Ottawa opens up wireless industry to more competition

[jesseps]

The Conservative government on Wednesday paved the way for new cellphone companies by announcing new rules for an auction of radio airwaves designed to spur competition in the wireless industry.

 

About 40 per cent of the spectrum will be reserved for new entrants with the remainder open to all bidders, including Canada's big three providers — Rogers, Bell and Telus.

 

The government will also mandate roaming area agreements which will force existing carriers to share their networks with newcomers for five years, plus another five if the new entrants can build up their own networks nationally.

 

The government is also forcing existing carriers to share their cellphone towers with newcomers.

 

In handing down the rules, Industry Minister Jim Prentice gave potential newcomers, including Quebecor, MTS Allstream and Shaw, virtually everything they were asking for.

 

Prentice told a news conference that he agreed with their assessment that the wireless industry needs more competition. "Our goal at the end of the day is lower prices, better services, and more choices," he said.

 

New wireless entrants could launch by late 2008

 

The auction process is to begin on May 27, 2008, and is expected to last three weeks. Industry Canada expects new players will start up by the end of next year, at the earliest.

 

The auction traces its roots to April 2005, when the Liberal government put together the Telecommunications Policy Review Panel to look at the state of the industry and the Telecommunications Act.

 

The panel submitted its report in March 2006 to the newly elected Conservative government and, among its broader telecommunications recommendations, suggested several changes to the wireless industry to make it more competitive.

 

Industry Canada, under then Industry Minister Maxime Bernier, launched a public consultation in February 2007 that incorporated some of the panel's suggestions.

 

The ministry asked whether special conditions should be imposed on the auction, including whether some spectrum should be set aside for potential new entrants and whether caps should be installed on how much any one company could own.

 

The framework also asked whether government intervention was needed in the commercial negotiation of roaming deals between cellphone carriers. Roaming agreements allow customers of one provider to connect to the network of a different provider, which allows subscribers to use their cellphones where their carrier doesn't have infrastructure.

 

About 90 submissions were made from various industry players, including incumbents Bell, Rogers and Telus, potential new entrants Quebecor, Shaw and MTS Allstream, the Competition Bureau and various consumer and business groups.

 

The incumbents argued that no special rules should be imposed and that spectrum should go to the highest bidder.

 

The potential entrants argued that special rules were needed because the incumbents had every incentive to bid up the price of the spectrum to keep new competitors out of the market.

 

They also said mandated roaming deals were necessary because the incumbents had no incentive to sign reasonable agreements with newcomers. Without the ability to offer roaming onto other networks, the new entrants would have a difficult time attracting customers, they argued.

 

The potential new entrants cited high prices and the lack of competition between the incumbents as the reason for Canada's poor showing among developed nations in mobile phone adoption.

 

Canada's rank of 29th out of the 30-member Organization for Economic Co-operation and Development was justification for the government to get involved in the otherwise unregulated wireless industry, they said.

 

The United States held a similar advanced wireless spectrum auction in September 2006 that netted the government $13.9 billion US. The Federal Communications Commission is holding another auction in January of spectrum that will be vacated when analog television broadcasting is shut down in 2009.

 

The U.S. wireless industry is moving toward a more competitive framework, with the FCC imposing a number of open-access rules on its upcoming auction. Winners in the auction will be forced to make all cellphones, including those from rivals, work on their networks.

 

(Courtesy of CBC News)

[jesseps]

Would be nice to see AT&T come into Canada and rape every mobile company out of business

[mtlurb]

ok this is great news, I will comment a bit later.

[MTLskyline]

The major 4 (Bell, Rogers, Telus and Fido) are gouging customers with their network access fees, etc.

 

I would have to say that the best choice is Virgin Canada, they have best rates in my opinion (some pretty dated phones though).

[Habsfan]

ABout time this happens. More competition only means that we'll have better prices.

 

On se fait fourer par les compagnies de cellulaire, et il est grand temps que ça change!

[mtlurb]

La meilleure nouvelle là dans c'est que les joueurs existants vont être obligé de partager leur tours avec les nouveaux joueurs! C'est comme en Europe, ou toutes les compagnies partagent le meme poteau, réduit les couts et acroit la couverture (meilleur service)... ça réduit aussi la pollution visuelle.

[WestAust]

Le probleme avec les nouveaux entrant, surtout Videotron, c'est qu'ils sont regionaux, Videotron a pas l'intention de developper un reseau hors Quebec, c'est p-e bon pour ici, mais pour l'ensemble du pays ca sert a rien, et ca risque d'etre la meme chose si c'est Shaw ou MTS Allstream qui gagne l'enchere du nouvel arrivant, ils vont developper leur reseau dans leur coin, et le reste du pays voit pas d'avantage.

[mtlurb]

C'est pas vrai WestAust, parceque oui au début, ça part au Québec mais ça va s'étendre rapidement puisque les nouveau joueurs pourront utiliser le réseau des anciens.

 

Je crois pas que Videotron va limiter ses chiffres d'affaire juste de même.

[Habsfan]

En bout de ligne, ce qui compte c'est qu'on va payer moins cher pour nos cell!!

[WestAust]

je l'espere, surtout coté data, on est loin d'etre competitif