Canada watchdog urges limits on wireless roaming rates

OTTAWA Wed Jan 29, 2014 3:31pm EST

OTTAWA Jan 29 (Reuters) - Canada's competition watchdog urged the country's telecoms regulator on Wednesday to get tough on big wireless companies that charge high roaming rates for smaller rivals struggling to get a toehold in the domestic market.

The Competition Bureau, an independent law enforcement agency, submitted its views to the Canadian Radio-television and Telecommunications Commission (CRTC), which is studying whether there are unfair practices in wholesale mobile wireless roaming arrangement in Canada.

"The Bureau believes that Canada's largest wireless companies have an incentive to use high mobile wireless roaming rates to ensure that new entrants are not, and do not become, fully effective competitors," it said in a statement.

"As a result, new entrants are likely limited in their ability to bring attractive product offerings to market, resulting in reduced product choice, higher prices for consumers and/or less innovation in Canadian mobile wireless markets," it said.

The bureau said it was "necessary and appropriate" for CRTC to intervene with regulatory safeguards against high rates charged by the three national carriers, Rogers Communications Inc, BCE Inc and Telus Corp.

Newcomers to the Canadian wireless market don't have a lot of spectrum or wide-scale networks, so they must enter into agreements with the established service providers.

The Competition Bureau did not propose specific measures, but its view is similar to those of the Conservative government. Industry Minister James Moore is set to introduce legislation this spring that would force the Big Three to charge their competitors no more than the rate they charge their own retail customers.

The government's rules, which it says aim on boosting competition and lowering prices for consumers, would remain in place until CRTC decides whether to limit roaming rates.

Small players have so far found it hard to survive in Canada. One of them, Public Mobile, was acquired by Telus, and another, Mobilicity, is under creditor protection as it seeks a buyer.

Earlier this month, Globalive's Wind Mobile withdrew from a major Canadian auction of wireless spectrum, saying its main backer, Europe's Vimpelcom Ltd, decided not to fund its participation.

Rogers has said its domestic roaming agreements with rivals are based on negotiated rates and that new entrants have not made use of a dispute arbitration process.

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