The federal telecom regulator wants to ensure Canadians benefit from a “fair and competitive” market for wireless services because smartphones are fast becoming indispensable for both consumers and businesses.
Although the Canadian Radio-television and Telecommunications Commission has no intention of regulating consumer prices for cellular services, it is taking note of the market’s growing importance. Smartphones are already used by the vast majority of Canadians who subscribe to mobile services and are poised to become ubiquitous as prices fall over the coming years.
“We know that both for business and for individual Canadians these are tools, not only they use for their friends and family, but they’re also extensions of their personalities and their lives. This is how they organize their lives,” CRTC chairman Jean-Pierre Blais said in a telephone interview this week.
“With the penetration of smartphones ... they are not even phones in the classic sense. They are not used for talk as much as broadband [Internet]. So, reality has become that they are essential to many Canadians in their daily lives ... It’s obviously something we must ensure is a fair and competitive marketplace.”
Canadian families spent $67 per month, on average, for wireless services in 2012, according to a recent CRTC report. That study also found that low-income Canadians were becoming increasingly reliant on wireless phones as they ditched their home phones. In the third-quarter of 2013, each of the Big Three carriers (Rogers Communications Inc., BCE Inc. and Telus Corp.) reported that more than 70 per cent of their post-paid customers, those who pay their bills at the end of the month, used smartphones.
For about two decades, the CRTC has largely taken a hands-off approach to regulating wireless services. Although it unveiled a wireless code of conduct to help bolster consumer protections this year, it reiterated there was no need to actively regulate consumer prices because the market was sufficiently competitive. (The wireless code came into force on Dec. 2.)
But earlier this week, the Commission made other moves that hold the promise of bolstering competition. After months of preliminary analysis, the regulator launched two proceedings to escalate its investigation into whether the Big Three are stifling competition by charging excessive rates to smaller competitors for domestic roaming – a service that allows startup carriers to provide wireless services to customers in parts of Canada that fall outside their own network coverage.
Specifically, the CRTC appears to be considering whether to regulate the wholesale rates that small carriers pay incumbents for domestic roaming. Such an outcome could, in turn, affect the retail prices that consumers pay and help new entrants like Wind Mobile to offer nationwide voice and data plans.
“In any market, there is a link between wholesale and retail. I think in this particular instance, we’re just looking at the wholesale rate issue – rates, terms and conditions under the roaming arrangements,” Mr. Blais said, adding the regulator is trying to determine the state of competition in the wholesale roaming market.
Even so, Ottawa may just be getting warmed up.
When asked Friday whether the federal government plans any further action on domestic roaming (separate from the two CRTC proceedings), Jake Enwright, press secretary for Industry Minister James Moore, said: “Yes, as we said in the Speech from the Throne, our Government will be taking steps to reduce roaming costs on networks in Canada.”
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