Thursday turned out to be a nightmarish day for internet junkies across Canada, as the CRTC ruled that both Bell can proceed with plans to charge broadband customers per gigabyte of data consumed. Known as usage-based billing, the CRTC granted Bell permission to go ahead with the changes on the condition that it does not charge usage-based rates to wholesalers until all of its retail customers are switched over to usage-based plans. Bell did away with uncapped data allotments in 2006 and the vast majority of its retail customers are presently on usage-based plans. If and when all consumers are on the new plans, Bell will be able and willing to impose a cap of 2GB, 20GB and 60GB on its 512Kbps, 2 Mbps and 5Mbps services. Anyone who exceeds the cap will have to pay $1.12 per GB up to a maximum of $22.50. Exceed 300GB and pay an additional $0.75 per GB. Many wholesalers are crying foul over the ruling as it gives Bell an even greater advantage over its partners wholesales and significantly reduces competition in the broadband market as it will force rates to be raised. Bell has yet to comment on the ruling. More →
While Canadian carrier hopeful WIND might not be launching any time soon thanks to its foreign ownership structure, outsiders are already drooling at the prospect of buying up all of WIND’s spectrum in the event that it doesn’t launch. WIND CEO Ken Campbell dismissed such things as “media speculation” during our interview with him and repeated ad nauseam that WIND is currently weighing its options, but now more of its would be competitors are speaking up on what might be. Said Rogers CEO Nadir Mohamed on Friday: “Spectrum is a very valuable asset. Rogers for sure would be interested in picking it up.” Snapping up all of WIND’s spectrum wouldn’t be cheap considering it was originally purchased from Industry Canada in 2008 at a cost of $442.1 million Canadian ($420.4 million USD), but the possibility that several of the Big Three would buy it in parcels if the launch never happens remains relatively high. After all, Bell has previously said it would be willing to purchase half of WIND’s spectrum at $0.50 on the dollar.
Canadians have long craved for a new wireless carrier to bust onto the scene and break up what is often described as the anti-competitive practices of incumbents Bell, Rogers and TELUS (aka “The Big Three”). Following Industry Canada’s 2008 auction of Advanced Wireless Services, the majority of hope was placed in a swaggering upstart which recently announced it would operate under the WIND brand name. But this Thursday, the Canadian Radio-television and Telecommunications Commission informed WIND that it that it couldn’t go live with its HSPA network. The reasoning behind the CRTC’s decision was that if felt WIND’s parent company, Globalive Wireless, did not meet the criteria set forth in the Telecommunications Act which stipulates all carriers must be majority owned and controlled by Canadians. To meet these requirements, at least 80% of the board of directors and voting shares must be controlled by Canadians and the company cannot be “otherwise controlled by persons that are not Canadian.” What the CRTC found was that Oracsom, Globalive’s Egyptian financiers, controlled 65.1% of WINDs equity, the Canadian rights to the WIND brand, carried the majority of the company’s debt and that liquidity rights were “inconsistent with the relative voting interests of the shareholders.” The situation is complex, but all is not lost for WIND. With this in mind, we sat down with WIND’s CEO Ken Campbell and asked him what the future holds.
Back in August, Globalive, a big winner in Canada’s AWS auction, announced that it was going to launch its network under the WIND brand and shake up the Canadian wireless industry. Now it looks as if this will not be happening — at least in the immediate future — as the Canadian Radio-television and Telecommunications Commission (CRTC) ruled yesterday that WIND does not meet the Canadian ownership rules. The rules, which are set out in the Telecommunications Act, stipulate that wireless carriers must be majority owned and controlled to the sum of 80% by Canadians. Because Orascom, an Egyptian company, owns 65.1% of the equity in WIND as well as the rights to the WIND brand in Canada, the CRTC ordered that WIND not launch its network until the company is fully compliant with the Act. Strangely enough, during last years wireless spectrum auction, Industry Canada ruled that WIND did indeed meet Canadian ownership laws as set out in the Telecommunications Act, but strong opposition from the existing major carriers — Bell, Rogers and TELUS, companies whose ownership meets complies with the Act — at a hearing on October 1st likely helped the ruling. So what does the future hold for WIND and its $442mm CAD ($413.8mm USD) worth of 1700MHz UMTS/HSPA spectrum? Nothing unless it manages to re-organize its board and find new investors. More →