Big cellphone providers will be regulated for selling their wireless services

WATCH: In what appears to be a breakthrough for demanding more competition for wireless service providers, the CRTC will regulate roaming rates the big three companies — Bell, Rogers and Telus — charge the smaller companies. Mike Drolet explains.

Smaller, regional phone providers are getting a boost from the Canadian Radio-television and Telecommunications Commission (CRTC) that decided to regulate wholesale mobile services on Tuesday.

For the 28 million Canadians who subscribe to text, voice and data services this means that the competitive cellphone market should become more competitive in the future, but for the time being this change will not affect your monthly bill.

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In the business of wireless cellphone services, there are the “Big Three” national providers – Rogers, Telus and Bell – then there are the smaller providers in regions across Canada, like Wind, Eastlink, or Videotron. If a customer who subscribes to a regional company leaves their area, their network service begins roaming on other wireless networks.

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How does roaming affect cellphone companies?

Roaming fees can be costly for any consumer, but if they subscribe to a smaller cellphone service the fees can be much higher than if they subscribed to one of the Big Three. Why is that? Smaller providers have to rent spectrum, or wireless airwaves, from towers across the country so their customers don’t lose service when they travel.

The problem is that smaller companies have been complaining that the Big Three are charging them unfairly, and they are often paying even more than what customers of Rogers, Telus or Bell pay for roaming. Some companies said that even U.S. companies were being charged less than they were.

In 2013, the CRTC began studying the issue, and in February 2014 it began the formal process of consultation with cellphone providers in Canada. In the meantime, the government enforced a cap on wholesale wireless roaming rates, until the CRTC came up with a decision on what to do.

What did the CRTC find?

They found there is an insufficient level of competition between the Big Three providers in wholesale roaming services. To encourage “sustainable competition, innovation and investment” the CRTC will regulate the rates for selling wholesale roaming.

What changes will the CRTC implement?

Starting on Tuesday, Bell, Rogers and Telus will have to follow the interim rates for what they can charge smaller cellphone companies set by the CRTC. The rates at the same level or lower than the cap previously set by the government. By November 4, 2015, the Big Three will give their proposed rates to CRTC, and if the suggested rates are too high the CRTC can refuse them. Eventually, a more permanent rate will be decided on after November, and that rate will be set for the next five years.

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What won’t change?

Seamless roaming won’t be included. Basically, dropped calls will continue to be a thing. Also, mobile virtual network operators will not be considered under the regulations.

The future?

Right now, it will only affect the way the Big Three work with the smaller cellphone companies. The CRTC’s decision is meant to reduce barriers to smaller companies by removing restrictions in wholesale roaming agreements with the bigger companies. This could encourage smaller companies to expand on a national scale, resulting in more competition in the market. By then, Canadians can expect the competition to lower prices.