GATINEAU – Without domestic roaming rate caps Wind Mobile can’t compete in the Canadian marketplace and despite what the incumbent wireless companies have to say, the high wholesale rates they charge the newcomers prevent some Canadians from choosing Wind as their provider.
So, the CRTC must step in, the company told the CRTC in the reply phase of the Regulator’s dive into wholesale wireless domestic roaming rates, the initial comments for which we summarized here last week.
In its reply, Wind noted several consumer groups told the CRTC that the fact Wind offers “home” rates for when customers are on Wind’s own network and higher “away” rates when they are using their phones beyond that (thanks to the roaming rates it pays to its provider Rogers), is a negative influence when it comes to the buying decisions made at retail. At the crux of the proceeding is to find out how much less the Canadian companies are charging their U.S. wireless partners for roaming in Canada as compared to the our independent wireless companies – and whether that contravenes section 27(2) of the Telecom Act by conferring an undue preference.
The company called the rates currently being paid to its domestic roaming provider Rogers “discriminatory, preferential and disadvantageous” and re-iterated what it said in its initial comments, that “(t)he Commission should thus impose caps on Rogers' rates for domestic roaming services to remedy this conduct. This is necessary to ensure that all retail consumers enjoy the advantages of a competitive, world-class market,” reads its reply.
Wind went on to refute many of the claims made by Rogers and the other incumbents and pointed to its recently launched $15/month unlimited U.S. roaming plan as proof the wholesale domestic roaming rates they must pay in Canada are “unreasonable”.
“Once Wind was able to secure fair commercial U.S. roaming rates, it replaced its usage-based U.S. roaming plans with a clear, simple and flexible plan for unlimited voice, data and text messaging while roaming in the U.S.; Wind immediately became a market leader in terms of the price for U.S. roaming by Canadians,” reads its submission.
The incumbents also claimed in their submissions that Wind is paying a just and fair rate to roam because the market here is competitive (which is something the Competition Bureau takes issue with) and that the company’s roaming is just a one-way, one service, deal whereas its agreements with American carriers involve reciprocal roaming arrangements for high volume usage.
For Wind, however, it’s an apples-apples comparison. “Wind notes that roaming services are simply roaming services, and if different rates and terms are offered to one party compared to what is offered to another, there is discrimination or a preference. This is so whether such services are negotiated in the context of a bilateral relationship, one-way services, network sharing, content deals, high volume, or low volume. Wind does not dispute that these factors may be relevant considerations for the Commission in determining whether or not such discriminatory or preferential rates and terms are unjust or undue. However, these characteristics are not relevant to establishing the preference or discrimination itself.
"Wind notes that even if one accepted this claim on its face… this difference cannot possibly explain several orders of magnitude differences in rates.” – Wind Mobile
“With respect to the argument that (most) U.S. roaming agreements are not relevant precedents because they tend to be bilateral arrangements, Wind notes that even if one accepted this claim on its face, which Wind submits this Commission should not do, this difference cannot possibly explain several orders of magnitude differences in rates.”
Also, added Wind, the fact that it hadn’t availed itself of the dispute mediation process offered by Industry Canada to fight the rates they have long complained were too high (something the incumbents all noted in their original submissions filed January 29) should not mean it is satisfied, since it feels it was forced to pay in order to get the company off the ground.
“The arbitration process established by Industry Canada reflected its very real concern that the characteristics of the Canadian telecommunications industry ‘unavoidably provide incumbent carriers with both incentives and opportunities to prevent market entry or constrain competition, even in markets with multiple providers’,” reads Wind’s reply.
“In terms of the current rates being charged… it cannot reasonably be challenged that Rogers was the monopoly supplier of roaming services (because of its network technology as compared to Bell and Telus) for Wind at the time they were forced upon Wind, or… that those rates reflect the exercise of market power and the extraction of monopoly rents,” it continues, “Indeed, given the inadequacy of the only available recourse in the circumstances, there can clearly be no credible expectation of a genuine commercial negotiation between a small operator and any one or more of the Incumbents that would achieve rates reasonably comparable to those others enjoy for similar services without the intervention of a countervailing influence (i.e., the regulator) to introduce a more balanced set of negotiating forces between the smaller operator and the Incumbent.”
What Wind says Canada needs are caps on the rates. “The rate caps as proposed by Wind will ensure that: (i) it is more financially attractive for the small operator or entrant to build out its own network in a reasonable period of time in the majority of its licensed areas (by population as required by conditions of licence) rather than continue to pay roaming charges; and (ii) the receiving operator receives a return from roaming traffic that adds to its revenues and profits.”
We’ll have the reply comments from some of the incumbents when those documents become available.
The Commission will rule on the proceeding within four months of the close of the February 10th replies deadline.
