GATINEAU – Rogers Communications refuted accusations of charging unjust wholesale rates for Canadian wireless carriers and denied undue preference for U.S. Wireless carriers in its 32-page reply to the CRTC’s proceeding investigating domestic wholesale wireless roaming rates.
The Commission is investigating whether there has been discrimination in higher wholesale rates charged to domestic wireless companies while American carriers receive preferential deals.
The CRTC received interventions and replies over the past two weeks from Bell Canada, Quebecor Media, Telus, EastLink, Wind, Public Interest Advocacy Centre (PIAC), Benjamin Klass, Canadian Network Operators Consortium Inc. (CNOC), Commissioner of Competition, Fibernetics, Lynx Mobility Inc., MTS Allstream, Michael Kedar, Mobilicity, Lynx Mobility Inc., MTS Allstream, Sasktel, Vaxination Informatique.
(Cartt.ca has reported on the original submissions and Wind’s reply here and here)
The Rogers reply states that there are valid commercial reasons why the wholesale rates are not the same for Canadian and U.S. carriers because the roaming relationships are significantly different, “such as whether the relationship is one-way or bilateral; whether the relationships is international or domestic; the value of the real options afforded the contracting parties; the geographic scope or uniqueness of roaming coverage offered by the other party; the expected volume of traffic; technologies; the date the agreement was reached; and in the case of domestic agreements, whether or there is a broader relationship between the parties such as joint build.”
Eastlink, a new entrant in the wireless market, has built a brand new 4G network in Atlantic Canada, but says its success depends on the company’s ability to “access the incumbents’ national wireless networks at commercially reasonable wholesale rates would allow us to provide competitive service plans and coverage, so that we can build our customer base.”
“Eastlink submits this argument is nonsensical as all roaming telecommunications services are inherently one-way services.”
Eastlink is not buying the incumbents’ claims that that since they were providing bilateral roaming serviced to U.S.-based providers and unilateral roaming service to new entrants, the telecommunications services were not the same. “Eastlink submits this argument is nonsensical as all roaming telecommunications services are inherently one-way services.”
Rogers points out that some of the Canadian carriers have wrongly tried to compare Rogers’ wholesale rate with Rogers retail pricing, citing Wind and Eastlink. “This comparison with retail rates is completely asymemetric, ” reads the Rogers reply. “The analysis includes the avoided costs that tend to push wholesale prices down, but omits the avoided benefits that would, on the contrary, push wholesale prices up. In sum, a retail customer generates a revenue stream above and beyond the retail marginal rate that the new entrants calculated.”
Rogers also takes issue with the submission from the Commissioner of Competition, who stated: “based on the information contained in the Call for Comments, there is differential treatment occurring in the contractual terms of roaming agreements that constitutes discriminatory or preferential behaviour” which is “unfair discrimination and an undue preference” because it has “the potential to adversely affect competition.”
Rogers points out there is no competitive analysis or evidentiary information to back the Commissioner’s position, and that his current assessment is inconsistent with his previous positions and analytical framework from previous proceedings.
The company (which provides all of the domestic roaming in Canada to each of the wireless newcomers) argues that the regulatory framework for the provision of wholesale roaming already exists, and that framework, created by Industry Canada “with the benefit of detailed comments filed by the Commissioner on the appropriate analytical approach to use to assess and structure regular regulatory intervention – not only precludes a denial of access to wholesale roaming services, but it also requires that wholesale roaming services be provided at commercial rates for similar roaming services. The framework also mandates expeditious binding arbitration if agreement on commercial rates is not achieved,” reads the Rogers reply.
Arbitration is not one of the recommendations from the Public Interest Advocacy Centre, which requested the Commission make a finding of unjust discrimination and develop a framework for the wholesale regulation of roaming rates on a cost recovery basis. “Canadians would benefit from a competitive mobile wireless market that offers a range of significantly different services and packages at affordable rates within a broad geographic reach,” reads its reply.
The Commisssion will rule on the proceeding within four months of the close of the February 10th replies deadline.
