On January 29, the Commissioner of Competition made submissions to the CRTC in
connection with the its ongoing public proceeding examining
whether incumbent wireless carriers are unjustly discriminating, or
demonstrating undue preference, with respect to wholesale mobile
wireless roaming arrangements.
Wholesale roaming arrangements allow the subscribers of one
wireless carrier to utilize the wireless network of another carrier
in areas in which the former carrier does not operate a network. In
this way, roaming agreements allow carriers without fully-developed
Canadian networks (for example, U.S. carriers and new wireless
entrants) to offer their customers nation-wide coverage by
"piggybacking" where necessary on the network of a more
After a fact-finding exercise in mid-2013, the CRTC determined
that some Canadian carriers were charging significantly higher
rates in wholesale arrangements with other Canadian carriers
(i.e., new Canadian entrants such as Wind Mobile and
Mobilicity, which compete with the other Canadian carriers) than in
their arrangements with U.S. carriers. The CRTC launched a public
proceeding on December 12, 2013.
According to the Commissioner's comments, the Competition
Bureau believes that incumbent carriers (i.e., Rogers,
Bell and TELUS) have market power in the provision of retail
wireless services, and "therefore have an incentive to enact
strategies to protect their market power by ensuring that entrants
are not, and do not become, fully effective competitors." The
Commissioner states that imposing "supra-competitive roaming
rates" on competitors can result in the elimination of those
competitors (either by excluding them from a market entirely, or by
raising their costs and preventing them from competing).
The Commissioner also criticizes a report by Jeffrey Church and
Andrew Wilkins of the University of Calgary which concludes that no
"competition problem" exists in mobile wireless services
in Canada; the report also argues that government intervention is
not necessary and is likely to be unsuccessful and inefficient. The
Commissioner alleges that the report's analysis does not
support its conclusions.
Finally, the Commissioner argues that wireless carriers have
engaged in "differential treatment" which should be
regarded as unfair or undue, and which could result in the
elimination of a source of competitive discipline. The Commissioner
states, in the abstract, that if the CRTC is faced with a choice of
remedies in which one option goes too far and the other not far
enough, it should opt for the former remedy. (This statement is
supported with a reference to a decision interpreting the merger
provisions of the Competition Act, rather than the
While the conclusions outlined in the Commissioner's
submission are far-reaching, the submission does not set out
evidence and analysis in support of many of them. More importantly,
the Bureau's submission does not go on to consider potential
remedies – perhaps leaving this to the CRTC, as the regulator
in the area.
The Commissioner's comments were submitted to the CRTC as
part of the "public comment" process (which ended on
January 29), and also pursuant to section 125 of the
Competition Act, which authorizes the Commissioner to make
representations to government bodies (including the CRTC) in
respect of competition whenever such representations are relevant
to a matter before the body. This provision had fallen into disuse
since 2009, but has now been used twice by the current Commissioner
to make submissions before the CRTC.
In the next stage of the CRTC process, parties will have until
February 10, 2014 to submit replies to the public comments. Stay
tuned – wirelessly or otherwise – for further
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Canadian Competition Bureau issued a template document for use as a form of Consent Agreement, to be filed with the Competition Tribunal to resolve concerns the Bureau may have with proposed mergers.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).