Government tables amendments to cap wholesale roaming charges

31 mars 2014

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Following up on its February budget announcement, the federal government has tabled proposed amendments to the Telecommunications Act that would limit the amount that carriers may charge each other for the provision of roaming services; however, the amending legislation does not include other proposed changes that were announced in February.

The amendments are contained in Bill C-31, a daunting 359-page budget implementation bill that amends nearly 40 statutes.  The bill was introduced on 28 March 2014.

The proposed amendments would add a new section to the Telecommunications Act prohibiting a carrier from charging other carriers amounts for roaming services that exceed the average amount charged by the carrier to its own subscribers for those services.  There would be separate caps created for wholesale roaming charges levied for each of:

  • Domestic wireless voice calls and the domestic portion of international voice calls
  • The transmission of wireless data in Canada
  • The transmission of all domestic wireless text messages and the domestic portion of all international wireless text messages

The provisions in question provide for a formula for calculating the amount of the cap for each of these three types of roaming services: the carrier’s total revenues from the preceding year for the provision of the services in question to its own retail customers, divided by the number of minutes, megabytes or messages, respectively, provided for those services in the preceding year.  It is unclear whether the formula is to be calculated with reference to a calendar year, a fiscal year, or a rolling 12-month period.

As added insurance, carriers would also be explicitly prohibited from charging other carriers any other amount in relation to the provision of roaming services, such as a surcharge or similar fee in addition to the actual roaming charges.

In its original budget announcement, the government indicated that its planned legislative amendments respecting domestic wholesale roaming caps were intended as an interim measure, until the CRTC, which is currently examining the issue, makes a decision respecting whether regulatory intervention is necessary to ensure competitiveness in the Canadian wireless market.  In keeping with the announced interim nature of the legislated caps, the government’s amendments  include “self-destruct” provisions that would allow for the repeal of the new amendments simply by proclaiming other sections of the law in force. 

Interestingly, the recently proposed amendments do not include other proposed changes that were announced with the publication of the budget document in February.  Notably, Bill C-31 does not contain amendments that would grant the CRTC and Industry Canada the power to impose “administrative monetary penalties” on companies that violate wireless regulatory requirements imposed pursuant to the Telecommunications Act and Radiocommunication Act, respectively.  Also missing are announced amendments that would provide the CRTC with direct authority over non-carriers, such as resellers.

In this regard, we note that the short title of Bill C- 31 is “Economic Action Plan 2014 Act, No. 1,” suggesting that additional budget implementations bills are still to come.  Stay tuned for “No. 2”.

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