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A CRTC logo is shown in Montreal on September 10, 2012.Graham Hughes/The Canadian Press

Canada's telecom regulator begins a public hearing Monday that some industry experts say could result in some of the biggest changes to the wireless sector in almost a decade.

At issue in the proceedings before the Canadian Radio-television and Telecommunications Commission is the health of the market for wholesale roaming services – the rates cellphone carriers charge other wireless companies when their customers roam outside of their home networks.

The commission is not examining what consumers pay to roam on other company networks. But changes in the wholesale market can affect what smaller carriers charge at the retail level because they rely on larger company networks and typically pass the cost of expensive roaming agreements on to customers.

Quebecor Inc. has pegged roaming rates as a key factor in whether it will proceed with a national expansion of its mobile business, and other new entrants say roaming is central to their ability to compete.

The week-long hearing in Gatineau, Que., will hear from a range of people on the issue, including company executives, academics as well as consumer and industry groups. They will also outline their positions on cellphone tower-sharing among carriers and the possibility of expanding the wholesale market even further by opening it up to players without their own wireless networks.

Since the mid-1990s, the CRTC has refrained from setting rates in the wireless industry on the basis that it is sufficiently competitive. This hearing will help the commission determine whether that remains true for the wholesale market and, if not, whether it should shift its policy and regulate rates directly.

Jeff Fan, a telecom analyst with Scotia Capital Inc., says it is widely expected the CRTC will set wholesale rates and he believes the specific amount, whatever it is, will be sufficient to encourage a sustainable fourth player to take on the Big Three carriers, a key policy for the federal government.

"This, to me, is the most important wireless regulatory decision that we have seen in the last seven years," Mr. Fan said, referring to Ottawa's decision in 2007 to set aside airwaves specifically for new entrants to the market in the spectrum auction held the following year. "This is going to eventually have an impact on market structure."

As part of its policy to encourage competition in the wireless sector, Ottawa made roaming and tower sharing mandatory after the 2008 spectrum auction. But it left the terms of that sharing subject to commercial negotiation, a situation the new entrants claim has led to unreasonably high rates.

Players with networks covering only certain provinces, or cities, may offer comprehensive voice and Internet packages for in-area coverage. But they say they can't be competitive because they have to charge higher per-minute, or per-megabyte, rates for customers to get service outside the company's networks.

On the other hand, national carriers BCE Inc., Rogers Communications Inc. and Telus Corp. say there is plenty of competition and further regulation would only stifle network investment.

The federal government has already targeted this area of the wireless market. In June, it passed legislation capping the rates carriers can charge on a wholesale basis at no more than what they charge their customers at the retail level.

The commission issued a related decision in July, banning "exclusivity clauses" in wholesale agreements. For technological reasons, Rogers used to be the only incumbent that new entrant carriers could turn to for roaming, and the CRTC said it charged Canadian startups more than it charged U.S. carriers.

Toronto's Wind Mobile and Halifax-based Eastlink have reduced roaming rates or expanded their network coverage in the wake of the government's interim caps but they say more could be done.

Cogeco Cable Inc., which offers cable and Internet services but does not have a mobile network, is set to appear Monday and ask the commission for rules mandating access to large players' spectrum and cell towers, which could give it the ability to offer wireless services without building a full cellular network.

Montreal-based Cogeco – along with the Canadian Network Operators Consortium which represents smaller Internet service providers – is asking for rules supporting what is known as a mobile virtual network operator model. That would represent a shift away from the industry's current focus on competition among players that have built their own wireless networks.

BMO Nesbitt Burns Inc. analyst Tim Casey said in a recent report he does not believe the government is likely to move away from this "facilities-based" approach at this time.

Representatives from the Competition Bureau as well as new entrants Wind and Mobilicity are also scheduled to appear Monday.

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