Gazette Notice DGTP-006-05

Department of Industry

Radiocommunication Act

Notice No. DGTP-006-05 — Policy to Promote Digital Roaming for Rural Subscribers

Intent

The purpose of this notice is to announce the Department's policy to promote digital roaming service for subscribers of cellular and Personal Communication Service (PCS) carriers operating in rural Canada. This decision takes into account the submissions received in the public consultation process initiated in Notice No. DGTP-007-03, the objectives of the Telecommunications Act and the economic challenges in the provisioning of advanced communication in rural areas.

Background

Over the years, in the licensing processes of cellular and PCS services, the Department has promoted the provision of mobile telephony services to all regions of Canada. In particular, steps have been to promote the roll-out of services across Canada through the issuance of national service licences, and to promote inter-carrier roaming and resale of analogue cellular and resale of digital PCS. This has assisted the PCS carriers in achieving a national service for their customers. Equally important, stand-alone rural analogue cellular carriers, which include the many independent telephone companies and new regional entrants, have been integrated with the national wireless networks.

The national carriers have developed different strategies to compete in an open marketplace including differentiating their network deployments, service offerings and tariffs. The current cellular and PCS networks are well established with coverage to over 94 percent of the population. Nevertheless, more than 70 percent of the Canadian geography, does not have any cellular or PCS coverage.

In 1998, the Department established the Policy for the Provision of Cellular Services by New Parties (RP-019), to extend the provision of 800 MHz analogue cellular services to unserved and underserved areas. The new party cellular policy enables entities, other than the cellular carriers initially authorized in 1985, to use part of the 800 MHz spectrum that remains unused, to offer cellular services and fixed wireless access. This policy remains successful in providing cellular spectrum to new carriers proposing to serve rural communities.

The Department notes that national analogue cellular networks are being converted to offer integrated digital services and that analogue cellular equipment, including analogue terminals, will be discontinued by most major manufacturers within 3-5 years. Already, some of the national operators are discontinuing the sale of analogue cellular service. Subscribers to rural networks will be adversely affected if the rural networks are not integrated with the national digital networks.

Some rural carriers have expressed concern that in some cases, national cellular and PCS carriers are reluctant to provide digital roaming service or service agreements with them because it could set a precedent that may require the national carrier to offer a similar arrangement to their national competitors on a non-discriminatory basis.

Consultation

In the paper Consultation on the Spectrum for Advanced Wireless Services and Review of the Mobile Spectrum Cap, announced in Notice No.
DGTP-007-03, the Department requested comments on measures to promote advanced mobile telephony services in rural Canada.

The Department remarked in its consultation paper that digital telephony roaming service is commonly available to foreign visitors in Canada and to Canadians travelling in many regions of the world. Since Canadian rural carriers serving a specific territory may be in a similar situation as a foreign service provider in that they are not direct competitors to the national carriers, it has been argued that they should be able to benefit from similar roaming services. As mobile telephony services have become an essential service to many Canadians, it is important that, without affecting or distorting competition in the wireless industry, these rural networks continue to be fully integrated into the national telecommunications networks.

Specifically the Department requested comments on:

1. The proposal to afford preferential commercial roaming arrangements to small rural carriers with national and regional cellular and PCS carriers where the rural carriers: 
   
   
   1. do not compete in the same serving territories having network facilities; and
      
      
   2. operate solely in an unserved or underserved area.
      
      
2. The mechanisms that may best implement this proposal.

In the Policy for the Provision of Cellular Services by New Parties, the Department defined an unserved area as a geographic area that is not being served by any cellular service provider, and an underserved area as one that is being served by only one cellular service provider.

There were ten specific responses on the roaming issue. Submissions were received from rural carriers, telecommunications associations and from national cellular and PCS operators. There was general agreement with the proposal and several respondents encouraged the Department to develop a policy in this matter.

It was suggested that roaming should reflect industry norms and be fair to both parties. Another comment was that a standard agreement should be developed to help reduce the costs of such agreements for small rural operators. It was mentioned that possibly a group, such as the Canadian Wireless Telecommunications Association, could develop such an agreement. One respondent suggested that the policy should not be limited to small regional (rural) carriers and that there be complete access to 800 MHz spectrum via digital roaming throughout Canada. This suggestion goes further than the Department's proposal and several respondents indicated that they agreed with the Department's proposal on the condition that the proposal remains as written in the consultation paper. As to the method of implementation, there was general support for the issuance of a policy statement to promote the development of communications services to rural areas.

Discussion

One of the objectives of the Telecommunications Act is to promote the availability of reliable and affordable telecommunications services to all regions of Canada. Another policy objective is to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective. Due to the economics of rural communications, the availability of advanced telecommunications services, including cellular and PCS services, tends to lag behind the services available in urban areas and vicinities. Over the years, the Canadian Radio-television and Telecommunications Commission (CRTC) and the Department have taken particular actions to bridge the disparities between urban and rural areas and to promote the development of telecommunications services in rural areas.

To continue to give regard to these objectives, the Department proposed in its consultation paper, that new measures should be taken to promote the development of digital roaming agreements between rural, stand-alone carriers and the national/regional operators. There was general agreement to this proposal from all parties who responded to the consultation paper.

With the availability of 800 MHz cellular and 2 GHz PCS spectrum, carriers may be operating in unserved and/or underserved rural and remote parts of Canada where the provisioning of advanced communications is of importance to these citizens.

Conclusion and Decision

The comments received supported the Department's view that rural carriers which do not compete in serving areas of national cellular or PCS carriers, warrant special consideration in reaching commercial digital roaming arrangements to assist the integration of rural services with national or regional telecommunications networks.

The Department believes that the public interest, convenience and necessity would be served if rural wireless carriers operating in the 800 MHz cellular or 2 GHz PCS spectrum would be afforded commercial roaming arrangements with the digital networks of the national or regional carriers. Special consideration is justified in cases where the rural carriers do not compete with the national or regional carriers in their network serving territories.

Subscribers to non-competing rural cellular and PCS networks should have the same roaming privileges afforded to the subscribers of foreign carriers when they travel to any part of Canada.

Having given consideration to the concerns of small rural wireless carriers, the Department wishes to make the following policy statement:

"The Department continues to support roaming and resale service arrangements among cellular/PCS carriers. It is important for Canadian subscribers to benefit from extended service coverage across Canada.

In particular, the Department encourages regional and national cellular/PCS carriers to provide special consideration, such as the provision of digital roaming arrangements, to non-competing rural wireless carriers to integrate their services. This will permit rural subscribers to benefit from extended coverage across Canada and advanced communication services."

The policy does not affect any ongoing commercial roaming and resale arrangements or any action by the CRTC under the Telecommunications Act.

The Department believes that issuing this policy statement is sufficient to better enable rural wireless cellular/PCS networks to be integrated with larger wireless networks. A voluntary approach in developing commercial roaming arrangements between carriers with minimal government or regulatory intervention is the most desirable method of implementation. As such, the Department will not, at this time, impose a new condition of licence on the existing national and regional PCS carriers. The Department will continue to encourage and monitor the implementation of services in rural areas.

Obtaining Copies

Copies of this notice and documents referred to are available electronically on the Spectrum Management and Telecommunications Web site at: http://strategis.gc.ca/spectrum. The comments on the AWS consultation paper are available for viewing at: http://strategis.ic.gc.ca/epic/internet/insmt-gst.nsf/en/h_sf08089e.html

Official printed copies of Canada Gazette notices can be obtained from the Canada Gazette Web site at: http://canadagazette.gc.ca/publication-e.html or by calling the sales counter of Canadian Government Publishing at
(819) 941-5995 or 1 800 635-7943.

July 21, 2005

____________________________
Larry Shaw
Director General
Telecommunication Policy Branch