CRTC RULING 'A BIG NOTHING'
Watchdog orders big wireless firms to sell access to networks but decision expected to apply to very few smaller players
A landmark decision from the CRTC that will force the country’s large wireless providers to give regional players access to their networks may boost competition in the sector, but also appears to provide some victories to the incumbents, industry watchers said Thursday.
The Canadian Radio-television and Telecommunications Commission ruled Thursday that it will mandate Canada’s big wireless companies to provide smaller regional wireless providers wholesale access to their networks for seven years. In that period, smaller players are expected to invest in and migrate customers to their own networks, after which regulations will be phased out. The CRTC is stopping short of mandating wholesale rates, however, and expects parties to negotiate on a set price.
Mobile virtual network operators, or MVNOS, which the commission had been considering in its consultations, will not be allowed to directly access incumbents’ networks. Rather, MVNOS will be allowed to purchase access to networks on a tertiary level, through the regional carriers.
Tim Denton, the former national commissioner of the CRTC, said the regulator’s ruling will not spur increased competition due to the neglect of MVNOS, which exist to provide cheaper services without investing in infrastructure.
“It’s nothing. It’s a big, nothing-burger,” said Denton. “Only a small number of companies would be able to build up (infrastructure), only a small number companies would be able to qualify for having pulled the spectrum that would make it useful,” he said.
Matthew Dolgin, an equity analyst at Morningstar Inc., called the ruling “a little bit negative for the big three wireless providers,” in an interview with BNN Bloomberg Television.
“However, I don’t look at it in a vacuum. I think you have to look at the proposed Shaw-rogers merger right with it,” Dolgin said.
BCE Inc., which owns Bell Mobility, said they are studying the CRTC’S decision and considering their options.
“Bell’s focus remains on serving our wireless customers with a full range of affordable pricing options,” the company said in an emailed statement.
The Canadian Wireless Telecommunications Association, an industry group which represents incumbents, also said it will take time to study and analyze the CRTC’S decision, which dropped after markets closed.
“Providing world-class telecommunications services to all Canadians at affordable prices remains the focus of our members,” the group said in an emailed statement.
Canadian government policy for more than a decade has been to encourage a fourth player. Prime Minister Justin Trudeau’s government has also been putting direct pressure on wireless providers, targeting a reduction in the cost of services by 25 per cent by 2022 and using the threat of further regulation.
But while the big telecom firms have been on the political defensive for years, officials in Ottawa have become more open to warnings that too much forced competition could undermine the nation’s rollout of 5G networks.
While the CRTC is an independent body, the Canadian government can issue directives or ask it to reassess its rulings.
“We will be reviewing the decision and its implications to ensure they align with the government’s goals of promoting competition, affordability, consumer interests and innovation,” Champagne said in a statement.
The CRTC is also ordering the dominant carriers to sell lower-cost plans. By July, Bell, Telus and Rogers will be expected to “offer and promote” monthly wireless plans for $35 that include three gigabytes of data and unlimited messaging within Canada. They must also offer cut-rate plans for people who don’t use their phones often, for $15 a month.
The rules also apply to Saskatchewan Telecommunications Holding Corp., or Sasktel, a government-owned telecom in the western province.
“While there are encouraging signs that prices are trending downward, we need to accelerate competition and more affordable options for Canadians,” CRTC chairman Ian Scott said in a statement.
The CRTC also said the major telecom companies may negotiate directly with resellers of wired internet service, instead of the regulator mandating a specific price. This comes after a 2019 ruling that cut wholesale rates.
That part is a win for the national carriers, which have said the new rates were below cost and could jeopardize future spending on networks, resulting in slower expansion of broadband into remote or rural areas. The federal government agreed with them, and asked the regulator to reconsider.
I DON’T LOOK AT IT IN A VACUUM. I THINK YOU HAVE TO LOOK AT THE PROPOSED SHAW-ROGERS MERGER RIGHT WITH IT.