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Report On Business Wireless startup TNW launches CRTC challenge amid competition concerns

Innovation Minister Navdeep Bains, seen at an event in Ottawa on May 8, has voiced concerns over high wireless prices and ordered the CRTC to revisit its ban on ‘permanent roaming.’

Sean Kilpatrick/THE CANADIAN PRESS

An upstart wireless provider with a small network in far-flung parts of British Columbia and the Yukon is asking the federal telecom regulator to help it sign roaming agreements with BCE Inc. and Telus Corp., saying it wants to offer lower-priced cellphone service.

TNW Wireless Inc. filed an application with the Canadian Radio-television and Telecommunications Commission this week, arguing that use of the BCE or Telus networks when WiFi is not available would not amount to "permanent roaming," which the regulator banned in a March decision.

TNW's application comes after federal Minister of Innovation Navdeep Bains voiced concern over high wireless prices and ordered the CRTC in June to revisit the March ruling and "reconsider the WiFi-first model," in which users rely primarily on WiFi (whether at home or in public) to make phone calls and access the Internet and "only fall back on a commercial wireless network when customers are out of WiFi range."

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Mr. Bains said at the time that he still supports the idea of encouraging telecom providers to invest in building their own networks, but he wants the CRTC to reconsider the WiFi-first model because "we're saying through enabling technology, we want to see more investment, more competition."

Jean-Pierre Blais, the former chairman of the CRTC, also recently raised concerns about the industry, saying in a speech just before the end of his term last month, "Unless things change, the CRTC will need to act to increase wireless competition, which will in turn deliver lower wireless retail rates, raise data caps and spur further innovation."

Nonetheless, the commission's ruling in March – when Mr. Blais was still chairman – shut down the business model of Sugar Mobile, a company that offered a cheap wireless service relying primarily on WiFi access plus a roaming agreement with Rogers Communications Inc., which Sugar's sister company Ice Wireless had for its cellular network in the northern territories.

That sounds a lot like the business model TNW hopes to pursue, but president Lawry Trevor-Deutsch insists his company's technology is different and plays by the existing CRTC rules because it connects to regulated spectrum – cellular airwaves – TNW owns in B.C. or the Yukon to complete every phone call whether over WiFi or roaming on another carrier's network.

"We're not another Sugar Mobile," he said in an interview on Wednesday, saying the TNW technology is an application installed on a smartphone that disables the device's built-in dialling features and that it also disables access to a roaming partner's network when customers have WiFi access.

"This is not a technicality or a back door. This is a front door using technology that we developed … This is a matter of public policy – it's a matter of competition," he said, adding the company is asking for a ruling from the CRTC on its compliance with the rules, which force the Big Three to provide roaming services at fixed rates to small carriers that operate their own networks.

TNW recently moved its head office to Toronto from Vancouver where another small telecom provider, TNW Networks Corp., is embroiled in an insolvency proceeding (it is not under court protection but is involved in a legal process covering other companies with which it does business). Mr. Trevor-Deutsch said that while many of the same people are involved with that company, TNW Wireless is a separate entity. Both TNW Wireless and TNW Networks were recently acquired by Miami-based United American Corp.

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For its part, Telus says TNW hasn't provided "sufficient information to confirm TNW Wireless's eligibility under the current rules governing the mandatory roaming service that it is requesting," adding in a statement from spokesman Richard Gihooley: "We look forward to responding to TNW Wireless' application and participating in the CRTC's upcoming review of the rules, as directed by the federal government."

BCE declined to comment on "plans by other companies," but spokesman Mark Langton said "we will participate in the upcoming CRTC proceedings on the broader issue of WiFi-first carriers later this year."

TNW's application is open for replies until Aug. 4, but it – as well as the broader WiFi-first review – comes at a time when the CRTC lacks permanent leaders in key roles. Mr. Blais left in mid-June and the government appointed Judith LaRocque as interim chair for four months; the position of vice-chair broadcast has been vacant since November, 2015; and Peter Menzies, vice-chair of telecom, has announced plans to depart his post one year early on July 15.

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