The federal government moved to bolster competition among cellphone providers on Thursday in Ottawa’s latest attempt to keep prices across the country in check and maintain plenty of options for consumers. Here’s a breakdown of what’s changing and why:
What’s happening?
Industry Canada, the government department (along with the CRTC) responsible for maintaining a balanced market place for cellphone services, is extending rules first set out in 2008 to facilitate things like tower sharing between competitors such as Rogers and Wind Mobile as well as network roaming.
Ottawa also says it is taking a more active and watchful eye on both fronts to make sure companies are playing nice with one another, while shortening the time it takes to resolve a dispute.
Why?
In short, to keep the pedal down on competition. Ottawa is worried that without such moves — including a new framework for cellphone contracts that is set to come into effect shortly — prices could climb back to levels seen a few years ago, when fees in Canada were among the highest in the world.
The details
Smaller operators like Wind and Mobilicity have relatively smaller networks compared to Rogers, Bell or Telus. They need to let their customers roam on bigger networks when they are outside the range of the new provider’s own network area.
A rule mandating roaming for new carriers was set to expire next year, but Industry Canada said Thursday it’s making the rule permanent.
Mandated tower-sharing has also been made permanent. The rule was meant to lower costs for the new companies.
Tower-sharing would also speed up their network deployments and lead to a more competitive market place faster.
In practice, however, working out agreements with the Big Three has proved nearly impossible for the new carriers. Industry Canada said Thursday it plans to become more active in making sure carriers share towers.
The Big Three, plus one
Industry Canada also said Thursday it is “taking steps” to make sure there are at least four wireless providers in each region of the country.
Though Rogers, Bell and Telus still control much of the market place, there are currently a number of other options in the majority of areas.
That could change however as early as next year. That’s when the new group of companies that entered the scene a few years ago are eligible to sell themselves to the Big Three.
Though Wind, Mobilicity and Public Mobile have attracted hundreds of thousands of customers between them, they’re still losing tons of money. Analysts say Rogers, Bell or Telus would gladly pay up to acquire those subscribers and eliminate the smaller competitors.
What steps?
Good question. To start, Ottawa says it will closely scrutinize any transfer of operating licenses between competitors.
The licenses are tied to the airwaves each carrier uses to let their customers make calls and send data.
Industry Canada said Thursday it will also hold an auction for new blocks of airwaves in November that will ensure at least some is acquired by a new entrant or party other than Rogers, Bell or Telus, which already hold 85 per cent of available spectrum across the country.
How will all this affect you?
The government hopes these measures will keep pressure on the market place, creating more choice for consumers and ultimately, competitive prices.
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