New operators face scrutiny from CRTC
Debate grows over merits of changing policy to allow smaller mobile operators wholesale wireless access
Canada’s biggest wireless providers are fighting for the status quo in a process that could open up the wireless market to mobile virtual network operators, smaller players conversely seen as affordable options or investment killers.
The Canadian Radio-television and Telecommunications Commission is reconsidering a decision that largely blocked the existence of Wi-Fi first providers and MVNOs, operators that don’t own radio spectrum and rely in part on wholesale access to existing networks for connectivity.
The CRTC reckoned that mandated wholesale access could discourage network investment, but the federal government asked it to reconsider its decision in the name of making talk cheaper, particularly for low-income Canadians.
It’s a rare move by the federal government, so many expect some level of policy change.
But a major debate is shaping up over what the final policy should look like.
In submissions to the regulator this month, the Big Three providers Rogers Communications Inc., BCE Inc. and Telus Corp., all armed with expert reports, argued against mandated wholesale access to their wireless networks.
They contended MVNOs reduce their incentive and ability to invest in wireless networks, which could hurt the rollout of a next generation 5G network.
They also argued MVNOs, which only have incremental costs, would undermine the massive investments made by new entrants such as Shaw Communications Inc.’s Freedom Mobile and Quebecor Inc.’s Videotron.
Plus, the Big Three argued that Canadian wireless market is competitive and that service is actually relatively affordable.
Basic service can be had for 0.5 per cent of a low-income person’s annual income, according to a report prepared for Bell by Ottawa consulting firm Wall Communications Inc.
The report found that the lowest priced plans in Canada are middle of the range when compared to its G7 peers as a percentage of low income.
Even if the federal government stands by its conclusion that wireless prices aren’t affordable, the Big Three argued that MVNOs and Wi-Fi first providers aren’t the best way to increase affordability.
Bell blamed high smartphone prices for the higher cost of service, especially given the low Canadian dollar, and suggested extending wireless contracts to up to four years to reduce the upfront cost.
Rogers recommended a voucher program in which low-income Canadians could apply for a voucher to reduce their wireless costs.
Consumer groups and wholesale providers came out in favour of MVNOs and Wi-Fi first providers as a way to make the national market more dynamic.
Mobile services delivered by WiFi are already available in many parts of the world, including from companies such as Google in the U.S., according to the submission from the Internet Society Canada Chapter.
“By expanding the definition of home network to include Wi-Fi based MVNOs, the commission would pave the way for improvements in affordability for all Canadians,” it submitted.
The Public Interest Advocacy Centre agreed that consumer welfare gained by lower retail rates from MVNO entry would outweigh concerns about network investments.
The Canadian Network Operators Consortium noted the national wireless players have 90 per cent of the market share and argued the market is getting more concentrated given Bell’s purchase of Manitoba Telecom Services. It argued that mandated MVNOs could increase choice and affordable options in the market.