Prentice hints at reining in cellphone companies

In the wake of growing consumer frustration over Canadian cellphone prices, the government is hinting that increased regulation of the industry may be on the way.

In the wake of growing consumer frustration over Canadian cellphone prices, the government is issuing veiled warnings to providers that increased regulation of the industry may be on the way.

Industry Minister Jim Prentice, who earlier this month criticized Bell Canada Inc. and Telus Corp. for proposing to charge customers for incoming text messages, told reporters after a caucus meeting Thursday that cellphone providers are walking a fine line.

"We don't have a heavy regulatory burden on the cellular industry," he said. "That's something that we have tried to maintain in Canada. At the end of the day, consumers do need to be protected. I've made these points publicly and privately with Mr. Cope as well."

Prentice said he has met with Bell chief executive officer George Cope to discuss the text charges and plans to do so soon with Telus CEO Darren Entwistle as well.

Bell plans to institute the charge of 15 cents per message on Aug. 8, while Telus plans to follow suit on Aug. 24.

Prentice, who earlier this month said the charges were "poorly thought out," denied Thursday that he was hinting at more government oversight of cellphone companies but also repeatedly pointed out that the European Union is moving toward regulating text-messaging fees.

"Beyond regulation, we can have the discussion that we've had and I think it's a respectful dialogue that we have with the cellular industry," he told reporters. "I think they're cognizant of comments that ministers make and they're aware that the telecommunications industry is regulated largely by the Minister of Industry."

'Consumers want to see some action'

"I'm not hinting at regulation, I'm simply saying that this needs to be addressed. The cellular phone companies need to address the issue," he said.

"This is a serious issue that Canadian consumers want to see some action on... [regulation] is an alternative that other countries have explored."

Bell and Telus officials did not immediately return requests for comment.

The government has over the past few months backed down on its non-interference, free-market principles when it comes to the cellphone industry.

In November, Prentice announced rules for the spectrum auction — which ended last week — that encouraged new companies to enter the market and compete with incumbent providers Bell, Telus and Rogers Communications Inc.

The government reserved 40 per cent of the licences being sold for new entrants and forced the big three to offer reasonable roaming deals to any new carriers that start up.

5 new companies in the market

The auction resulted in at least five new companies being well positioned to offer cellphone services, possibly as soon as next year, including Toronto-based Globalive, Montreal-based Vidéotron, Halifax-based EastLink and Calgary-based Shaw.

Prentice defended his stance against existing cellphone providers to reporters on populist grounds. 

"I think we have been taking an approach that is responsive to Canadians, responsive to the concerns that we've heard," he said in response to a question.

"We've not taken any heavy-handed steps, to use your term. We simply indicated we were concerned about the charges that were being proposed. We thought they were at variance with what consumers expected."

Prentice has been criticized for his stance on text messaging by the Liberals, who said his "grandstanding" would amount to little.

Liberal party industry critic Scott Brison told CBCNews.ca two weeks ago that Prentice is making noise about cellphone charges because he put his neck out with the spectrum auction rules, which he promised would result in more competition and lower prices.