Competition Bureau endorses limited MVNO model

The Competition Bureau is officially endorsing a policy that would temporarily mandate access to the incumbents’ network infrastructure by mobile virtual network operators (MVNOs), the watchdog said Monday. The recommendation comes at the tail-end of the deadline last week to submit further comments to the CRTC’s mobile wireless review. The bureau submitted initial comments in May, where it stopped short of endorsing MVNOs. Hearings for the review are scheduled to begin early next year, and will come about a year after the CRTC unveiled a preliminary view in favour of MVNOs. The policy mandating MVNOs -- wireless companies that rent infrastructure from larger players -- would be temporary and “focused on incentivizing and accelerating facilities-based competition from disruptors,” the bureau said Monday. “The Bureau recommends that the CRTC pursue a Mobile Virtual Network Operator (MVNO) policy where Bell, Rogers and Telus would have to sell temporary access to their wireless networks to regional carriers who intend to invest and further expand their own networks,” the bureau said in a release on Monday. “This would spur additional price competition in the short term, while avoiding the risk of declining network quality in the long term.” According to the bureau’s recommendation, the market would then be deregulated after five years of mandated MVNO access, to coincide with the CRTC’s next wireless review. That timeframe will likely mean that only those who already have operating wireless networks will be able to take advantage of the policy, the bureau said. “Practically speaking, only wireless providers who have a sufficient quantity and mix of spectrum in an area, but have not yet built out, are likely to have the operational capability to build out in 5 years,” the bureau said. The recommendation is somewhat similar to one proposed by Cogeco Inc., which said mandatory access to radio access facilities would be conditional on the renting company, which would already have telecommunications facilities, continuing to invest in its facilities. “The CRTC should allow wireless disruptors to act as MVNOs as a transitional step to becoming full-fledged facilities-based providers as they continue their expansion,” the bureau said Monday. In its May submission, the bureau said the regulator must toe a fine line between encouraging competition while also avoiding a situation where the incumbents would stop investments in their networks. The incumbents hung on to the latter assessment by the bureau in subsequent submissions when they challenged reports that were unfavourable to them and sought to rebuke the CRTC’s decision to cut wholesale internet rates resellers pay incumbents for access to their network. Indeed, in its latest submission to the CRTC, the Canadian Wireless Telecommunications Association (CWTA) pointed to several developments that have occured in the industry that showed facilities-based competition is the best way forward. Those developments include a decline of 28 per cent in wireless prices between 2016 and 2018, as recorded by the regulator in a summer report; the release of unlimited data plans by the incumbents; the increasing market share captured by regional providers; and the increasing adoption of mobile wireless services. The bureau said MVNOs could be a way to move that forward, but it wasn’t sure if it was the best path. It encouraged the CRTC to study that kind of policy using a cost-benefit analysis. It said in that previous submission that it is “possible that facilities-based entrants, such as Freedom Mobile, could soon develop into entities that disrupt the wireless status quo in other areas of Canada, to the benefit of Canadians.” However, the bureau said Monday that despite the disrupting power of regional players like Freedom and Quebecor Inc.’s Videotron -- where wireless disruptors could reduce prices by 35 to 40 per cent -- “many Canadians have not yet fully experienced those benefits.” It said wireless disruptors still offer the “most promising path forward.” Shaw Communications Inc., which owns the emerging fourth player Freedom Mobile, echoed the views of the CWTA in that the industry has developed to a point where competition can organically flourish. However, it said that if the CRTC decides to go the route of mandating MVNOs, it should be “limited in scope and duration and must preserve facilities-based new competitors’ abilities and incentives to invest” -- similar to what the bureau is proposing. And the bigger players provided that same line of reasoning. BCE Inc., in fact, borrowed a quote from Freedom’s president Paul McAleese that suggested the most recent quarter was one of the most competitive yet. Bell had noted in its last conference call with analysts that it would focus its efforts on showing that industry prices have been on a downward trend, despite recent reports that suggest Canada has some of the highest-priced data in the world. Sure enough, Bell noted that the wireless market has become “significantly” more competitive than it was in 2015 (Shaw purchased Wind, which rebranded to Freedom, in early 2016) through price reductions, bigger market share for regional and new entrants, higher wireless penetration and increased data usage. The large carriers also emphasized the importance of the upcoming 5G network and its dependence on investment to plead with the regulator not to implement a wholesale MVNO model. In August, the bureau also said in a report following its examination of the broadband market that that segment benefits from mandated wholesale access rules. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Competition Bureau endorses limited MVNO model

News | November 25, 2019

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Competition Bureau endorses limited MVNO model

News | November 25, 2019

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Freedom Mobile no longer pursuing full MVNO status

Federal arbitrator releases paid time political broadcast schedule

TV broadcasters denounce streamers’ appeals of CRTC’s broadcasting contribution decision

CRTC considering expanded mandate for Broadcasting Participation Fund

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us