Customers of smaller wireless carriers such as Wind will soon no longer be charged huge premiums when they travel within Canada and roam on the networks of bigger carriers, the federal government has announced.
Industry Minister James Moore said Wednesday that "in the coming weeks," the federal government plans to ban wireless providers from charging more for services to customers of carriers other than their own.
"The roaming rates that Canada's largest wireless companies are charging other domestic providers can be more than 10 times what they charge their own customers," Moore said in a statement.
"For too long, Canadian consumers in the wireless sector have been the victims of these high roaming costs."
Smaller carriers such as Wind typically don't have as wide coverage with their own cellphone towers across Canada as the Big 3 – Rogers, Bell and Telus. When their customers travel outside the range of Wind's network, they must use the towers of the bigger carriers, and may be charged high "roaming" rates.
The CRTC has previously expressed concern that this makes it difficult for smaller carriers to compete, and has launched an investigation into wireless roaming rate agreements.
Simon Lockie, chief regulatory officer for Wind Mobile, applauded the proposed cap on roaming rates.
"Today’s announcement will help ensure more competition and more choices for Canadians,” he said in a statement.
In an email to CBC News, Bell spokeswoman Jacqueline Michelis said the company looks forward to "seeing in more detail the legislation." Telus declined to comment, and as of 3 p.m. ET, Rogers had not responded to requests from CBC News for comment on Moore's announcement.
The new caps on domestic roaming rates for voice, data and text services will be introduced as an amendment to the Telecommunications Act.
Moore announced that the government will also be making amendments to the act that would allow the Canadian Radio-television and Telecommunications Commission (CRTC), which regulates the wireless industry, to fine companies that violate rules such as the new Wireless Code, which governs wireless customer contracts.
Fines could also be imposed for violations of rules related to the deployment of wireless spectrum, services to rural areas, and the sharing of cellphone towers.
CRTC roaming rates probe unaffected
Tony Lacavera, CEO of small carrier Wind, says the policy will make a big difference in roaming rates across the country.
"This roaming development is huge for Wind because it allows us to go out there with a whole new proposition. We can now offer Canadians national plans," he said in an interview with CBC's Lang & O'Leary Exchange.
As it stands now, customers have their calls dropped and can't roam seamlessly on Wind plans, while costs have been prohibitive, he said. He expects the new regime will allow Wind to attract business customers and people who travel frequently.
Lacavera said the big three telecom firms were supposed to share with small entrants, but it hasn't worked out that way.
"We have not successfully been able to share their towers – which is a big environmental concern building more sites and aesthetically, they’re pretty ugly too – so we have had to build everything from scratch," he said.
The CRTC announced last week that it is investigating wholesale roaming agreements across Canada to find out if wireless providers were placing their Canadian competitors at an unfair advantage, and will be launching a proceeding in 2014 to examine wireless competition in Canada.
Neither the investigation nor the proceeding will be affected by Moore's announcement, a CRTC spokesperson told CBCNews.ca Wednesday.
CRTC chair Jean-Pierre Blais disclosed last week that the commission had obtained information that Telus, Bell and Rogers were proposing to charge higher rates to smaller Canadian carriers such as Wind than they charge to U.S. wireless companies and was concerned.
He noted that the commission had the authority "to ensure that companies do not give themselves an unfair competitive advantage" such as by charging "unjustly discriminatory" roaming rates.
The regulator began gathering information about roaming rates earlier in the fall and is seeking public comments until Jan. 29.
Its planned proceeding in 2014 will further examine competition in the wireless market and what measures might need to be taken if it is found to be "not sufficiently competitive."