#CyberFLASH: Why the CRTC Fell Short in Addressing Canada’s Wireless Woes

15525080959_6d2dbf4535_k-780x350The competitiveness of Canadian wireless services has been the source of an ongoing and contentious debate for years. Last week, Canada’s telecom regulator concluded that there is a competitiveness problem, yet in a decision surprisingly applauded by many groups, declined to use much of its regulatory toolkit to address the problem. Instead, it placed a big bet on the prospect of a smaller wireless carrier somehow emerging as a fourth national player.

My weekly technology law column (Toronto Star version, homepage version) notes that the Canadian Radio-television and Telecommunications Commission began investigating the wholesale wireless services market in 2013. The big three wireless companies – Bell, Rogers, and Telus – argued that the market was competitive and that no regulatory action was needed. By contrast, new entrants such as Wind Mobile called for regulated roaming rates so that they could offer viable national services with more affordable connectivity wherever their customers roam.

On the issue of competitiveness, the CRTC decision is damning: the big three maintain wholesale rates and the ability to impose terms and conditions that would not prevail if Canada had a competitive market. Given their market power, it concluded that regulation is needed and it will therefore establish a process for setting the wholesale roaming rate. That move should allow the new entrants to more affordably offer national service to their customers and turn them into more effective competitors.

While that was enough to generate supportive comments from Industry Minister James Moore, the new entrants, and some consumer groups, the reality is that the CRTC could have done far more to address the Canadian competitiveness problem. For example, smaller wireless companies had asked for “seamless roaming” to ensure that customers that move in and out of networks do not experience dropped calls. The Commission rejected the request, meaning that dropped calls will continue and will place the new entrants at a competitive disadvantage.

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