UPDATE 3-Canada to cap domestic wireless roaming rates

Wed Dec 18, 2013 5:05pm EST
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By Alastair Sharp

TORONTO Dec 18 (Reuters) - Canada will introduce legislation to cap wholesale roaming rates that big telecommunications providers charge their smaller rivals, aiming to breathe life into the federal government's sputtering drive to foster competition in the wireless industry.

In announcing the new rules, Industry Minister James Moore said on Wednesday that Canada's big wireless companies charge small carriers as much as 10 times the rate they charge their own customers for roaming voice, data and text services.

The difference ratchets up costs for the small players and their retail customers, while bolstering the competitive position of the three national carriers, Rogers Communications Inc, BCE Inc and Telus Corp.

"For too long, Canadian consumers in the wireless sector have been the victims of these high roaming costs," Moore said in a statement announcing Ottawa's plans to submit an amendment to the Telecommunications Act within weeks. The governing Conservatives hold a majority in the House of Commons, assuring passage of the bill.

The legislation would allow the Big Three to charge their competitors no more than the rate they charge their own retail customers. BCE, parent of Bell Canada, shares a coast-to-coast network with Telus.

The government hopes the cap on wholesale rates will encourage smaller carriers to cut consumer prices and improve service outside their own coverage zones, which tend to be confined to major metropolitan areas.

"This move neutralizes the 'reach' dimension of the incumbents' advantage," said Iain Grant, managing director of telecom consultancy Seaboard Group, adding that it was "a big step forward."   Continued...