Telecom Commission Letter Addressed to Ice Wireless and Rogers Communications Inc.

Ottawa, 7 July 2016

Our reference: 8620-J106-201601633

BY EMAIL

Mr. Samer Bishay
President & CEO
Ice Wireless
675 Cochrane Drive, 6th floor, East Tower
Markham, Ontario L3R 0B8
regulatory@icewireless.ca

Mr. David Watt
Senior Vice President – Regulatory
Rogers Communications Inc.
333 Bloor Street East, 9th Floor
Toronto, Ontario M4W 1G9
david.watt@rci.rogers.com

Dear Mr. Bishay and Mr. Watt,

Re: Part 1 application by Ice Wireless Inc. relating to Rogers Communication Inc.  attempt to disconnect Ice Wireless Inc. and the proper interpretation of Telecom Regulation Policy CRTC 2015-177 – Request for interim relief

With this letter, the Commission grants the request for interim relief made by Ice Wireless Inc. (Ice Wireless) in the above-noted application filed pursuant to Part 1 of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure for the reasons set out below.

On 15 February 2016, the Commission received the above-noted application from Ice Wireless in which it requested that the Commission rule on whether Rogers Communications Canada Inc. (Rogers) is required to provide wholesale wireless roaming access to the customers of its affiliate Sugar Mobile Inc. (Sugar Mobile). Sugar Mobile is a mobile virtual network operator (MVNO) offering wireless service using a combination of Wi-Fi access and cellular data. Outside of Ice Wireless’ network territory, Sugar Mobile customers roam on Rogers’ network as a result of the roaming agreement between Ice Wireless and Rogers.

In its application, Ice Wireless requested that the Commission grant interim relief while considering its request for final relief by preventing Rogers from prohibiting customers of Ice Wireless or Sugar Mobile from roaming on its mobile network.

In a letter dated 16 February 2016, Commission staff established a process with respect to Ice Wireless’ request for interim relief. Comments were received from Bell Canada (Bell), the Canadian Network Operators Consortium Inc. (CNOC), Bragg Communications Inc., carrying on business as “Eastlink” (Eastlink), Public Interest Advocacy Center (PIAC), Rogers, and Vaxination Informatique (Vaxination).

BACKGROUND

In the fall of 2015, during private discussions between Rogers and Ice Wireless before Sugar Mobile was launched, Rogers stated to Ice Wireless that their roaming agreement did not allow Sugar Mobile customers to roam on its network when they are not resident of Ice Wireless’ territory. In November, Ice Wireless advised Rogers that Sugar Mobile had made other arrangements and would not need Rogers’ services.

On 2 February 2016, Rogers, having discovered that Sugar Mobile had launched and was using Rogers’ network to provide the cellular portion of its service, stated  that it would be terminating its roaming agreement with Ice Wireless on 16 February 2016 for breach of contract. Rogers submitted that the agreement was only intended to permit Ice Wireless customers traveling outside of Northern Canada to roam where Ice Wireless does not have a network and that the Sugar Mobile service is essentially permanently roaming on Rogers’ network, which clearly contravenes several terms of the agreement. However, after Ice Wireless filed this application with the Commission, Rogers agreed to withhold terminating the agreement until the Commission ruled on the request for interim relief.

While Rogers’ issue is with Sugar Mobile’s reliance on the roaming agreement, because the agreement is with Ice Wireless,  Rogers’ proposed termination would not only impact Sugar Mobile’s customers, but also Ice Wireless’ customers, as Rogers stated that it is unable to distinguish between the two at this time.

The terms and conditions applicable to Rogers’ wholesale wireless roaming service are set out in a tariff that was approved on an interim basis by the Commission on 30 November 2015. The rates were approved on an interim basis in Telecom Order CRTC 2015-537.Footnote 1 The  interim tariff incorporates by reference the terms and conditions of the roaming agreement between Ice Wireless and Rogers that was in place on 5 May 2015, when the Wholesale Wireless PolicyFootnote 2 was issued, to the extent that those terms and conditions are not inconsistent with the terms and conditions in the interim tariff.

Because it considered that its efforts would best be employed in working on the broader proceeding to consider the final tariff for Rogers’ wholesale roaming service, the Commission did not examine in depth  the substance of the roaming agreements in place between carriers on 5 May 2015 that were incorporated by reference into the interim tariff. The Commission is currently examining the submissions in the wholesale roaming tariffs, including the appropriateness of Rogers’ proposed terms and conditions, which have been called into question through submissions in the intervention process.  

SHOULD THE COMMISSION GRANT ICE WIRELESS’ REQUEST FOR INTERIM RELIEF?

The test for interim relief

To assess applications for interim relief, the Commission’s practice is to apply the criteria set out by the Supreme Court of Canada in Manitoba (Attorney General) v. Metropolitan Stores (MTS) Ltd. [1987] 1 S.C.R. 110, and modified in RJR-MacDonald Inc. v. Canada (Attorney General) [1994] 1 S.C.R. 311. These criteria (the interim relief criteria) are that (i) there is a serious issue to be determined, (ii) the party seeking the interim relief will incur irreparable harm if the relief is not granted, and (iii) the balance of convenience, taking into account the public interest, favours granting the interim relief. To be successful, an applicant must establish that it meets all three criteria.

Positions of parties

Ice Wireless submitted that its application is clearly not frivolous, as it requires the Commission to examine, for the first time since the Wholesale Wireless Policy was issued, the interrelation between this policy, a previously negotiated roaming agreement, and the interim wholesale tariff of a national mobile wireless carrier.

Ice Wireless submitted that, while it has roaming agreements with other carriers, Rogers is the only carrier with which it has a national roaming agreement and that if it were disconnected, it will lose the ability to provide roaming services in large parts of the country, including Ontario, Manitoba, and Saskatchewan. It added that, as a result, it would certainly suffer unquantifiable and irreparable harm, as it would experience a significant loss of subscribers to other operators and would have difficulty sustaining itself as a viable business.

Ice Wireless added that, if Sugar Mobile loses access to roaming on Rogers’ network, it would also cause irreparable harm and likely prevent many Canadians from being willing to try the service or other innovative mobile wireless services.

Ice Wireless argued that the balance of convenience favours granting the interim relief because if it’s request is denied, both Ice Wireless’ and Sugar Mobile’s existence as viable businesses will be threatened, whereas the impact on Rogers will be negligible, as it is the single-largest mobile service provider in Canada. It also noted that Ice Wireless and Sugar Mobile are not roaming on Rogers’ network for free, but are required to pay tariffed rates, which are cost-based and designed to fairly compensate a wholesale service provider as well as provide a reasonable return on investment.

CNOC, PIAC and Vaxination supported Ice Wireless’ request for interim relief. Vaxination submitted that no action should be taken to terminate service until the final roaming tariffs are approved.

Rogers disputed Ice Wireless’ request for interim relief order as its roaming agreement with Ice Wireless permits its termination where there has been a breach. It added that Ice Wireless could have corrected the breach and come into compliance with the roaming agreement by preventing Sugar Mobile from accessing and marketing Rogers’ network service to persons residing outside Ice Wireless’ territory. It further submitted that roaming by Sugar Mobile customers residing outside of Ice Wireless’ territory on its network is contrary to its interim tariff.

With respect to the interim relief criterion, Rogers agreed that there was a serious issue to be determined.

With respect to the second interim relief criterion, Rogers and Bell submitted that because Ice Wireless has roaming agreements with other carriers, it does not need to rely on Rogers’ network; hence neither Ice Wireless nor Sugar Mobile would suffer irreparable harm if Rogers were to terminate the roaming agreement.

With respect to the third interim relief criterion, Rogers submitted that the balance of convenience does not favour permitting Ice Wireless to continue to breach its roaming agreement with Rogers. It submitted that Sugar Mobile customers who do not reside in Ice Wireless’ licensed serving territory and do not take wireless mobile service on Ice Wireless’ Home Network are clearly not roaming and have no right to use Rogers’ network.

Bell submitted that if the roaming agreement prohibits permanent roaming, then it would be highly inappropriate for the Commission to preclude Rogers from terminating it, particularly when it seems that Sugar Mobile has built its business model on an activity prohibited under the agreement.

Eastlink submitted the Commission should be cautious about granting the interim relief sought by Ice Wireless as there is already evidence on the public record that Ice Wireless may be operating outside the policies and regulations set out in the Wholesale Wireless Policy.

Commission’s analysis and determinations

With respect to the first interim relief criterion, if an application is not clearly frivolous, it will generally meet this standard. In this case, the issue is whether Rogers is required to provide wholesale wireless roaming access on its mobile network to the customers of Sugar Mobile. This is a serious issue to be determined, and Rogers has also acknowledged that it is a serious issue. Accordingly, the Commission considers that Ice Wireless has satisfied the first interim relief criterion.

As to the second criterion, “irreparable” harm requires an analysis of the nature of the harm, rather than its magnitude. Harm is more likely to be irreparable where there is an unquantifiable loss or a loss that the applicant may not be able to recover. Rogers’ proposed termination of service would cause direct harm to Ice Wireless and Sugar Mobile, as, even if Ice Wireless has other roaming agreements, there would be large areas in which their customers would lose service.

Ice Wireless is an established telecommunications service provider (TSP) and the normal daily usage of mobile services by Ice Wireless’ customers is expected to be within Ice Wireless’ own serving territory, which would be unaffected by the termination of the roaming agreement with Rogers. However, if the roaming agreement were terminated, even on an interim basis, Ice Wireless’ customers would no longer be able to roam when travelling outside of Ice Wireless’ territory in areas where the roaming service is provided by Rogers. The harm to Ice Wireless would likely be significant, as many of its customers could decide to change service provider for the reason that they are prevented from roaming nationally.

Sugar Mobile is a new commercial TSP that is not well established. As such, market loss would be inevitable and, given the competitive nature of the wireless industry, it would be very difficult to repatriate customers that were lost. Furthermore, Sugar Mobile has already developed arrangements and business relationships with retailers and invested substantial resources in the marketing of the service. Absent interim relief, these arrangements with retailers would likely be endangered and thereby prevent Sugar Mobile from operating under its current business model. Disconnection of roaming services solely for Sugar Mobile and its customers is not practical, since, as Rogers has indicated, it is unable to distinguish between customers of Ice Wireless and Sugar Mobile at this time.

Accordingly, the Commission is of the view that Ice Wireless and Sugar Mobile would very likely incur irreparable harm if interim relief were not granted and considers that Ice Wireless has met the second criterion of the RJR-MacDonald test.

With respect to the final criterion, balance of convenience, given the finding that Ice Wireless and Sugar Mobile would very likely incur irreparable harm absent interim relief, the presumption is that the balance of convenience favours the granting of interim relief and that it would require special circumstances to rebut this presumption. The Commission considers that no such special circumstances exist in the present case. Pending the Commission’s consideration of the matter of final relief, Rogers will be compensated by Ice Wireless and Sugar Mobile for their use of Rogers’ network by way of cost-based interim tariff rates. Further, because of its size and market power, the harm, if any, to Rogers resulting from approval of the interim relief request is clearly disproportionate to the irreparable harm likely to be suffered by Ice Wireless and Sugar Mobile, absent interim relief.  As such, the Commission considers that the balance of convenience favours granting the interim relief and that Ice Wireless has met the third criterion of the RJR-MacDonald test.

In light of the foregoing, the Commission grants Ice Wireless’ request for interim relief. Accordingly, Rogers is not permitted to terminate its roaming agreement with Ice Wireless or disconnect either Ice Wireless or Sugar Mobile from its mobile network pending disposition of the request for final relief. As noted above, there is an on-going broader proceeding to consider the final tariff for Rogers’ wholesale roaming service. In that process, interventions have been filed which address the appropriateness of the roaming arrangements such as those undertaken by Sugar Mobile customers that are the subject of the interim relief application at issue in this case. Given that the Commission will be ruling on a final basis in that proceeding on the nature of the roaming arrangements that are to be mandated, the outcome of that proceeding will have a significant bearing on the disposition of Ice Wireless’ request for final relief.  Given this, the Commission expects to rule on Ice Wireless’ request for final relief in light of the broader proceeding to consider the final tariff of Rogers’ mandated wholesale roaming service.

Yours sincerely,

Original signed by Véronique Lehoux for/

Danielle May-Cuconato
Secretary General

c.c.:  Christian Tacit, ctacit@tacitlaw.com
Geoffrey White, gwhite@piac.ca
John Lawford, jlawford@piac.ca
Philippe Gauvin, bell.regulatory@bell.ca
Nathalie MacDonald, regulatory.matters@corp.eastlink.ca
Jean-François Mezei, jfmezei@vaxination.ca
William Sandiford, regulatory@cnoc.ca
Dennis Béland, dennis.beland@quebecor.com
Josh Tabish, regulatory@openmedia.org
Kim Wardle, kim.wardle@crtc.gc.ca
Josiane Lord, josiane.lord@crtc.gc.ca

Footnotes

Footnote 1

Various Companies – Interim approval of tariff applications, Telecom Order CRTC 2015-537, 3 December 2015

Return to footnote 1

Footnote 2

Regulatory framework for wholesale mobile wireless services, Telecom Regulatory Policy 2015-177, 5 May 2015

Return to footnote 2

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