Industry Minister James Moore escalated the war of words against the major telecom companies, saying their “Fair for Canada” advertising campaign this summer was motivated solely by their fear of competition from Verizon Communications Inc.
The Big Three telcos – BCE Inc., Rogers Communications Inc. and Telus Corp. – funded a multimillion-dollar effort to raise public awareness about what they describe as “loopholes” in the federal government’s wireless policy. The companies say Ottawa’s rules for an upcoming auction of wireless licences give preferential treatment to foreign players, allowing them easier entry into the Canadian market.
Verizon closely examined whether to capitalize on those rules and expand into Canada. In early September, the company said it would not do so. Indeed, none of the four wireless companies that dominate the U.S. market have decided to enter the Canadian auction, according to Jeff Fan, a telecommunications analyst with Scotia Capital Inc.
Companies had until Sept. 17 to put down a deposit.
Mr. Moore said the telcos’ advertising campaign has gone quiet since Verizon’s announcement. “So for them [the Big Three] it was not about being fair for Canada. It was about trying to stir up concern about Verizon possibly coming into the Canadian marketplace,” he said Wednesday.
Asked following an Ottawa speech Wednesday if he had picked this fight with wireless firms, Mr. Moore rejected the notion outright. He said his relationship with the companies is “fine,” adding, “there are areas of disagreement but there are also areas of agreement. In spite of the perception of things, we get along fine.”
As evidence of this, he noted he’d had dinner with departing Rogers CEO Nadir Mohamed and is shortly scheduled to have lunch with Telus CEO Darren Entwistle in Vancouver.
After spending the summer criticizing the government’s wireless policies, some large carriers now worry that Ottawa is poised to become a more aggressive regulator.
“I think regulatory is always at the top of our risk list. It is just something that we can’t control obviously, and sure, there is heightened attention right now,” John Gossling, chief financial officer for Telus Corp., told a CIBC investor conference in Montreal on Wednesday.
“And I think with the bidding deadline now passed, hopefully that gives a bit of, you know, time to clear the air and things will settle between now and the auction, I think. We’d like to have a constructive discussion with Ottawa on this and I think there are lots of attempts to do that.”
Rogers Communications Inc., meanwhile, tried to distance itself from this summer’s spectrum skirmish with Ottawa.
“It’s been like watching a bit of a soap opera,” deputy chairman Edward Rogers told conference delegates. “Rogers has tried to be not as engaged in the dramatics of it and tried, as best we can, [to] offer more of a practical alternative for government, for industry.”
When asked by an analyst whether he thought there would be a “regulatory price to pay” for the big three’s Fair for Canada lobby campaign, of which which Rogers was a part, he replied: “No, I don’t. I think companies and people have to do what they need to do.”
Over the past year, however, both the federal government and the Canadian Radio-television and Telecommunications Commission have signalled a willingness to take a more hands-on approach to regulation in the wake of rising consumer complaints about telecom services.
Nearly 11,000 complaints were filed with Canada’s Commissioner for Complaints for Telecommunications Services during its 2011-2012 fiscal year – with the lion’s share about wireless services. Commissioner Howard Maker said Wednesday that CCTS is on track to record a double-digit increase in overall complaints this year.
The CRTC issued a wireless code of conduct for the industry earlier this year which effectively eliminates three-year contracts, starting in early December, and caps fees for data overage and international roaming. It has since begun to scrutinize both domestic and international roaming rates to assess how they impact competition.
Earlier this week, BCE slashed its U.S. roaming rates on its most popular plans by 50 per cent, but BCE’s chief financial officer, Siim Vanaselja, denied the move was designed to ward off regulatory intervention. He also stressed that wireless industry has been “forborne” of regulation for nearly two decades, so re-regulating prices, such as roaming rates, is not simple to implement.
“Our intention would be to continue negotiations with the global carriers that we deal with in our reciprocal roaming arrangements … and be able to offer our customers improved roaming rates because we know that the one area where customers are truly dissatisfied with pricing is on roaming.”
Industry Canada, meanwhile, has introduced new rules to govern spectrum transfers between carriers, while also beefing up obligations for domestic-roaming and tower sharing – moves that are now the subject of separate legal actions by Telus and BCE.
“What you are seeing now is that the companies are not liking the mobilization of consumers,” John Lawford, executive director of the Public Interest Advocacy Centre, said in an e-mail on Wednesday, adding that “redressing obvious consumer rip-offs like roaming pricing” are obvious policy directions for government.
“BCE, Rogers and Telus clearly don’t know that this is the direction the wind is blowing and are opposed to it rather than working to shape it for their interests. This is their loss,” he added. “The old ‘forbearance’ stuff about wireless is a very much dead duck; we are now regulating wireless in this new consumer protection manner, while leaving a very large swath of freedom to price in an open market.”
Earlier this week, Wind Mobile CEO Anthony Lacavera said the Big Three behaved like “raving lunatics” during their “aggressive” summer public-relations blitz against Ottawa’s wireless policies, adding it only served to anger consumers.
“We’re actually feeling quite bullish about the go-forward and including possibly the CRTC regulating elements of the industry, specifically roaming and tower sharing, which would be very significant for us,” Mr. Lacavera told The Globe and Mail’s editorial board on Monday.
BCE Inc. owns a 15-per-cent stake in The Globe and Mail.