Quebecor threatens legal action if MVNOs are mandated

GATINEAU, Que. — Quebecor Inc. CEO Pierre Karl Péladeau says he would take legal action against both the federal government and the CRTC if the regulator mandates wholesale MVNO access, arguing such a decision would violate the agreement Quebecor signed when it purchased spectrum in 2008. Speaking during the sixth day of the CRTC wireless public hearings, Péladeau said the CRTC would be making a “historic mistake with dire consequences” if it opted to mandate access by mobile virtual network operators (MVNOs) to incumbents’ networks. He told the hearing it seemed “indisputable” that pro-MVNO regulation would have the effect of violating the agreement signed by its subsidiary Videotron, arguing it would “undermine the very basis of the contract and render it null and void in practical terms.” “The commission and the federal government would therefore have to bear responsibility for the loss suffered by Videotron if such regulations were introduced, and Videotron would have no alternative but to seek redress to the courts,” Péladeau said, according to an English translation provided by Quebecor. “Has Videotron fulfilled its obligations under this contract? The answer is yes, beyond a shadow of a doubt. First of all, we paid the Canadian government $555 million for the spectrum we acquired, and since 2008 we have paid an additional $708 million in total for spectrum obtained in subsequent auctions,” he told the panel. “Secondly, we complied scrupulously with the auction rules and we have met all the conditions of licence set by the federal government in its policy framework.” Speaking to reporters after the hearing, Péladeau said there were no conditions in the agreement between Videotron and the government that “the spectrum we paid zillions of dollars for… would be taken over by the government without compensation.” “I don’t want to enter a legal argument but certainly, contractually those conditions were not there,” Péladeau said. “There were a lot of conditions that we met entirely so on our side of the equation we respected everything so therefore we expect that the other side respect their part of the relationship we established.” Speaking to reporters, Péladeau rejected an assertion that he was threatening the government. “Not at all, if the government decides — and we’ll find out is it the Commission or the government that will decide — and we’re far from being the only one that participated in those auctions and I’m sure that this is also something that everyone that participated in those auctions have on their radar screen,” Péladeau said. Quebecor told the hearing that all MVNO access models, including the temporary facilities-based MVNO model endorsed by the Competition Bureau and the hybrid mobile network operator model put forward by Cogeco Inc. would lower competition instead of increasing it. Quebecor’s regulatory affairs vice-president Dennis Béland attacked Cogeco‘s model, labelling it “an illusion.” In his presentation, Péladeau said mandating wholesale MVNO access would “jeopardize” the fourth player policy because regional carriers would suffer the greatest impact. He argued facilities-based competition was working, pointing to wireless price decreases in Quebec. Last November, the Competition Bureau noted the disrupting power of Videotron and Shaw Communications Inc.’s Freedom on wireless prices when endorsing the limited MVNO model, but said “many Canadians have not yet fully experienced those benefits.” Péladeau told the hearing the danger of wholesale MVNO access was “very real.” For Videotron, its customers and its employees, the consequences of this scenario would be truly dramatic as the financial viability of the company’s mobile wireless operations would be jeopardised,” Péladeau said. “In reality the impact of pro-MVNO regulation would be the exact opposite of what its proponents claim. Far from weakening the big three’s hold on the Canadian market, it would strengthen their dominant position by eliminating the only players that are really capable of competing with them in the long term.” Earlier in the day, Iristel Inc., which owns regional wireless provider Ice Wireless, again expressed its support for mandating a full MVNO model and criticised the response of incumbents. Iristel CEO Samer Bishay said he would be “the happiest man” if wholesale MVNO access was mandated and five MVNOs paid to access his network. “I’d be the happiest man because I don’t have to support, all I have to do is focus on building the network… and I’m going to make a lot more margin in the overhang,” he said. Iristel's efforts to launch a WiFi-based MVNO service were stymied by the government in 2018. In Tuesday’s morning session, the Coalition for Cheaper Wireless Service continued urging the commission to mandate a low-cost bring your own device wireless plan, providing 4 GBs of data monthly for a maximum of $30 a month. Under the plan, there would be no overage fees, or credit checks, unless a device was purchased as well. Public Interest Advocacy Centre CEO John Lawford saying there had been “no movement” on low-end pricing. The Manitoba Coalition also called for a mandated low-cost plan on Monday. — With reporting by Adam Langenberg at alangenberg@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Quebecor threatens legal action if MVNOs are mandated

News | February 25, 2020

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Quebecor threatens legal action if MVNOs are mandated

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