Loopholes in Ottawa’s policy put rural wireless service at risk

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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

Organizations: Bell Canada

Geographic location: Canada, US, Ottawa

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Recent comments

  • Hensel
    August 20, 2013 - 21:29

    Maybe we'd best be served if we emailed our MP and asked them to demand ALL cell phone companies serve rural areas? Or at least publish fair fees? Or at least guarantee coverage in areas on their coverage "maps"? Bell is a horrible company. Rogers too. BUT consumers can have THEIR say, by picking SaskTel. In the rest of Canada? Wish the CRTC grew a pair and enforeced transparency. I find Bell pretending to be a decent company offensive!

  • Hensel
    August 20, 2013 - 21:26

    How about holes in Rogers and Bell's ads? They claim American companies will be bad for rural service. How about Rogers "rural" service? Service not at all in keeping with maps. Or Bell? With "mystery fees" and no attempts at service in rural Manitoba? SaskTel and MTS are good for rural. Corporate Bell/Rogers could care less. There ads are hypocritical at best!

  • Robbers Hell Tales
    August 12, 2013 - 18:28

    In response to the recent propaganda by Robelus, check out this Fair for Canada Parody: http://youtu.be/kC0uMKXsVM4

  • Kevin Montgomery
    August 08, 2013 - 13:12

    Perhaps Verizon will be good for Canada. It will force the big 3 to lower prices to compete and maybe they will provide better access to rural communities. The big 3 just want to keep our money!

  • adam
    August 06, 2013 - 15:01

    why would a canadian company sell its company to a soon to be bankrupt country clealy the USA is currenty not doing very good . and also why wouldnt we give canadian companies a chance to purchase company and keep jobs in canada . that would be like selling canada to china oh wait we already did that !! keep the jobs here @!!!

    • Anonymous
      August 07, 2013 - 10:11

      Because one of the Big 3 would by Wind/Mobilicity and fold it. The only interest that the big 3 have in Wind and Mobilicity is to buy it out so they can get bigger market share and protect their own profits. The purchase would have no benefit to customers. If you want to talk about jobs being sold take a look at Telus they outsourced a lot of the jobs to India and Philippines. The Big 3 jobs argument is just a disguise used to get people on their side so they can protect their profits instead of trying to compete and offer fare prices to consumers.

  • Doug Smith
    August 06, 2013 - 13:08

    The Bell official who penned this opinion is dead wrong. Cellular service in rural Canada is total garbage compared to other countries. In the US -- rural service is encouraged by government policy. http://www.rurdev.usda.gov/rd/pubs/RDBroadbandRpt.pdf

  • Andrew Choate
    August 03, 2013 - 17:58

    I do not feel particularly well served in the rural area that I am located in now. Bell has the ability to run fibre and / or DSL now to my village however it would appear there are not enough customers to make it worth thier while. Currently I use a Bell Turbo Hub (cell technology) and I often have payed around $200.00 per month for Internet service. Consider I pay another bundle to Bell for satelite TV and phone, I find it hard to feel sorry for either of the big 3! Every day I am bombarded with rest adds from Bell on thier TV network (CTV) yet they do not provide to the small community. Maybe Bell would harvest the business from small communities if they had more competition. Currently they seem to be cherry picking the high density buck! The recent EORN changd absolutely nothing in my community ... All Internet and TV is terrestrial or good old dial up! We have the same issue with natural gas .... we have the luxury of paying more for propane and having a big white tank in our yard. I still would not trade the country for high density even if it costs more. I also do not have a cell phone as I can not justify the current cost ... Way to much money to keep socially connected ... Call me draconian!