Canadian Telecom Summit: Startup calls for Ottawa to impose roaming caps, stop subsidizing big carriers for rural wireless rollouts

Mobilicity calls for shake-up in wireless industry
 

Ottawa has to follow Europe’s lead and put a cap on international wirelesss roaming fees to bring down the cost of using cellphones out of the country, says the head of a start-up wireless carrier.

It was one of four proposals Mobilicity executive chairman John Bitove made Tuesday to the Canadian Telecom Summit as ways of shaking up the industry.

He also called for the federal government to allow wireless application developers to sell flow-through shares in their companies the way mining companies can, for Ottawa to speed bringing wireless to rural areas and for the merging of Industry Canada’s power over wireless spectrum with the Canadian Radio-television and Telecommunications Commission (CRTC).

“Open and transparent roaming charges are required today,” Bitove said. “Let’s face it, we’ve all been ripped off” by high roaming fees, “and its always after the fact we find out.”

A roaming fee is charged by a carrier when a cellphone from another carrier accesses its wireless network – for example, if a Mobilicity subscriber roams in the U.S. or Britain. 

In 2007 the European Commission imposed the equivalent of a 14 cent a minute roaming cap on international wireless roaming calls, Bitove said, a fee which next month drops to 10 cents a minute.

Bitove is the majority shareholder of the private company that controls Mobilicity.

In an interview after the speech Bitove said the federal government should want to impose roaming caps “because they know there’s egregious charges put on by carriers that take advantage of the fact that somebody doesn’t know what they’re doing when they’re roaming.”

When asked why if the government knows the charges are outrageous it hasn’t announced a roaming cap policy, Bitove said he doesn’t know.

“But that doesn’t mean you don’t stop bugging them about it,” he added.

 In an interview later at the conference, Industry Minister Christian Paradis said the department is still consulting with carriers on roaming policies and will consider all proposals.

Bitove also called on Ottawa

–to allow mobile application developers to be allowed to sell flow-through shares in their companies as a way of raising funds. Briefly, investors would get to use the expenses deducted by developers. Oil, gas and mineral companies can do the same. It would require Parliament to change tax laws.

But its necessary because mobile applications are the way of the future, Bitove said. “We need to become leaders in financing technological innovation,” he told the conference.

“We need a national strategy to make sure we have a thriving (app developer) industry in the future.”

It would “put Canada on the map as an app incubator,” he said.

–to merge the government ownership of wireless spectrum – now in the hands of Industry Canada, which decides when and how much spectrum will be sold to carriers – and the regulation of aspects of wireless – now in the hands of the CRTC.

In the U.S., both are in the hands of the Federal Communications Commission (FCC), and independent regulator like the CRTC.

Bitove doesn’t care whether Industry Canada or the CRTC has the power. But he notes Canada is the only industrial country that splits the two responsibilities.

Paradis said he didn’t hear Bitove’s argument and had no opinion.

–to give up subsidizing incumbent wireless carriers to bring wireless service to rural communities. “Big carriers are among the most profitable organizations in the country,” he said. “They don’t need any more gifts, least of all from taxpayers.”

Startup wireless companies have trouble getting incumbents to agree to lease antenna space on the towers the incumbents build, he added.

Instead, Bitove said Ottawa should put money into so-called public-private partnerships, where a consortium of real estate or tower construction companies buy the land and build towers, and then lease space to any carrier.

That approach would bring wireless broadband to rural areas faster, and would probably make the partners money, Bitove argued.

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