Incumbents don’t want IoT, machine-to-machine market segments included in MVNO regime

The commission should not regulate the Internet of Things (IoT) and machine-to-machine (M2M) markets in the same manner as retail mobile wireless services, Canada’s incumbent telecommunications companies said in response to a CRTC consultation on whether to include those retail market segments in its mobile virtual network operator (MVNO) access framework. “Expanded regulatory intervention is not efficient or proportionate or likely to advance competition, affordability or investment. On the contrary, mandated wholesale MVNO access would risk undermining investment and harmfully distorting competition in these markets.” Rogers Communications Inc. wrote in its May 15 intervention posted to the commission’s website this week. In its March consultation the CRTC “took the preliminary view that it was highly likely that the market conditions in the enterprise and IoT/M2M retail market segments closely resemble the rest of the market and may in fact be even more concentrated. The commission had expressed concern that should the IoT/M2M market segments be excluded from the MVNO framework, retail customers might be subject to an undue or unreasonable advantage on the part of incumbent providers. Rogers argued that pricing in the IoT/M2M segments are already competitive, they compete with other connectivity technologies like wireline and short-range radio, and it already competes with global wireless carriers, global and regional aggregators or MVNOs, global and regional IoT/M2M solutions providers, and Canadian wireless carriers. “Rogers does not have market power – alone or with Bell and Telus – in these markets,” it wrote. Telus Corp. commissioned a report by Christian Dippon of NERA Economic Consulting which found that “enterprise and IoT services are in separate product markets from each other and from retail mobile wireless services, and the markets for enterprise and IoT services are competitive.” Telus further argued to the CRTC that in its 2021 MVNO decision the commission itself determined that IoT services are not in the same market as retail mobile wireless services and asserted that the retail mobile wireless services is defined to explicitly exclude enterprise and IoT services. “The commission has treated these markets separately, as retail mobile wireless service have a long regulatory history, whereas enterprise and IoT services do not,” Telus wrote. BCE Inc. also pointed to the commission’s 2021 determinations and said that it cannot now credibly assert that enterprise services along with IoT/M2M services are part of the same market. “Each involve different services, sold by a different (though sometimes partially overlapping) set of suppliers, to different groups of customers, for different uses, in markets with different competitive and innovation dynamics, at different prices, and using different pricing constructs,” Bell argued. During the proceeding leading to the 2022 decision on the terms for the MVNO framework, regional carriers that stand to benefit from the framework argued that the inclusion of the growing IoT/M2M market segments into the framework was necessary for effective competition. In the current consultation, Cogeco Inc. said it did not matter whether or not the CRTC found that the enterprise and IoT/M2M retail market segments constitute distinct product markets. “Such a conclusion should not prevent these retail market segments from being included within the scope of the Commission’s MVNO access framework,” it wrote. The Competitive Network Operators of Canada (CNOC) said the incumbents’ denial of access to a wholesale-facilities based MVNO access service that serves the IoT/M2M segments will result in undue preference and unjust discrimination. CNOC noted that there is a lack of publicly accessible data on key market indicators within the IoT/M2M segments but argued that the “same fundamental principles that led to a finding of market power” in the 2021 MVNO decision apply in this case. CNOC argued that the incumbent national wireless carriers have the vast majority of quality spectrum which is “scarce and prohibitively expensive which gives rise to a very high barrier to entry and expansion for smaller carriers.” “Services provided to enterprise customers and IoT/M2M applications rely on mobile wireless spectrum, which provides the incumbents with the opportunity to exercise unfettered market power in the market segments,” CNOC said. The Public Interest Advocacy Centre (PIAC) warned the CRTC that it is bound to repeat past mistakes. PIAC said the commission’s decision to restrict competitors’ access to fibre-to-the-premise (FTTP) facilities in 2015 enabled incumbents “to establish a significant foothold in a then-nascent retail FTTP market that is now the incumbents’ primary focus and goal.” “Almost eight years later, the commission now faces the contentious task of rectifying the competitive harms of an unworkable FTTP wholesale access framework. If the IoT/M2M market segments are excluded under the MVNO access framework, the commission is likely to repeat the mistake. The commission can best support efficient competition by ensuring full access for competitors now, rather than go through the inevitable pains of bringing them back into the fold later,” PIAC wrote. Saskatchewan Telecommunications Holding Corporation said “there is no pressing need” to change the regime at this time arguing the mandated wholesale MVNO regime is not yet operative. “Tariffs have just been finalized, and no test of the rate negotiation regime has occurred. Before making further changes, the commission should test the effectiveness of the regime it is introducing,” SaskTel wrote. SaskTel further argued that the IoT market is still in development and will have no impact on the success or failure of an MVNO “especially given the uniqueness of that market, and other participants involved in the sale of IoT systems or devices.” Finally, it argued that enterprise markets are very competitive. “Customers in that segment do not need regulatory intervention to drive low prices, service quality, and service availability. Enterprise is also not the typical target market for resale competition,” SaskTel wrote. – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Paul Park at ppark@thewirereport.ca.

Incumbents don’t want IoT, machine-to-machine market segments included in MVNO regime

News | May 19, 2023

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Incumbents don’t want IoT, machine-to-machine market segments included in MVNO regime

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