Gatineau, Quebec
September 29, 2014
Jean-Pierre Blais, Chairman
Canadian Radio-television and Telecommunications Commission
Check against delivery
This week, the Commission will examine the wholesale wireless mobile services market in Canada.
This is the second of three major hearings that the Commission is holding this fall. Earlier this month, we held a hearing on the future of television in Canada. In November, we will review the regulatory framework for wireline wholesale telecommunications services. This will include an examination of whether to allow competitors access to the incumbent companies’ fibre-to-the-home facilities.
The thread that runs through these three proceedings is choice and sustainable competition.
The Commission is reviewing its frameworks with its eyes firmly fixed on the future. We are seeking to ensure that Canadians are able to benefit from a world-class communication system for years to come. One in which they have access to compelling content, as well as the choice of innovative wireless services and Internet services, wherever they live in Canada.
Mobile wireless services
Last week, we released the section of our Communications Monitoring Report that provides data on the telecommunications sector. According to the latest figures, there are now more than 28 million wireless subscribers in Canada. In 2013, mobile wireless services generated total revenues of $21.2 billion.
Mobile wireless services make up nearly half of all telecommunications revenues, which is an indication of their importance to the marketplace and the Canadian economy.
How Canadians use mobile devices is another indication. With access to broadband wireless services, they can search for information, watch pre-recorded and live programs, listen to music, share content, conduct business, apply for government services, track their child’s immunization schedule and even pay for coffee—all thanks to their mobile devices.
The retail market offers Canadians a variety of wireless devices, plans and packages. The CRTC’s wireless code ensures that consumers can make informed choices about the services and companies that best meet their needs. It also protects Canadians from undue roaming and data bills and excessive cancellation fees.
Wholesale mobile wireless services
The purpose of the hearing that is getting underway today is to take a closer at the wholesale market for mobile wireless services. This market consists of the arrangements between wireless service providers to provide services, such as roaming and tower sharing.
In 2013, we began to gather facts about the rates, terms and conditions associated with wholesale wireless roaming arrangements. A task force was created within the Commission to analyze this data, which then led us to launch a public consultation. The purpose of this initial consultation was to examine whether certain wireless companies were subjecting their smaller Canadian competitors to unjustly discriminatory rates, terms and conditions for roaming services.
In addition to finding clear instances of unjust discrimination, we prohibited exclusivity clauses from being included in roaming arrangements. These clauses prevented smaller companies from using the networks of any other service provider, and were an impediment to fair and sustainable competition.
Sustainable competition
In February 2014, we launched a much broader consultation. We are examining the wholesale services that wireless companies rely on to provide services to their retail customers. Our goal is to determine whether the framework for the wholesale mobile wireless services market is sufficiently competitive—both now and in the years ahead.
As I mentioned a moment ago, competition in the wireless industry benefits Canadian society in many ways, including by providing access to high-quality networks, innovative services and reasonable prices.
At this hearing, the panel will therefore want to hear views on three areas.
(1) The state of the wholesale mobile wireless services market, which includes roaming arrangements and tower sharing.
We are examining this issue given that, to provide retail services to their customers, certain wireless companies must rely on the services of other wireless companies.
For example, roaming arrangements enable wireless companies to make their networks available to one another, so that Canadians can continue using their wireless devices to make calls, send text messages and use data when they travel outside their own network coverage area.
Tower and site-sharing arrangements enable wireless companies to install their own equipment on another entity’s structures. These entities could be wireless carriers, broadcasters, utilities, government agencies or municipal agencies. The structures in question could be towers, as well as buildings, water towers, billboards or lampposts.
These agreements enable wireless companies to deploy their wireless networks in a cost-effective and efficient manner, and minimize the number of towers in communities.
We will also examine whether companies that do not have their own network infrastructure or spectrum—known as mobile virtual network operators—should have access to certain wholesale wireless services at rates, terms and conditions set by the Commission.
(2) The impact of the wholesale mobile wireless services market on the retail market.
We will assess the relationship between the arrangements at the wholesale level and the competitiveness of the retail market, with a view to ensuring that the interests of consumers are protected.
(3) Whether greater regulatory oversight would be appropriate if we were to find that the wholesale market is not sufficiently competitive.
The Commission does not have a predetermined outcome or outcomes in mind. It is possible that we will find that the wholesale mobile wireless services market is sufficiently competitive and that no further action is required on our part.
In the event that we find that the wholesale market is not sufficiently competitive, we will consider whether additional regulatory intervention is needed. The Commission would need to determine whether its existing powers are sufficient or whether there is a need to reassert its jurisdiction in certain areas such as rate regulation.
In addition, Parliament recently amended the Telecommunications Act to limit wholesale wireless roaming rates in Canada, pending the outcome of the Commission’s work in this proceeding. The Act sets out an interim formula to calculate the maximum wholesale rate for domestic wireless voice, data and text services that a wireless company can charge its competitors.
Role of an administrative tribunal
Over the course of the coming week, it is important to keep in mind the Commission’s role as an administrative tribunal.
We have a duty to be fair, open and transparent. As I mentioned a moment ago, we have not come to any predetermined views. The purpose of this hearing is to test the evidence that has been submitted. For this reason, the panel will focus its questions on areas that it needs to explore in greater detail to build a robust record upon which it can rely on to make its determination.
Our decision will be based on the record before us, and will be made consistent with the mandate Parliament has conferred to the Commission in the Telecommunications Act.
Public participation
Before we begin, I would like to thank everyone who has participated in this process, either by submitting comments or by appearing before us. We would not be able to fulfill our legislative responsibilities without your views and participation.
All comments will be taken into consideration as we make our decision.
Procedure
Finally, I would like to provide a few introductions.
The panel for this hearing consists of:
- Peter Menzies, Vice-Chairman of Telecommunications
- Tom Pentefountas, Vice-Chairman of Broadcasting
- Candice Molnar, Regional Commissioner for Manitoba and Saskatchewan
- Yves Dupras, Regional Commissioner for Quebec
- and myself, Jean-Pierre Blais, Chairman of the CRTC. I will be presiding over this hearing.
The Commission team assisting us includes:
- John Macri and Kim Wardle, Hearing Co-Managers
- Crystal Hulley and Alastair Stewart, Legal Counsel, and
- Lynda Roy, Hearing Secretary.
I would now invite the Hearing Secretary to explain the procedures we will be following. Madam Secretary…
Thank you.
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