Cogeco calls for regulated access to wireless networks

Cogeco Cable Inc. wants the CRTC to set up regulated access to established wireless carriers’ networks, president and CEO Louis Audet said during a conference call with media Thursday. “The conditions for the creation of MVNOs in Canada do not exist today in any form,” he said. “So we are making a number of suggestions to the commission that would create the regulatory environment where this new form of mobile network operator could appear and help increase the competitive nature of the wireless market in Canada.” The comments come ahead of CRTC hearings next week looking into Canada's wholesale wireless market. Audet said that this would be “a competitive model that has worked well in other jurisdictions, including the United States, Europe” and could encourage investments by a number of players. Cogeco has previously said it is interested in entering the wireless market as an MVNO if the CRTC opens up the market by mandating easier wholesale access to incumbents’ networks. Audet said the access fees rates in this model must be “negotiated either by minute of conversation or by megabit of data or by number of text messages,” and mandated by the CRTC and not “left to private negotiation.” He said it’s “the same idea” as the regime for wireline Internet access that the CRTC has in place right now. “If this doesn’t happen, there will be no MVNOs in the country, as is the case today,” Audet said. Analyst Troy Crandall of 3Macs noted in an email that carriers like Eastlink and Quebecor Inc.'s Videotron have moved away from operating as MVNOs, likely due to the “issue of having full control.” “An MVNO is ultimately at the mercy of the underlying carrier’s technology and pricing,” Crandall said. Audet said that if it launched an MVNO service, Cogeco’s “primary area of interest” would be the areas where it currently operates, such as Quebec and Ontario. In a research note, Canaccord Genuity analyst Dvai Ghose said that “strict MVNO mandates from the CRTC are highly unlikely,” since, among other reasons, a facilities-based model has always been the focus of regulators in Canada and the tools favoured by the government to increase competition have always been spectrum set-asides and caps. He added that “if the CRTC does enact rules that favour MVNOs, we assume that the first to protest would be facilities-based new entrants like Videotron, which has already spent nearly $800 million on spectrum and over $1 billion on infrastructure and , which has spent $442 million on spectrum and invested $1 billion on top of that on infrastructure.” Executives at Rogers Communications Inc. and Telus Corp., which have national networks, were also against the idea of mandating MVNOs. Ken Engelhart, senior vice-president of regulatory affairs at Rogers, said in a phone interview that “mandating MVNOS in a market with this many competitors would also be incredibly unusual." In a phone interview, Ted Woodhead, senior vice-president of regulatory affairs at Telus, said that MVNOs “have not been successful practically anywhere else because they're pure resellers.” Greg MacDonald, an analyst at Macquarie Capital Markets, said in a phone interview that the government and the CRTC both have a “bias” toward facilities-based competition. He noted that the recently proposed buyout of Wind gives the government “more confidence immediately, right now, that a facilities-based fourth carrier will be in the market.” He said MVNOs were, in his view, something the government would be willing to consider as a “last ditch effort” if it looked like a fourth facilities-based carrier wasn’t going to emerge. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Cogeco calls for regulated access to wireless networks

News | September 25, 2014

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Cogeco calls for regulated access to wireless networks

News | September 25, 2014

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