Regulation threatens network speed, wireless industry says

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The head of Canada's wireless lobby group says unneeded regulation and a lack of available spectrum is jeopardizing the country's status as a place with the fastest networks in the world.

Bernard Lord, president of the Canadian Wireless Telecommunications Association, said the federal government needs to clarify plans to regulate consumers' wireless bills, cut the fees paid by the industry, and allow companies to purchase more spectrum so they can meet the growing popularity of smartphones.

Relations have been strained this year between Canada's wireless companies and Ottawa, which has said it wants to reduce wireless phone bills and foster more competition in the sector.

In its recent Throne Speech, the federal government said it wanted to reduce the charges Canadians pay for using their cellphones and smartphones outside their usual areas. Stephen Harper's government has not said how it planned to do so, leaving the industry and its watchers scratching their heads.

Canaccord Genuity analyst Dvai Ghose last week dismissed the government's proclamation as a "political statement."

Wireless bills are rising because Canadians are demanding better and faster service from their wireless providers as they switch to smartphones and tablet computers, which use more data, said Mr. Lord, who represents BCE Inc., Telus Corp. and Rogers Communications Inc.

Wireless companies spent $37-billion between 1987 and 2011 building their networks, but are facing a 900-per-cent rise in data traffic over their networks between 2012 and 2017, he said.

"In order to be able to meet that demand, that will require significant investment in networks, and if there's uncertainty about those regulations, that can spook investors. And then we could end up with situations where networks get clogged up and Canadians don't enjoy the speed that they want," Mr. Lord told reporters after a speech in Toronto on Monday.

Earlier this year, the large wireless companies complained that a government auction of key spectrum favoured foreign competitors at a time U.S. giant Verizon Communications Inc. was considering entering the Canadian market. Ken Engelhart, Rogers vice-president of regulatory affairs, pointed to the recent application for creditor protection by Mobilicity as evidence the market can only support three major wireless companies, while the government is intent on fostering a fourth.

"Our members certainly are not afraid of competition," said Mr. Lord, who was a Progressive Conservative premier of New Brunswick from 1999 to 2006. "What they don't want is unfair rules that give an advantage to a foreign company."

The Canadian Radio-television and Telecommunications Commission has said it will study whether roaming fees should be regulated. One issue it may consider is a change to the fees that that wireless providers charge to share their towers. The CRTC has historically avoided regulating wireless charges, but lately has taken the view that competition among the big players is not enough to ensure consumers pay fair prices.

The Big Three told the CRTC there was no need to regulate roaming fees, and noted they had already reduced the charges for U.S. roaming.