Canadian government to begin regulating domestic roaming rates

It was intimated during Prime Minister Harper’s Throne Speech in October, and reiterated during an interview by Industry Minister, James Moore, and today the government is delivering on its promise to regulate roaming fees.

Pushing back against the aggressive nature of the Big Three telcos, the Canadian government is set to alter the Telecommunications Act to cap domestic roaming fees. “The roaming rates that Canada’s largest wireless companies are charging other domestic providers can be more than 10 times what they charge their own customers,” said Moore in a press release issued today.

The near-term effect will be the lowering of costs for 2G and 3G service for carriers, such as WIND Mobile and Mobilicity, that piggyback off the incumbents’ existing networks. At the moment, the new entrants are limited to 2G service in areas their own cell towers don’t reach because reasonable prices could not be obtained for higher-speed 3G networks.

Moore, who replaced Christian Paradis as Industry Minister in July, previously noted that Canadians have been “hit in the face pretty hard” with roaming fees, both domestic and international, and planned to work with the CRTC to affect the necessary regulatory changes.

The specific stipulations of this domestic roaming will be to prevent incumbents from “charging other companies more than they charge their own customers for mobile voice, data and text services.” The release explicitly notes that this move will improve the standing of new entrants in the eyes of Canadians, many of whom don’t consider their coverage truly national due to the sharp downgrade in service quality between Home and Away areas.

This change to the Telecommunications Act will only be in place until the CRTC decides itself what to do about roaming; it’s clear the government doesn’t want to play too heavy a hand in this game.

The government is also amending the Act to allow the various provincial and federal regulatory bodies, such as the CRTC, to fine telcos who don’t follow the rules. For example, if an incumbent does not adhere to all tenets of the Wireless Code of Conduct, they are subject to monetary penalties.

Curiously, the last amendment involves sharing of information between the CRTC and Competition Bureau “so that consumers benefit from greater cooperation.” The CB is a branch of the federal government, so it’s unclear what direct benefits this will have for consumers.

Simon Lockie, Chief Regulatory Officer for Wind Mobile, is pleased with the government’s move. “This is an important step in the right direction for those, like WIND, who believe Canadians deserve true choice and competition in wireless,” he said. “Today’s announcement shows that Prime Minister Harper’s Government is serious about competition and serious about consumers.”