Canada's ruling Liberals to target wireless bills in election: sources

By David Ljunggren

OTTAWA (Reuters) - Canada's ruling Liberals will promise to help cut cell phone and internet bills in an upcoming election campaign amid widespread complaints about the cost of wireless communications, party sources said.

One option being studied is a cap on bills, the sources said, while another is to oblige major providers to offer wholesale access to Mobile Virtual Network Operators (MVNOs), which are smaller outfits without their own infrastructure.

The Liberals, tied in the polls with the official opposition Conservatives ahead of the Oct. 21 vote, want to tackle bills they say are much higher than in other industrialized nations.

Liberal officials knocking on doors as election preparations heat up say the cost of phone bills and internet is one of the most frequent complaints they hear.

“Canadians shouldn't be paying more for their already very expensive internet and communications services, and that is something we will take into account,” Prime Minister Justin Trudeau told reporters on Monday.

The three main wireless providers - BCE Inc's Bell unit, Rogers Communications Inc and Telus Corp - account for around 90% of the market.

Consumer advocates have long complained this leads to gouging that particularly hits the poor.

The Canadian Radio-television and Telecommunications Commission (CRTC), which regulates the industry, said wireless costs account for almost 9% of the household income of the bottom 20% of Canadians.

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In December, Canada's innovation ministry released an independent report that showed while prices were gradually falling, Canadian monthly plans with two gigabytes of data still cost an average C$75.44 ($56.83).

The equivalent price in the United States was C$61.26 while in Rome it was just C$21.11. In Australia, like Canada a vast underpopulated country, the figure was C$24.70.

The major telecommunications providers disagree with the study and say costs are roughly comparable with those elsewhere. The Liberals though are determined to act.

“There are two choices: legislate or push through measures to boost competition,” said one of the sources, who requested anonymity given the sensitivity of the situation.

Bell and Rogers referred queries to the industry group Canadian Wireless Telecommunications Association (CWTA). Telus did not respond to requests for comment.

In February, Innovation Minister Navdeep Bains ordered the CRTC to focus more on affordability and lower prices.

The CRTC said earlier this year it was looking into whether it should order the major players to offer more access to the MNVOs, which complain they are effectively being shut out.

The major firms say they are investing billions in infrastructure to ensure coverage for just 36 million people scattered across the world's second-largest country. Over-regulation will cause speed and quality to slip, they add.

“When you get into an election campaign you get into emotion sometimes,” said CWTA President and Chief Executive Robert Ghiz.

“It's extremely important that any political party make sure they don't put too much short-term thinking into something that is going to drive our economy,” Ghiz said in an interview.

The CRTC this month ordered a cut in the rates that third-party internet resellers pay the major firms for access.

Bell said the move would cost it C$100 million, and it cut plans to extend internet broadband to smaller towns by 20%, which angered Bains.

The left-leaning opposition New Democrats, who could end up keeping Trudeau's government in power if the Liberals fail to win another majority in October, are also promising a crackdown. The Conservatives, seen as being more friendly toward big business, are looking at a tax rebate to help cut bills, said a well-placed source.

Marie Aspiazu of OpenMedia, a non-governmental organization pushing for cheap widespread internet access, conceded prices were falling slightly.

“Is it better than nothing？ Yes. But are we doing great？ No, I think we can do a lot more,” she said by phone.