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The three national wireless carriers need to cut the price of their mid-tier plans by 25 per cent over two years or face further regulatory action, the federal government says, as it lays out the details of its promise to reduce cellphone bills.

Ottawa is demanding that BCE Inc., Rogers Communications Inc. and Telus Corp. substantially lower the prices of unlimited talk-and-text plans that offer two gigabytes, four gigabytes and six gigabytes of data.

That means a two-gigabyte plan would go down to $37.50 a month from $50, while a six-gigabyte plan would go down to $45 from $60. The government said it used prices advertised on the carriers’s websites in early 2020 for plans that don’t include device costs for its benchmarks.

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Navdeep Bains, the Minister of Innovation, Science and Industry, said the government is targeting mid-tier plans because their prices haven’t come down as much as those at the low and high ends of the market. During the past election campaign, the Liberals promised to drop wireless rates, saying Canadians were concerned about high prices.

“We’ve seen progress … but more needs to be done,” Mr. Bains said in an interview Thursday.

If the carriers fail to meet the government’s targets within two years, Ottawa is prepared to take regulatory actions, Mr. Bains said. That could include, he says, forcing carriers to open their networks to wireless resellers – referred to in the industry as mobile virtual network operators, or MVNOs – something that the Canadian Radio-television and Telecommunications Commission was considering during hearings that wrapped up last week. The actions could also include using spectrum policy to encourage more competition. (Spectrum refers to the radiowaves used to send wireless signals.)

The government also said it will begin reporting on wireless prices every quarter for the next two years to monitor progress.

Although the carriers have pointed out that prices have come down in previous months, Mr. Bains has said that the 25-per-cent reductions he has been mandated to achieve are on top of those declines.

BCE spokesperson Marc Choma said the company will study the government’s direction but added that “policies discouraging investment, including regulating wireless pricing or continuing to deny fair access to spectrum for all competitors, put jobs and innovation at risk.”

“It’s the worst time to jeopardize our country’s wireless success as carriers look to ramp up investment for the global move to 5G wireless,” Mr. Choma said in an e-mail.

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And Telus spokeswoman Jill Schnarr said it’s “extremely disappointing” that only national carriers are being asked to reduce their prices.

“This is yet another punitive action taken by this government against the companies that have built Canada’s global-leading wireless networks – and which are being asked to invest billions of dollars to ensure Canadians can benefit from next-generation 5G technology,” Ms. Schnarr, vice-president of corporate communications, said in a statement. The government’s course of action jeopardizes hundreds of thousands of skilled jobs across the country, she added.

Also on Thursday, Innovation, Science and Economic Development Canada (ISED) announced the rules for its coming auction of 3,500 MHz spectrum, a key band for the deployment of fifth-generation wireless technology. The spectrum will be for mobile or fixed wireless services.

Although 200 MHz of spectrum will be made available in the auction, slated for December, ISED will be setting aside 50 MHz for smaller and regional competitors in those markets where enough spectrum is available. The policy is intended to bolster regional competitors that have been credited with driving down wireless prices.

Regional providers such as Shaw Communications Inc.'s Freedom Mobile, Quebecor Inc.'s Videotron and Bragg Communications Inc., which operates as EastLink, offer prices as much as 45-per-cent lower than those of the national carriers, according to a pricing study published by ISED on Thursday.

The study, which was originally conducted in May and June of 2019 by Wall Communications Inc., found that the prices of most wireless plans declined last year compared with 2018, with the largest drops – in one case, nearly 10 per cent – occurring at the high and low ends of the market. Meanwhile, mid-tier plans were relatively flat.

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However, over the following months, the national carriers introduced new unlimited data plans that slow down customer browsing speeds when they hit their data limits, instead of charging hefty overage fees, and revised their other plans. As a result, the average price of a two-gigabyte plan fell by roughly 30 per cent between May and June to $53.48, while the average cost of a five-gigabyte plan fell by about 24 per cent to $66.55.

Canadian Wireless Telecommunications Association president and chief executive Robert Ghiz said the data shows that wireless prices are coming down amid a “very competitive and active marketplace."

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