Law Times

Page 10 April 14, 2014 • lAw Times www.lawtimesnews.com Wireless auction renews focus on competition Complaints raise spectre of new regulation, wholesale roaming rate FOCUS he dust has settled from the latest spectrum auction, but the mobile wireless market is still under the mi- croscope. e Canadian Radio-tele- vision and Telecommunications Commission is seeking stakeholder opinions on whether regulatory intervention is necessary to ensure competition even as the federal government has already flagged its intention to make the industry fit its vision of a competitive market. With the sale of highly desirable spectrum on Feb. 19, the government was hoping to see a substantial new fourth player enter the Cana- dian wireless market. Given the failure of that plan, the government may have to rethink its vision for the future of the wireless market. John Lawford of the Public Interest Advo- cacy Centre is disappointed the spectrum auc- tion largely preserved the status quo in Canada. No potential national player emerged with the exception of Vidéotron, a company Lawford anticipates may not actually use its spectrum but instead may hold on to it for investment purposes. "ere was a hope that a big strong competitor would come in. It was ex- pected that Wind would be that company, but that didn't pan out for various reasons. ey thought a Verizon- type player might come in. at also didn't pan out." David Elder of Stikeman Elliott LLP thinks a fourth national player may never appear in the Canadian market. "Given the size of the market and the geo- graphical challenges to be faced, that may be a bridge too far." He notes the govern- ment is now saying Canada does have a fourth player in every jurisdiction. "I have a sense that the government may be backing away from a single national com- petitor and could be satisfied with strong re- gional players that provide alternatives." Lawford believes the market is in flux but notes there's a clear indication from the government on the need for more competi- tion. "ey'll try to bring in the big guys and if they can't, they'll set conditions for the little guys to thrive." e policy appears to be behind recent changes to foreign ownership rules, the conditions for the spectrum auctions, and new legislative provisions flagged in the 2014 budget. "One wonders how far the government will go, beyond purely ensuring fair competition, to jig the market to promote competi- tion," says Elder. e government's economic action plan for 2014 has already hit the parliamentary table with provisions that will cap the roam- ing rates new entrants pay for the use of towers, networks, and spectrum at the retail level. e SPEAKERS CHAIR AND COURSE LEADER Barry Sookman, Partner, McCarthy Tétrault LLP GUEST SPEAKERS Bill Abbott, Senior Counsel and Bell Privacy Ombudsman, Bell Canada Howard Fohr, Senior Legal Counsel, BlackBerry Limited Wally Hill, Senior Vice President, Government & Consumer Affairs, Canadian Marketing Association Andrew Heitelman, TELUS Legal Services Dominic Jaar, Partner and National Practice Leader, Information Management Services, KPMG Canada Monica Papendick, Senior Counsel, CIBC Scott Smith, Director, Intellectual Property and Innovation Policy, The Canadian Chamber of Commerce Puneet Soni, Associate, McCarthy Tétrault LLP Michael Fekete, Partner, Osler, Hoskin & Harcourt LLP David Canton, Lawyer and Trade Mark Agent, Harrison Pensa LLP Philip Palmer, Justice Canada (Retired) Daniel Glover, Partner, McCarthy Tétrault LLP CANADA'S ANTI-SPAM LEGISLATION CASL - The toughest law of its kind in the world. 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Untitled-3 1 14-04-08 8:54 AM move followed a CRTC fact-find- ing exercise in mid-2013 that ex- posed the fact Canadian carriers were charging significantly higher rates to their Canadian competi- tors than to U.S. carriers. For example, the charge for a Wind Mobile customer to roam outside of the network is more than six times what Rogers Com- munications Inc. charges other customers. Mobilicity says it costs less for its subscribers to call from Los Angeles to New York than from Kenmore, Ont., to nearby Ottawa. e CRTC is consider- ing whether this discrepancy amounts to discriminatory or prejudicial behaviour. Lawford believes the CRTC will eventually come up with a wholesale rate. "e government has said it doesn't believe that roaming costs anything different to passing data to your own cus- tomers. ere is lots of markup even on the wholesale rate. If they charge the same, they are more than well compensated." e incumbents, pointing to substantial casual costs, ar- gue otherwise. ey also con- tend that U.S. and Canadian comparisons aren't appropriate because they're fundamentally different service regimes. Prices vary dramatically across Canada because they encompass differ- ent services and technology and reflect whether an agreement is unilateral or bilateral, exclusive or subject to volume discounts. If the CRTC finds the prac- tices are unwarranted and an- ticompetitive, there may be more changes on the horizon. It launched a consultation in De- cember to determine whether the market is sufficiently competitive to warrant continuing forbear- ance in regulatory activity. But Elder believes any change would amount to regulation of a long-deregulated industry. "ere is a fundamental problem in an entrenched market where there are at least three large and estab- lished players. What does a com- petitive market look like? How much should the government in- terfere to create its own vision of what competition should be?" Submissions already received in the CRTC consultation range from opinions that market forces should continue to be the deter- minant to suggestions for a full wholesale rate regulatory regime. Others say the current regime is sufficient as long as there's greater enforcement. Elder thinks the government should be focusing on fair competition rather than giving springboards and an extra li to new players. "I believe that's artificial and not sustainable," he says. Given the government's clear interest in the matter, Lawford expects a wholesale roaming rate if not a new regulatory roaming regime within 18 months. "e writing's on the wall," he says. LT 'One wonders how far the government will go, beyond purely ensuring fair competi- tion, to jig the market to promote competi- tion,' says David Elder. BY JuDY VAn RHIJn For Law Times T

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