Low-cost data plans ‘superior alternative’ to WiFi-first MVNOs: Scott

Having facilities-based carriers offer low-cost data-only plans is a better way to fulfill the government’s goals of more affordable wireless options for consumers than mandating roaming access by WiFi-first mobile virtual network operators (MVNOs), CRTC chairman Ian Scott said Thursday. “The data-only plans fulfill the same objective, and other attributes that make it a superior alternative in our view,” he said in a call with reporters. “It will be available nationally. It will be available quickly. It would have taken considerably more time to amend the existing framework, perhaps as much as 18 to 20 months to enable the WiFi roaming approach, whereas this can be done in a matter of months.” Innovation Minister Navdeep Bains had directed the CRTC to reconsider a 2017 decision which reaffirmed that under the CRTC’s wholesale wireless policy, carriers don’t have to sell roaming services to WiFi-based providers. In its decision Thursday, the CRTC declined to put in place a new policy for mandated access for WiFi-based operators. Bains responded in a press release that the CRTC’s decision was “a step in the right direction, but more must be done: true affordability can only come from true competition." The release added that the government “will review the CRTC's decision to determine its next steps. The Government supports measures that promote affordability and competition in the wireless market.” In the decision, the CRTC said that it had originally mandated roaming for facilities-based operators and not MVNOs due to its concerns that mandating MVNO access “could negatively impact investment, particularly from wireless competitors and outside urban core areas.” It cited the same reasoning in deciding not to mandate WiFi-first providers. However, the CRTC also said its review of the wholesale mobile wireless framework will include a reconsideration of its policy on MVNOs. That review will begin in the next year, which Scott said was earlier than the CRTC had initially planned. “In the Commission’s view, since that framework was put in place, the mobile wireless services market has seen limited resale competition and, with the upcoming deployment of 5G technology, a review of the Commission’s framework is warranted,” the decision read. Scott maintained in the call with reporters that the decision doesn’t close the door on competition from providers who aren’t facilities-based. “It’s not that we’re … foreclosing another form of competition. It’s not in this decision and not now, but we are advancing the review,” he said. If it turns out that it’s necessary starting 2020, “then we’ll implement it.” During the CRTC’s consultation following Bains’ direction, large telecoms argued mandated access for WiFi providers would threaten their investment in future technology, such as 5G, while representatives of smaller providers asked the CRTC to take on a technologically neutral stance for what constitutes a home network, which would allow WiFi-based services to access roaming. Matt Stein, spokesman for the Canadian Network Operators Consortium (CNOC), said in an email the group was disappointed and that a “vibrant competitive retail market brings greater benefits to Canadians than using retail regulation.” He added that “to force large providers to provide a service that they have no interest in offering — in this case, skinny data instead of skinny basic , does not work. We’ve been down that road before, and didn’t find competition there either.” OpenMedia digital rights advocate Katy Anderson was also critical, saying in a press release the decision “is incredibly frustrating for Canadians who have long been fed up with paying some of the highest mobile bills in the world.” She added that while low cost data-only plans are, “on the surface” good news, it doesn’t address the principle reason for high cell phone bills, which is lack of choice and competition. Chris Seidl, the CRTC’s executive director of telecommunications, said in the call with media that the government direction wasn’t to reconsider access by all MVNOs, but to look at WiFi-first providers. “On the record, we found that most people were actually arguing for the full MVNO review, and that’s why we’ve accelerated that to within the next calendar year,” he said. When it comes to the new low-cost data plans, Scott said he expects them to be available within this calendar year. The regulator will focus on the national wireless carriers, giving BCE Inc. Rogers Communications Inc. and Telus Corp. until April 23 to “file proposals for lower-cost data-only plans.” It put in place certain parameters for those plans, including that they have to be available on the latest mobile wireless network technology, available to all consumers, and must be available both as a prepaid and a postpaid option, Scott said. That would exclude an option like Bell’s Lucky Mobile, which runs on a 3G network, launched following Bains’ direction to reconsider WiFi-based MVNOs and praised by Bains, who thanked the company for “listening and taking a step in the right direction.” The decision noted that the CRTC expects that “once additional plans are available in the market, other wireless carriers will offer similar plans of their own as a competitive response.” It didn’t specify what kind of pricing it would consider to be low-cost. There was also a third key element to the CRTC’s decision Thursday, as it released permanent wireless roaming rates. It said in the release that the rates are between 44 per cent to 99 per cent lower, “depending on the carrier and the wireless service whether it’s voice, text or data, compared to those that were available to competitors prior to the CRTC’s decision to regulate them” in 2015. Scott told reporters the new rates would “further competition from the regional players, the facilities-based wireless providers.” That aspect of the decision received some praise from an unexpected source. “They're basically going to be halved… are retroactive from 2015, which is great,” Samer Bishay, CEO of Iristel Inc., said in a phone interview. “Because we're going to continue to expand our network and, in places where we don't have coverage, we're going to rely on the incumbent.” Bishay’s Sugar Mobile was the impetus for the WiFi-first debate. It began with a dispute between Iristel and Rogers in 2016, when Iristel subsidiary Ice Wireless filed a Part 1 application with the CRTC asking it to order Rogers to allow it and its MVNO Sugar Mobile to continue to use Rogers’ wireless network. Sugar Mobile customers mostly used WiFi for voice, text and Internet access, but their plans also included 200 MB of non-WiFi data per month, which was supported by the Rogers network when outside of the Ice Wireless service area. In March 2017, the CRTC ruled that Rogers didn’t have to provide roaming services to Sugar Mobile. Bishay said that while the CRTC’s decision not to change its mind on that issue means “the Canadian consumer got the short end of the stick,” it’s also “the beginning of what I call the movement towards change.” He added that he believes mandating MVNOs “is going to happen.” Martin Masse, senior writer and editor at the Montreal Economic Institute, disagreed in a phone interview. “I don’t think they envision going in that direction...they don’t see MVNOs as the solution,” he said. “Mandating roaming for MVNOs at this point would just weaken these fourth players that we just spent the last decade propping up and encouraging, so that’s one of the main reasons why it was the right decision,” Masse said. The incumbents also avoided the “worst decision possible,” he noted. Barclays Capital analyst Phillip Huang said in a Thursday evening note that the regulator not mandating MVNO access was a relief, since that would’ve been a “short-sighted method to stimulate pricing competition.” He added: “We believe this is an important win for the facilities-based players,” such as Bell, Rogers, Telus, Shaw, Quebecor and Bragg Communication Inc.’s Eastlink, “and for consumers, because it would prevent unsustainable reseller pricing competition from impeding the multi-year investments required for ongoing innovation (e.g. 5G).” National Bank analyst Adam Shine wrote that the decision “proved rather innocuous despite some telegraphing of potential further regulatory intervention to come on the horizon, especially if the national carriers don’t address affordability for lower income households. The news appears destined to have no material near-term impact on the national carriers.” David Watt, Rogers’ senior vice-president of regulatory, said in an emailed statement that “we believe the commission made the right decision today by supporting innovation for Canadians and competition through facilities-based investment. We look forward to participating in the follow-up proceeding.” Similarly, a Telus spokesman said in an email that the company is satisfied with the decision, reinforcing facilities-based competition as the “only sustainable form.” It also said that while Telus is “proud to offer Canadians choice through low-cost data-only plans through our value brand Public Mobile,” it will fully comply with the CRTC’s request for proposal by April 23. “With respect to wireless wholesale roaming, while the rates confirmed today were lower than desired, the retro-active impact to Telus has already been substantially accounted for. We look forward to actively participating in the previously announced five year review and consultations on a wholesale wireless framework.” Sharing similar sentiments on facilities-based investment and competition in wireless, Bell spokesman Marc Choma said the company looks forward to “filing our service proposals as part of the CRTC’s process.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and reporting and editing by Ahmad Hathout at ahathout@thewirereport.ca

Low-cost data plans ‘superior alternative’ to WiFi-first MVNOs: Scott

News | March 22, 2018

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Low-cost data plans ‘superior alternative’ to WiFi-first MVNOs: Scott

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