Canada’s Radio-television and Telecommunications Commission opened the market for local phone service last week, which has wireless players ecstatic.
The CRTC has “issued a strong endorsement of the role wireless carriers will play” in the local market, said Microcell Telecommunications Inc. of Montreal.
“What you will ultimately see is people ripping the phone off the kitchen wall, throwing it away and then turning to wireless PCS. You will call people, you won’t call a home or a place,” said Robert Simmonds, chairman and vice president, regulatory and technology, Clearnet Communications Inc.
Previously, local phone service was a monopoly operated by Canada’s provincial Bell telephone companies. Similar to the regional Bell operating companies in the United States, these Canadian companies operate a wireless business as well, which comprise Mobility Canada.
Microcell and Clearnet each are licensed with 30 megahertz in the 1.9 GHz range for personal communications services. Cantel AT&T and Mobility Canada are Canada’s nationwide cellular carriers and each hold 10-megahertz 1.9 GHz PCS licenses.
New entrants to the local market are entitled:
to interconnect with telephone companies on a bill-and-keep basis where no money is exchanged between the two parties;
to receive the same subsidy as telephone companies for serving high-cost and rural areas;
and to access components of telephone companies’ networks on an as-needed basis at reasonable rates.
Canada’s market liberalization is similar to that of the United States, but isn’t quite so rigorous, said Mark Lowenstein, director of mobile/wireless communications for the Yankee Group, Boston. “Prior to the ruling, [local service] was more restrictive than in the United States. Post-ruling it’s more of a free for all.” In Canada, “there are no checklists that the interexchange carriers have here to be local providers.”
“These are no minor adjustments to the previous rules,” said Dean Proctor, vice president of regulatory affairs for Microcell. “The new rules will benefit all stakeholders: consumers, businesses, university groups, governments, network operators and investors.”
Lowenstein expects Canada’s phone companies will lower interconnection rates with the impending competition, which “validates the wireless companies plans to enter the market.”
“Microcell’s pricing is as close to landline displacement type pricing as anything in North America,” commented Lowenstein. He expects Microcell to align with cable-TV operator Videotron Ltd., one of Microcell’s owners, in its entrance to the local market.
Cantel AT&T, a long-distance and wireless company, may approach the local market with a fixed wireless strategy incorporating use of AT&T Wireless Services Inc.’s Interim Standard 136 Time Division Multiple Access technology, said Lowenstein.
He said the new rules likely will push Bell Mobility “to bundle aggressively wired and wireless to protect their turf and keep customers.”
“The CRTC’s decision creates a regulatory framework that enhances the potential for Clearnet’s soon-to-be-launched personal communications services to be a competitive wireless alternative for local telephone service,” said the company.
Clearnet noted that the commission ruled local subsidies are portable. “Local subsidies belong to subscribers who will now be able to take these subsidies with them to help pay their local phone bill-no matter which local service provider they choose.”
