Cell tower #2

Telus Corp. has urged the federal telecom regulator not to tilt its rules to favour virtual carriers who only rent space on incumbent celluar networks rather than build their own networks.

Telus told a Canadian Radio-television and Telecommunications Commission (CRTC) hearing this morning that to ensure Canadians continue to have some of the world’s fastest cellular networks its regulations should lean towards those who have facilities-based networks.

“Canada’s wireless networks are among the fastest and most reliable in the world,” Telus CEO Joe Natale said in a statement. “Our industry’s investment in Canadian wireless innovation is enhancing lives by keeping people connected to each other and to information, no matter where they are in our country. Canada’s advanced wireless networks are helping drive economic growth for large enterprises and small businesses, providing Canadians with access to better educational opportunities and healthcare outcomes, and improving our country’s global competitiveness. This is no accident; it’s the result of a regulatory framework which has stimulated Canadian telecoms to lead the world in private sector wireless investment.”

The presentation comes at a hearing into whether the commission feels it should step in and regulate the wholesale wireless fees incumbent carriers like Telus charge to smaller competitors. Those rates include what Telus (or Rogers or Bell) would charge virtual operators. Regulating these rates, some argue, will  increase competition in a wireless market dominated by the big three.

At least one presenter at the hearing, Cogeco Cable, will ask the commission to set fees so more virtual operators — like Primus Canada or President’s Choice — can offer cellular service.

Virtual operators are more common in the U.S (although the number has declined in recent years) and in Europe.

But at the hearing Telus offered Dr. Georg Serentschy, the former Austrian telecom regulator and past chairman of the Body of European Regulators for Electronic Communications, who argued there are unintended consequences from helping ‘renters’ over ‘builders.’ It may force lower prices in the short-term, he said, but hurts the long-term sustainability of wireless networks that need require constant investment to keep up with technology changes.

“Europe’s telecoms industry – and its entire digital ecosystem – is suffering because over the last two decades European telecom regulators have created rules intended to keep wireless prices low by stimulating increased competition,” Serentschy said. “As a result, the returns of European operators fell below their costs and they declined to make sufficient network investments. Accordingly, any consumer benefits achieved through regulation were short-lived and ultimately illusory because of corresponding declines in network quality and technological evolution. Fast forward to today, and we see that Europe has many relatively poor-quality networks and consumers and businesses are frustrated on a daily basis by more dropped or failed calls, slower data speeds, poor rural coverage and dramatically less functionality on their smartphones.

The hearing ends Friday.



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