By Mirko Bibic
Canadians in small towns and rural communities deserve access to the best wireless networks and new smartphones at competitive prices. That’s why Canada’s wireless industry invests billions of dollars every year and employs thousands of Canadians to build and enhance our wireless networks. Today, 99 per cent of Canadians in cities, towns and rural locations alike have access to world-class mobile services and devices at the same prices as those available to customers in major cities.
But rural rollouts of the latest and greatest in wireless – LTE or “Long Term Evolution” networks - are now at risk.
The federal government has inadvertently left loopholes in new wireless regulations that pave the way for giant US corporations like Verizon Communications to purchase more of Canada’s airwaves than Canadian wireless companies can. These loopholes enable major US players to benefit from regulatory advantages actually intended for small, competitive wireless startups.
Bell welcomes competition with anyone but there must be a level playing field. Big advantages for huge US entrants will cost all Canadians – and many expect the worst impact will be felt by Canadians who live and work in rural communities.
Bad news for rural Canada
Canadians increasingly use smartphones and advanced data networks for business and educational applications, social networking, and entertainment options such as mobile TV and gaming.
This fast-growing mobile data usage means that more and more spectrum is needed to satisfy demand. And certain airwaves – like the 700 MHz spectrum about to be auctioned by the federal government – are best suited to carrying data over greater distances. These airwaves are a public resource, and are ideal for delivering advanced wireless services to rural and remote locations across Canada.
The bad news for rural Canadians is that spectrum purchased by Verizon will not be used in rural areas. And because Verizon can bid for more of these newly available airwaves than Canadian companies can, providers like Bell will be limited in how extensively we can roll out new rural coverage.
Industry experts predict that New York based Verizon will avoid building networks in Canada’s rural areas altogether and focus only on serving the largest cities.
It’s not just that a company like Verizon is unlikely to deliver more choice or reduced prices to rural Canadians (the average Verizon Wireless customer actually pays more than the average Bell wireless customer). Their ability to acquire more of our country’s prime airwaves than Canada’s own companies means that the spectrum ideal for rural rollouts will be used up serving mostly urban areas. Investment in rural Canada will decline. Canadian jobs will be lost.
Government must take action
We believe a $120-billion US company like Verizon, multiple times bigger than Canada’s entire wireless industry combined, simply does not need favours from the Canadian government in order to compete with us.
It’s not too late for Ottawa to take action to support a fair and open marketplace, and ensure the ongoing rollout of advanced mobile services to rural Canadians. Bell has brought LTE network technology to 75 per cent of Canadians. With additional spectrum from the government’s upcoming auction and a level playing field, further network rollouts in smaller communities will be possible. Without changes to the loopholes, however, further rollouts are clearly at risk.
The solution is straightforward. We ask that Canadian wireless companies be allowed the same opportunity to acquire Canadian spectrum as US companies like Verizon. And if a company like Verizon enters Canada, it should be required to use its resources to build its own national network covering both urban and rural locations, just as Canada’s wireless leaders have done.
These steps will help ensure a strong Canadian wireless industry that continues to deliver world-leading mobile services at competitive prices in all markets – including Canada’s small towns and rural communities.
For more information, please visit Bell.ca/PlayFair.
Mirko Bibic is Executive Vice President and Chief Legal and Regulatory Officer for Bell Canada