Wind Mobile Canada and the Public Interest Advocacy Centre (PIAC), appeared to be united in their call for federal regulation of the wireless industry in the form of a national consumer protection code. However, there didn’t seem to be much harmony as panellists traded barbs over why there was a need for a consumer protection code in the first place.
John Lawford, counsel for PIAC, said he feels like a prophet for telling attendees of last year’s Telecom Summit that “consumers were mad as hell and weren’t going to take it anymore.”
Ed Antecol, vice-president of regulatory affairs and carriers services for Globalive/Wind Mobile, echoed the sentiment, saying a wireless code of conduct is needed to protect consumers from the abuse they receive at the hands of the big incumbent wireless providers – which Antecol cheekily referred to as “Robelus” several times during the discussion.
The call for a national wireless consumer protection code is in response to a recent move by different provinces to regulate wireless contracts and services – what Mirko Bibic, Bell Canada’s chief legal and regulatory officer, calls a “hodgepodge” approach, with individual provinces having slight variations in their proposed legislation.
Bibic said now that the whole industry seems to be on board, conditions are ideal for the CRTC to introduce a national consumer protection code. “We have the benefit here of having a national regulator that has the jurisdiction to step in and take leadership with us,” he said.
He added, however, that he disagreed with Lawford’s and Antecol’s point that there was a “clamour of consumer discontent”. He argued that, in Ontario for example, the number of complaints that have been made to the Ontario Ministry of Consumer Services about cell phone services – 181 written complaints – is a negligible amount when compared to the total number of wireless subscribers in the province – 10 million.
In response, Antecol said: “The provinces are regulating out of necessity, because there’s a huge amount of abuse going on with termination penalties and other measures. So they’re acting based on the demands of their constituencies.” To counter Bibic’s point about the number of consumer complaints, Antecol said thousands of people filed complaints when the CRTC put the issue out to public notice. He went so far as to call Bibic’s numbers as “totally misleading” and “totally distorting”.
What everybody on the panel did agree about is that the CRTC should be the regulatory body responsible for a wireless consumer protection code, and not the separate provinces. “The CRTC has the expertise to do this,” said Ted Woodhead, Telus’s vice-president of telecom policy and regulatory affairs. “These other consumer agencies in the provinces don’t have the expertise to understand carrier systems.”
(The panel is pictured and left to right, are: Greg O'Brien, Cartt.ca; Mirko Bibic, Bell Canada; Ted Woodhead, Telus; Ken Engelhart, Rogers; Chris Peirce, MTS Allstream; John Lawford, PIAC; Ed Antecol, Globalive.)
Ken Engelhart, senior vice-president of regulatory affairs for Rogers Communications, said the draft legislation in both Ontario and Nova Scotia contains a stipulation that will end up frustrating wireless consumers in those provinces. In those provincial jurisdictions, once a wireless contract ends, the provider is required to cancel the service, instead of allowing the customer to roll over month to month until they enter into a new contract. “So in Ontario and Nova Scotia, you’d be driving down the street one day and your phone would go dead, because your contract is over,” Engelhart said. “
“You need somebody who knows actually something about the wireless market to be doing this regulating, because if it’s in the wrong hands, they end up doing things that are going to annoy consumers, not help them.”
Having a wireless industry not regulated federally by the CRTC is a concern, said Chris Peirce, chief corporate officer for MTS Allstream. “We have a national regulator who has decided that they don’t need to do anything in wireless. Clearly, that’s no longer true. The CRTC needs to get involved,” Peirce said. “And I don’t know how they could possibly decide now not to, when both consumers and carriers are saying they should.”
Earlier in the day, the CRTC’s acting chairman, Len Katz, spoke at the Summit and when asked about the issue, noted the Commission has called for comments on such a code of conduct. “Clearly, no one is looking for regulation of end-user rates, consumer rates, at this point in time, as far as I know,” Katz said. “But as I said, the file is open, we’ll take a look at it and we’ll try to make a determination as quickly as we possibly can.”
WIRELESS SERVICE PRICING IN Canada was another topic that generated some heat among the panelists. Referring to other comments made by the CRTC’s acting chairman earlier in the day regarding wireless prices, Bell’s Bibic said Canadian prices “compare rather favourably” to those in the United States. He pointed to one of Bell’s own wireless data plans as being cheaper than a comparable service plan offered by AT&T in the States.
“If you want a 5GB (gigabyte) iPad data plan from Bell, it’s $35 (per month). If you go to AT&T, it’s $50 (per month),” Bibic said. “The exact same iPad, the exact same package – 5GB, $50, $35 – those are the facts.”
However, both PIAC’s Lawford and Wind Mobile’s Antecol found themselves on the other side of the argument, with other numbers, voicing the accepted opinion in Canada that wireless service rates are still too high compared with other countries around the world. “Rates are not yet where they should be,” Lawford said, adding that data from the OECD continues to indicate each year that Canada is “not doing well” when it comes to wireless pricing.
Antecol’s own opinion was based on ARPU (average revenue per user) figures, which Rogers’s Engelhart argued is not the best measurement for determining how Canadian wireless prices rank worldwide. “ARPU doesn’t tell you much. You have to look at another page in the same report, which is average revenue per minute,” Engelhart said. “Average revenue per minute in Canada is one of the cheapest in the world. I think we’re fifth lowest.”
WHEN DISCUSSION TURNED to the issue of relaxation of foreign ownership rules in the telecom industry, competitive battle lines were drawn again. “Lifting all foreign ownership restrictions on telecom carriers with less than a 10% national revenue share will create a two-tier capital structure in Canada’s telecom market, with one set of rules applying to Bell, Rogers and Telus, and another set applying to everyone else,” said Bell’s Bibic. Industry Canada has decided to liberalize, a little, the foreign investment regulations in Canadian telecom, as Cartt.ca has reported.
This, coupled with other aspects of the proposed rules for the upcoming 700MHz spectrum auction, would mean “any foreign giant will be able to acquire two blocks of prime 700MHz spectrum, while Canada’s national carriers – those of us who invested billions in all areas of the country, urban and rural – are limited to just one block,” Bibic explained. He added that he wanted to make it clear Bell is not quarrelling with the auction rules that would allow existing Canadian new entrants to bid on two blocks of 700MHz spectrum, while the incumbents could bid on only one block.
“But we do object to the idea of large foreign giants [being] permitted to enter and bid on Canadian spectrum, while holding a 2-to-1 spectrum block advantage in the auction,” Bibic said.
Peirce said his organization is in favour of the government’s approach to relaxing foreign ownership rules for smaller players in the market. While MTS Allstream didn’t oppose the idea of liberalizing foreign ownership rules for all telecom carriers, it believes there already is a two-tiered system in terms of the ability of incumbents and new entrants to access capital. “So this is going to help to level the playing field and ensure that new entrants have the same access to capital as our large incumbents do,” he said.
Woodhead said the right public policy choice is for foreign investment restrictions to be lifted entirely for all telecom carriers, and the government needs to provide a timeline for when that will happen (in a scrum later with reporters, Industry Minister Christian Paradis said no such timeline will be coming).
A final comment on the issue came from Antecol, who said he didn’t have a problem with foreign ownership rules being relaxed completely, as long as some core issues are studied. “The incumbents are vertically integrated – they have broadcast operations and cable operations. I think we need to look and see what the effect on the broadcast side, the content side of the market would be in terms of getting rid of foreign ownership rules completely,” he said. “I don’t blame the government for being a little bit cautious here.”
