Expect industry pushback on new CRTC directive, MVNOs: experts

The Liberal government should expect some amount of industry opposition against the wording of the government’s new, consumer-focused CRTC policy direction and the regulator’s new pro-MVNO stance, according to some industry-watchers and insiders. The big three and a few others in the industry will likely try to suggest new wording to the policy direction, said one industry insider familiar with a telecom company’s regulatory stance on the matter who couldn’t be named. Although, the source added, Canadian telecom companies also understand they can’t completely reverse the new course the Liberal government is charting for the CRTC. In late February, the Liberal government announced its plans to urge, in a new policy direction, the CRTC to promote affordability and consumer interests rather than focusing on market forces in its decision-making -- as it’s required to do under the current direction, implemented by Stephen Harper's Conservative government in 2006. Just days after the new policy direction was released, the CRTC, in a surprise move, reversed its long-held position that mobile virtual network operators (MVNOs) aren’t entitled to wholesale access to wireless providers’ networks. It said MVNOs “should have mandated access” to the networks of the big three national wireless providers — BCE Inc., Rogers Communications Inc. and Telus Corp. — until they’re established in the market. “For the first time, we expect all existing players … will be united to lobby against mandated MVNO access,” Barclays analyst Phillip Huang wrote in a research note last week, following meetings with Bell. He said that includes the big three, as well as challengers Quebecor Inc. and Shaw Communications Inc. Huang said he believes “5G investments provide the industry with significant leverage, and any government that comes into power” would be unlikely to change policies or make ones that would discourage or show those investments. “As such, until the federal election is over and the CRTC hearing is under way, we would view the threat of mandated MNVO access as near-term noise,” he said. He predicted that “timing is on the industry’s side,” given the MVNO review will take place after this year’s federal election. Former CRTC Chairman Konrad von Finckenstein wrote about the likely reaction to the government’s new policy direction earlier this month, warning against a “sustained and coordinated push by established telecom carriers to water down and render the direction ineffective.” He wrote an editorial for the C.D. Howe institute earlier this month, in the form of a memo to Innovation Minister Navdeep Bains, in which he called the draft direction an “excellent first step,” but said its language should be strengthened to increase CRTC’s independence and resilience to persuasion efforts from established interests. “I remember only too well how the 2006 declaration of your predecessor Maxime Bernier was altered and weakened between draft and final version,” he wrote, noting that the new directive is just a draft and must go through a consultation process. “The lobbying and attempts at persuasion or influence (often described as co-opting) of the big carriers is constant and ongoing. Unfortunately, in the past it has generally been very successful. From my experience as chair of the CRTC, I know how persuasive and convincing this lobbying can be.” The proposed policy direction would require the regulator to consider how its policy decisions would “promote competition, affordability, consumer interests and innovation.” Bains said at the time the proposed direction signals the CRTC should put consumers at the forefront of all of its future decisions, though some experts say the precise final wording, and how the word “competition” is defined in particular, will affect how the regulator interprets the direction. Richard French, former CRTC vice-chairman and now a professor at the University of Ottawa, also said that, while the bigger companies will likely “reflexively” regard any move in the name of consumers as “potentially complicating their lives,” the potential effect the direction could have on decision-making isn’t clear. He noted there are numerous conflicting policy objectives between the directive and other regulatory documentation that the CRTC can point to in order to justify a given policy decision. “I can’t take the letter of these things very seriously simply because...with the multiple objectives, you can always tack back and forth. You can always find some clause that justifies what you want to do,” he said. “As long as you have all those different objectives in the law, in the regulations, in the direction -- as long as you have all of that soft law in there built upon the statute law and directive, it isn’t the words that matter. It’s the CRTC’s chosen responsiveness to the direction of the government of the day, but the direction itself is subject to … interpretation." — With reporting by Kyle Duggan and editing by Anja Karadeglija at akarad@thewirereport.ca and Ahmad Hathout at ahathout@thewirereport.ca

Expect industry pushback on new CRTC directive, MVNOs: experts

News | 03/26/2019 1:27 pm EDT

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