Ottawa has to step in to ensure new carriers will have to only pay reasonable roaming fees to incumbents, says a telecom consulting firm. Read why Rogers says it isn’t needed, while two new carriers say it’s a necessity
With wireless data increasingly important to handset, laptop and tablet users, a telecommunications consultancy is urging the government to ensure new carriers aren’t ransomed by incumbents when negotiating roaming terms for the next generation of wireless technology.
“If we don’t sort out the data-roaming paradigms, if we don’t establish new ground rules, the incumbent network advantages may be used to restore the incumbent hegemony and destroy any hope of competition in the market,” warns SeaBoard in a just-released report. “The issue is important, and it is urgent.”
New carriers like Wind Mobile, Mobilicity, Videotron and Public Mobile with small networks depend on roaming deals with established carriers so subscribers can use their devices across the country.
Industry Canada told the incumbent carriers they had to strike voice roaming deals with the new entrants who bought AWS spectrum in 2008 to protect their subscribers (though the government left the carriers to negotiate prices).
However, there aren’t any rules yet to protect spectrum buyers in upcoming auctions. In particular, says SeaBoard, there aren’t rules mandating roaming for data.
The AWS roaming obligation only lasts for five years, the report adds, with no plan yet on what will happen when the time’s up.
This will be particularly important when the government auctions off spectrum in the 700 Mhz band, which is ideal for deploying the ultra high-speed fourth generation (4G) wireless technology called Long Term Evolution (LTE).
SeaBoard fears incumbents like Rogers Communications Inc., BCE Inc.’s Bell Canada and Telus Corp. will make ‘take it or leave it’ offers to the new entrants.
All of the new entrants have roaming agreements, although they won’t say with which carrier.
However, it is believed that for technology reasons Wind, Mobilicity and Videotron had no choice but to sign with Rogers. Its GSM network is the only one in Canada that could handle their AWS-based devices in non-urban areas outside the new entrants’ coverage.
The European Union has already decided to cap roaming prices, SeaBoard notes, while the U.S. Federal Communications Commission has made noises about stepping in to the private market.
Industry Canada should mandate data roaming as it has voice roaming, SeaBoard says, toss out the five-year limit and set up an arbitration process to kick in if a new carrier and an incumbent can’t come to a data roaming agreement within 60 of negotiating. The present manditory arbitration process kicks in if the two sides can’t agree after 60 days of talks. (An earlier version of this story wrongly said the existing arbitration process isn’t manditory.)
In addition, it says the government should start looking at creating a wholesale pricing regime – as there is now for Internet carriers – to bring some stability to data roaming pricing.
All this didn’t sit well with Ken Engelhart, vice-president of regulatory affairs at Rogers. “The current rules work just fine,” he said Monday. “All of the parties [new carriers] signed roaming agreements. They never went to arbitration.”
Forcing carriers into arbitration after 60 days is “ridiculous,” he said.
As for the argument that without data roaming rules incumbents will destroy the new entrants, Engelhart said “there’s absolutely no evidence for such a preposterous position.”
The report, he said, is “unnecessary and alarmist.”
Not surprisingly, it was backed by executives from Mobilicity and Wind Mobile. Stewart Lyons, chief operating officer of Mobilicity called it “right on the money.”
For confidentiality reasons he wouldn’t identify which Canadian incumbent carrier his company signed a roaming agreement with, but said Mobilicity had its back to the wall during the negotiations.
As a result, he said, all of the new entrants “face fairly punative charges,” which are either passed on to subscribers or swallowed by the carrier.
“We’re paying a healthy sum to be able to use an incumbent’s network,” complained Wind Mobile chairman Anthony Lacavera in an interview Monday. “The current setup does not work significantly for us.”
In particular he complained that incumbents force a “hard handoff” when new carrier subscribers roam onto an incumbents’ network – meaning the call is dropped. The subscriber can get use an out-of-zone network, but only by re-dialing.
“I would imagine that without being mandated, the incumbents are going to resist sharing their high-speed [wireless] data networks,” he said.
Asked what he’d do if he were an incumbent carrier, Lacavera said he wouldn’t be reason to be “protectionist.” A reasonable wireless roaming deal would increase data usage by a new carrier’s subscribers, he said, thus earning the incumbent carrier more revenue.
But “they just do these tricks and gaming of the system to unfairly advantage themselves.”
Industry Canada will issue rules for the upcoming auctions later this year.Related Download
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