Ottawa moves to aid smaller wireless carriers

Above: The Conservatives made good on a promise to consumers, capping the rates bigger mobile phone carriers charge their smaller rivals to gain access to networks. Mike Le Couteur explains what it could mean for consumers.

The federal government announced Wednesday plans to force big wireless carriers to dramatically lower rates they charge smaller carriers to let customers access their bigger cell networks, known as domestic roaming.

Ottawa also said it is granting regulators new powers to hand out financial penalties to carriers like Rogers, Bell and Telus if they break the rules.

Customers of the new carriers sometimes find themselves outside the coverage areas of the carrier. Their phones still work however by patching into the bigger networks in the area owned by either Rogers, Bell or Telus who in turn charge the smaller operators for the access.

“The roaming rates that Canada’s largest wireless companies are charging other domestic providers can be more than 10 times what they charge their own customers. For too long, Canadian consumers in the wireless sector have been the victims of these high roaming costs,” Industry Minister James Moore said.

“Canadians have been clear that they want their government to take action in the wireless sector to provide more choice, lower prices and better service. With domestic roaming rates on networks capped, Canadian consumers will benefit from more competition in the wireless market.”

Moore said the government would make legislative changes in the coming weeks to limit roaming rates at the same level that the big operators charge their own customers.

The measures will be in place until the industry’s regulator, the Canadian Radio-television and Telecommunications Commission concludes its own investigation and makes a ruling.

Moore said the government will also give the CRTC and Industry Canada the option to impose monetary penalties on companies that “violate established rules such as the Wireless Code and those related to the deployment of spectrum, services to rural areas and tower sharing.”

Ottawa has attempted for years to create market conditions that would see viable alternatives emerge in the wireless sector that could compete with Rogers, Bell and Telus. A slew of new carriers launched services four years ago to much fanfare but, with the exception of Videotron in Quebec, the group has struggled to win enough market share to make any viable on their own.

Mobilicity is undergoing a sale now, while Wind Mobile’s foreign backer has expressed interest in selling the unit. Public Mobile, a third carrier, was acquired by Telus in a minor deal earlier this year.

The government has blocked the big carriers from acquiring the airwave licences owned by Wind and Mobilicity.