Videotron impatient at pace of talks with Bell, Telus, Rogers

The new AWS spectrum holders have only started negotiating with incumbent cellphone carriers over antenna sharing and roaming agreements and already at least one is impatient.

Industry Canada this week issued the final rules under which the fledgling wireless licence holders can seek arbitration if they can’t strike deals with incumbent cellphone carriers, and the procedures have come none too soon for Quebec cableco Videotron.

Delays in these negotiations could delay the launch of new cellular companies, three of whom say they want to be selling service as early as the fall of 2009.

“So far we have experienced very limited co-operation from the incumbent carriers” in early talks, Isabelle Dessureault, a Videotron spokesman, complained Tuesday. Bell Canada, Telus and Rogers Communications “have been very slow in terms of answers” to questions about the availability of space on their antennas and roaming on their networks, she said.

“If this lack of co-operation continues, we will not hesitate to make recourse to the arbitration process.”

A spokesman for Rogers could not be reached for comment.

Spokesmen for BMV Holdings, another announced new entrant, declined to comment for this article. To help keep the startup costs of new entrants down after the billions of dollars they spent on licences at last summer’s AWS spectrum auction, Ottawa has ordered incumbent carriers to share where possible antennas and building sites with their new competitors. The arbitration process announced this week is a route either side can turn to if talks drag out.

The fact that they may be going slowly already should not be a surprise, say industry analysts, who note that Bell, Telus and Rogers understandably don’t want to make things easy for startups looking to take customers and income from them.

In fact, one of them, Globalive Communications CEO Anthony Lacavera, acknowledged Tuesday that in talks with his group the incumbents “are not doing anything that I wouldn’t be doing if I were on the other side of the table.” Lacavera agreed “foot-dragging” is one way to describe what he’s facing.

“They’re going to use every ambiguity in the final rules they can,” he said. But in an interview he tried to be positive. He believes somewhere between 20 and 40 per cent of the network Globalive hopes to build needs to be shared on incumbent antennas. But if it’s the smaller figure, he added, Globalive could almost do it alone. He also believes that due to existing agreements “there’s no a lot of wriggle room” on the fees which his wireless customers will have to pay for roaming on the incumbents’ networks.

Meanwhile, he added, Ottawa seems to be trying to put the feet of the incumbents to the fire by limiting the time an arbitration process will take to 90 days.

That impressed Iain Grant, managing director of the SeaBoard Group, a Montreal-based telecommunications consultancy. “Those time horizons are quite tight,” he said in an interview. On the other hand, he noted there are some 9,000 towers across Canada and if incumbents want to fight over every one it will eat up a lot of time.

If that happens, he added, Industry Canada might take advantage of another rule – its power to change the rules.

Still, he believes incumbents have already erected their defences. The rules say incumbents have to share antennas if there is unused capacity. Grant suspects Bell, Telus and Rogers already have expansion plans to eat up whatever capacity is available to force new entrants to build most of their networks. Bell and Telus, for example, just announced they are co-operating on overlaying their CDMA networks with new GSM/HSPA networks.

As a result he believes there won’t be very much antenna tower or site sharing with the newcomers – and they already know it.

As for roaming deals, Grant said their importance is relative to the target audience of the newcomers. For a company chasing Canadians that have never owned a cellphone, he said, roaming won’t be an important sales feature.

Toronto telecommunications consultant Eamon Hoey, who knows about being in the middle of telecom negotiations, expects “there’s going to be some really busy arbitrators” because incumbents will challenge everything wanted by newcomers. In the 1990s he chaired several mediation committees set up by the Canadian Radio-Television and Telecommunications Commission between phone companies and new long-distance providers after rates were deregulated.

To get respect – and to get the process moving – arbitrators have to fair and reasonable, he said. But, he added, they also have to understand what he called “the art of the coffee. I found that coffee-drinking was a great resolver of a lot of disputes between carriers and users. Sometimes you have to be a horse-trader, but at the end of the day there has to be balance in the way you do things.”

Under the rules for settling antenna and roaming disputes, a single arbitrator will handle each complaint. Each side will submit a term sheet and generally, the arbitrator will choose one position or the other. However, the arbitrator does have the power to pick points from either side. Proceedings will be kept confidential, although arbitrators can show other rulings to parties with sensitive information removed.

Basically, arbitrators should to solve business problems. Technical disputes can be referred to Industry Canada.