The head of Rogers says it may have to cut back $3 billion on planned investment in technology networks, including 5G, this year if it doesn't like the government's new rules.
In an analyst call on Wednesday Joe Natale, the CEO of Rogers, said, “We need regulation that encourages investment and fuels innovation. Punitive regulation will slow or worse stall 5G deployment.”
The fifth (5G) and next generation of wireless is supposed to be a better, faster mobile internet. It’s important for all the devices that need to be connected all the time (for “smart” cars and homes).
Natale’s comments come as Canada’s national regulator, the Canadian Radio-television and Telecommunications Commission (CRTC) is looking into forcing the biggest, most established companies to lease their wireless capacity at wholesale prices to rivals. This would mean competitors can then offer you deals on one of your biggest bills. But there’s a lot of pushback from Canada’s Big Three, Rogers, Telus, and Bell. (Disclosure: VICE has a partnership with Bell Media).
Digital advocacy group OpenMedia calls Natale’s words “another corporate shakedown” of the Canadian government and the public.
“Billions of our taxpayer money has been given to these companies to build the infrastructure that they use to provide broadband and wireless services,” said Marie Aspiazu, digital rights campaigner at OpenMedia. “You would expect that they would be willing to give a little bit back to the people. But what we see is some of the greed of these companies.”
Canada’s Big Three are among the most profitable in the world and charge some of the highest mobile data rates. According to the CRTC, the average household’s monthly cell phone bill is $101. Digital policy expert Michael Geist says the rest of the world views what we have “as one of the most expensive and least competitive markets in the world.”
Geist, who also holds the Canada Research Chair in Internet and E-commerce Law, says while all major carriers need to invest in 5G to be relevant, Natale’s words are an empty threat.
“Wireless providers around the world facing far more competitive environments than Rogers invest in 5G and there is every reason to believe Canadian carriers too,” Geist said.
Rogers is the first and only company in Canada to offer 5G in Vancouver, Toronto, Ottawa, and Montreal (just the service for now, which would be ready to go when 5G devices are sold later this year).
In an email to VICE, the CRTC said it can’t comment on Natale’s threat because it’s currently reviewing cell service across Canada. Next month, the CRTC will hold hearings on what to do about the mobile wireless situation.
One of Prime Minister Justin Trudeau’s campaign promises was to reduce cell phone bills by 25 percent. We haven’t heard much about this since he took office although it was in Innovation, Science and Industry minister Navdeep Bains’ mandate letter. And on Thursday a spokesperson told VICE that “cell phone and wireless bills are putting too much pressure on Canadian household budgets” and “we have given clear direction to the CRTC to promote competition, affordability, consumer interests, and all forms of investment in their telecommunications decisions.” Which is basically punting it back to the regulator.
Correction: An earlier headline incorrectly stated that Rogers was threatening to cut back on 5G if the government forces it to be competitive. In fact, Rogers was referring to "punitive regulation," not being competitive. This version also clarifies that Rogers is spending nearly $3 billion not just for 5G but to expand communications infrastructure, which includes 5G.
Follow Anne Gaviola on Twitter.