GATINEAU – It doesn’t matter what the recently amended Telecommunications Act says regarding rate caps for wholesale roaming, the CRTC still has a duty to forbear from regulation if it determines there is sufficient competition to protect the interests of users, according to Bell Canada.
The company argued in its appearance during the wholesale wireless services proceeding earlier this month and in its undertaking filed last week that the Telecom Act still gives the Commission the authority to forbear from regulation, and it can do so when there is evidence to support it. The Act was amended in the Conservative government’s 2014 Budget Implementation Act (BIA). It added number of new sections to telecom legislation, but most importantly imposed maximum rates that host network providers can charge wholesale roaming customers.
“You actually have jurisdiction under the Act, I dare say a duty, to come to your decision based on the evidence you have before you despite what Section 27.1 says, so I'm giving you a legal answer,” Mirko Bibic, executive VP and chief legal officer at Bell, said in response to a question from Commissioner Candice Molnar. “So for example, if you assess, based on the record – and I would submit that the record clearly shows that there is no need for wholesale rate regulation – Section 34 of the Act says you actually must continue to forbear.”
CRTC chair Jean-Pierre Blais wondered later in Bell’s appearance if the company was asking the Commission to question the new law. “So, in a sense, you’re asking us to second-guess that legislation, aren’t you?”
Bibic acknowledged that the BIA brought changes to the Telecom Act, but said the Act still has provisions requiring the Commission to exercise its authority on forbearance.
“You actually have jurisdiction under the Act, I dare say a duty, to come to your decision based on the evidence you have before you despite what Section 27.1 says.” – Mirko Bibic, Bell Canada
“Section 27.1 does not, as I mentioned earlier, in response to Commissioner Molnar’s question, remove your jurisdiction and your authority to decide the issue before you based on the evidence before you. What we’re putting forward as a position is that the overwhelming preponderance of the evidence is that no additional wholesale regulations need to be put in place,” he said.
Bell filed an undertaking that provided a more fulsome response to the question of the CRTC’s ability to forbear from regulation even in the face of legislated wholesale roaming rate caps. It reiterated that despite new sections of the Telecom Act prescribing maximum rates for wholesale roaming, the Commission retains has authority under Sections 34(2) and 34(3) to disregard them if it determines that the market is sufficiently competitive.
“Where it so finds, the Commission's duty is to continue to forbear. The Commission's duty under section 34(3) is similarly unchanged. Thus, where the Commission determines that continuing to forbear would not be likely to impair unduly the continuance of a competitive market for a service or class, its duty remains to continue to forbear,” argued Bell in the undertaking. “The coming into force of the capped roaming amounts for wireless voice, data and text services set out in section 240(1) of the BIA (now sections 27.1(1), (2) and (3) of the Act) does not change these statutory forbearance powers and duties.”
The company opened its public appearance at the hearing by warning commissioners that policies and regulations that act as a disincentive to network investment will hurt the Canadian economy and Canadian wireless users. Wade Oosterman, president of Bell Mobility, Residential Services and chief brand officer of Bell Canada, pointed to the plight of Europe which has blamed the lack of wireless network investment as contributing to poor economic conditions.
"All carriers, including ourselves, are now reluctant to build outside of city cores and in smaller communities." – Wade Oosterman, Bell Canada
“And the risks are just as high in Canada. The government’s interim price caps take the ‘buy versus build’ network decision that carriers make every day and turn it on its head,” he said. “As a result, all carriers, including ourselves, are now reluctant to build outside of city cores and in smaller communities because very simply, it’s far cheaper to roam on an existing carrier’s network than to expand one’s own.”
(For different points of view, check out our coverage of the hearing here, here, here, here and here)
Bell claims that the federal government’s budget bill has already forced it to stop previous network expansion plans. The company has scaled back network investments in Manitoba and Northern Ontario and decided to roam onto other networks instead, said company executives.
