TELUS and Bell: Verizon Use of Incumbent Cell Towers Should Be Blocked

Things can get pretty complicated, and the current setup of the Canadian wireless market is doing nothing except making things really messy. What if incumbents have the power to say no to new players when it comes to allowing them to use the network infrastructure they have built during the past decade? What does this mean for Verizon? Well, it doesn’t look good at all.

celltower

After posting impressive quarterly earnings, Bell and Telus have decided to speak out and demand the government block new entrants from using the cell towers they have put their money into during the past ten years (via Financial Post). It’s theirs they say. And they are requesting one “simple” thing: If Verizon decides to enter the Canadian market, that it be forced by law to invest in its own cell towers instead of using the country’s incumbent wireless carriers, Bell and Telus say.

As they point out, both have spent billions building their network infrastructure. For what? For a deep-pocketed newcomer to cherry pick struggling wireless startups and start using the cell towers the incumbents have built.

As a result, they are now asking Ottawa to close this major loophole in its wireless policy and ensure that any new entrant — such as Verizon — be required to build its own network. And they want this now: before the September 17 deadline for spectrum auction sign-up.

Also, they want to have access to the same two blocks of spectrum the new entrants are entitled to.

According to Telus and Bell’s calculations, Verizon could have access to spectrum that was sold to new entrants at a 41% discount compared to the amount incumbents obtained network licenses.

Even Quebecor chief executive Robert Dépatie has said that Verizon’s entrance onto Canadian soil would be catastrophic to regional players such as Videotron, since the entrants would end up empty handed.

After impressive growth recorded in urban areas, the next battlefield is rural areas. Verizon could threaten this expansion, since it would prompt incumbents to focus their energy on the battlefield, which, in this scenario, is the urban areas again.

What do you think? Should Ottawa allow Verizon to use Bell and Telus’ network infrastructure?

Technology enthusiast, rocker, biker and writer of iPhoneinCanada.ca. Follow me on Twitter or contact me via email: istvan@iphoneincanada.ca

  • Jimmy

    Looks like Bell and TELUS want to become celltower landlords.

  • ward09

    Well I’m certain that Verizon would have to pay for using the existing infrastructure until they built their own. For the incumbents, it might actually be preferable in the long run to rent them infrastructure, as Verizon could undercut them once they have their own.

    Also, does anyone have any suggestions where I might find some reading materials on spectrum? I’m not really clear how it works – specifically the capacity, and also why the new spectrum is considered such good quality compared to what Wind already has.

  • JB

    The more I read about Verizon the more I wish it was T-Mobile that the government was courting. I’m not really that sure another full-price national player is what we want, unless they’re willing to aggressively compete…

  • Rachel

    I still don’t understand why the Big3 are so adamant about Verizon. Even if Verizon uses the cell-towers, they would still have to have plans and deals that are better than the Big3. So the only conclusion I can come up with is that Verizon will have cheaper plans with more services/features.

    All this talk from the Big3, especially Bell, after hearing more than a few radio ads pleading Canadians to think twice about job loss and being unfair, I say the only reason for Bell to take that side is that Bell knows every product they have to offer is a rip off. And the only way for Bell to continue to make huge profits is to cut jobs. If Bell was so great, there wouldn’t be a need to be scared of Verizon.

  • PRSHAN

    5 days left when VERIZON call for Board of Directors meeting
    on Tuesday Aug 13th 2013 on CNBC

    Canadian telecom history will change if or not

    the Fate of WIND/MOBILICITY is in the hands of VERIZON and there Board of Directors now

    WIND/MOBILICITY will be merge as VERIZON WIRELESS CANADA

    TORONTO SUN POLL

    Do you think it’s a good idea for Verizon to enter the Canadian market?
    http://www.torontosun.com/2013/08/08/ottawa-set-to-leave-telecom-door-open-for-verizon
    85% CANADIAN SUPPORT VERIZON
    15% SUPPORT THE BIG 3 AND THERE 150 C.E.O UNIONS

    Mark your calender you guys and your finger cross 🙂

    THE END IS NEAR FOR THE BIG 3

  • Al

    Since when can carriers use other carrier’s towers (unless there’s an agreement in place, such as Telus with Bell). I can’t say as I have ever experienced that benefit – as I get terrible to no reception in certain areas, where other’s have great reception. Perhaps I’m misunderstanding. But if this were actually a “thing”, then why can’t Wind use other company’s towers? Sorry, but I’m clearly ignorant on this topic.

  • John

    Verizon must be very serious because I’ve seen a couple of Verizon network trucks in Mississauga, ON likely scouting the wind/mobilicity networks

  • nickbergantini

    I don’t understand. Won’t RoBelLus get paid for the presumed Verizon to use their towers? Or are they saying they don’t want VZW to add equipment to their actual Tower Poles?

    This is getting ridiculous.

    I understand RoBelLus wants $80 for 500mb on a 2 yr, and VZW does as well according to their websites, but I don’t see how more choice is bad.

    Agreed they should all be able to bid on spectrum, but the whining and misleading marketing asking me to stand at the border with a pitchfork and poke at anything wearing Blue(as opposed to just Red and White) is silly.

  • Tuna7

    Kind of odd, since here in Saskatchewan TELUS and Bell both use towers built by Sasktel…

  • Yes, I believe the Big 3 will be paid by Verizon to use their towers.

  • nickbergantini

    Thanks Gary. The only reason for them to ask for a Block then is to void any existing roaming agreement VZW may gain by swallowing-up Mobilicity/Wind, which is more interesting since I think Rogers is the roaming partner for Wind, and they’re not mentioned in this complaint…

    I wonder if those roaming agreement contracts lack a clause forcing re-negotiation of the terms if Wind/Mobilicity are purchased – resulting in this new complaint.

  • Sven L

    Quite hypocritical that these two are crying afoul when they both share towers between themselves. TELUS owns the majority of the towers in the west, and likewise Bell owns towers in Eastern Canada…

  • I’m confused. Who owns the towers? If Bell and TELUS are saying that they paid to build the towers, then surely they most own the towers and can decide themselves if they want to lease tower space to Verizon or force them to build their own. If the government owns the towers, then I’m guessing Bell and TELUS didn’t pay to build them after all. I can’t imagine Bell and TELUS would have paid to build a bunch of towers and then hand them over to government ownership. That doesn’t sound like them.

    This sounds to me like two toddlers upset about a new kid entering their toy-filled playroom, because now there are less toys to go around and they feel it isn’t fair, even though the playroom and toys are all owned by the preschool.

  • Just discovered that the Bell and Telus do in fact own the towers. So then I’m confused as to what the government would be forcing them to do. Surely anything they’re obligated to do they’ve already agreed to at some point with some sort of blanket contract? I’m guessing they just didn’t know it was going to be Verizon, and now they’re trying to back out.

  • Jordan

    my honest opinion I want Verizon to be in this country to Give the big 3 competition
    the big three been ripping people off for the past decade this is good for Canada Verizon I’m with it all the way.

  • trancen

    I believe it goes back to the days of Bell Canada sharing their landlines with other companies. I believe it’s the same with the cell towers.

    What I don’t understand is why didn’t the big 3 cry me a river when the small ones like WIND and Mobilicity form and go crying to the Gov about them using the Big3 towers? Why aren’t the small 2 allowed to piggyback on their towers now? If the towers are free to have Verizon come in and hop on it, why hasn’t WIND gone cross Canada. Still doesn’t make any sense to me.

  • 1His_Nibs1

    Hasn’t there been an issue with WIND/Mobilicity getting access as well? Isn’t that part of the reason (majority) as to why they failed and couldn’t make it work in Canada? Or is that more to do with them having AWS spectrum? I thought I read on here from another poster that being allowed on the big 3’s towers was an issue and why ultimately WIND/Mobilicity failed. So going by that logic couldn’t the big 3 do that to Verizon as well? Please correct me if I’m mistaken.

  • xxxJDxxx

    When you talk about Verizon using the ‘towers’ are we talking about the actual radio transmission equipment, or simply installing their own equipment on the physical tower itself?

    I thought I saw a post on here which said that Verizon would not use the Chinese made equipment used by Wind and the other ‘big 3’.

  • kkritsilas

    Let us keep in mind that Canadians were paying “system access fees” to help build out the cellular infrastructure of the Big 3 for over 20 years. In theory, the “system access fees” were for network improvements, which implies that the Big 3 never even paid for the networks they claim to own. Now, I am not naive to think that they used all of the “system access fee” revenues for network roll out and maintenance, in fact, I personally believe that the majority of the “system access fees” were added to revenues and used to pump up profits.

    The tower sharing provisions were part of the AWS spectrum auctions. It was required as a precondition of bidding on the AWS spectrum that the Big 3 had to share their tower space with the new entrants. However, as things worked out, the new entrants really never were able to get onto the Big 3 towers, and the Feds never really enforced that part of the AWS spectrum auction. End result was that Wind/Mobilicity had very spotty coverage.

    The preconditions for tower sharing are a lot stricter for the upcoming 700MHz. The Feds seem to have wised up tot he tactics of the Big 3, and have adjusted the rules to make sure that new entrants can finally get onto the Big 3 towers.

    If the Big 3 don’t want to let Wind/Mobilicity/Verizon onto their towers, they can do that without any doubt. However, if they intend to participate in the 700MHz spectrum auction, they must agree to the rules under which it is being held. And one of the rules is the stronger tower sharing requirement. Even so, the Big 3 will be getting paid for all usage of their towers and equipment. Do not expect that Verizon will allow that to continue long term, this will only be a stop gap measure until they can address the gaps in Wind/Wind&Mobilicity’s coverage. It doesn’t make good business sense to keep paying your competitors to carry your traffic.

    Kostas

  • kkritsilas

    Who actually owns the towers is not really much of a consideration. If the Big 3 own their towers, or lease them is a financial consideration. If they own the towers, they can say who gets on them. If they lease them, they more than likely have the right to refuse any potential user from getting onto the towers without their approval as part of the lease agreement.

    The gov’t doesn’t own the towers. The towers are owned by the Big 3, or by tower companies that lease them out to the Big 3. They, by actually participating in the AWS spectrum auction, have already agreed to share towers. It was part and parcle of bidding on the AWS spectrum. Thing is, the Feds never enforced the tower sharing regulations.

    Kostas

  • kkritsilas

    Since both Bell and Telus bid on AWS spectrum. The tower sharing was part of the rules governing the AWS spectrum auction. As all Big 3 participated in that auction, by definition, they agreed to tower share. In the real world, they never really did, but that was a failure on the part of the Feds to enforce the regulations.

    Kostas

  • kkritsilas

    700MHz has much longer range than the 1700/2100MHz spectrum currently owned by Wind/Mobiliticty. It also tends to work inside of buildings in the downtown area. The longer range means that you can build out a network with fewer towers, which is a huge cost savings. This also explains how the BIg 3 (who have 850MHz spectrum, which is similar, but not quite as good as 700MHz in most aspects) can have coverage inside of large buildings downtown while Wind/Mobilicity don’t (I am talking about buildings that don’t run their own repeaters insde the building).

    Network capacity is not easy to figure out. it is multiple variables, like how the cell sites are allocated, how many sectors are in each cell tower. what network type (CDMA, GSM, HSPA, LTE), terrain, water, humidity leves, etc. A single cell site can be set up a number of different ways to accommodate the number of anticipated users and anticipated environment.

  • ward09

    Thanks man!

  • crasucks

    The Big 3 need to pay to build the infrastructure, Verizon doesn’t. It isn’t even close to a fair deal for the Canadian companies.

  • chris

    I’m pretty sure that the Big 3 already do tower sharing, at least in the less-densely populated parts of the country. For the longest time, there was afaict only one tower here yet all three had service.

  • bonnieherrett

    I think a fair carriage fee with a time limit to build their own would be fair.