Incumbents, small telecoms pan Competition Bureau MVNO proposal

Telecom providers both big and small have unanimously rejected a Competition Bureau proposal to allow strictly-regulated mobile virtual network operator (MVNO) access to the Big Three’s networks for five years, but for vastly different reasons. The bureau endorsed a limited MVNO model in November, after an in-depth study of the issue. That study was part of the CRTC’s wireless review, which will consider whether to mandate access by MVNOs -- companies that don’t have their own wireless infrastructure -- to telecom company networks. Comments on the study and the proposal were due Monday. In their replies, the Big Three wireless incumbents warned telecom infrastructure, including the upcoming 5G networks, would be eroded if the bureau’s proposal was introduced, and said that the data relied on by the bureau to form its conclusions was flawed. They argued competition in the sector was already sufficient and mobile prices have been falling without allowing access to MVNOs. In its submission, Telus Corp. said the report relied on by the bureau to assert that Canada’s wireless marketplace is uncompetitive is “incorrect and unreliable.” Telecoms were required to hand over detailed confidential information to the bureau for the study. Telus claims the report, published by Matrix Economics, incorrectly infers prices from metrics, bases conclusions on obsolete data and incorrectly defines the product and geographic markets. “The bureau’s mandated MVNO proposal, even one that is temporary in nature, is unnecessary and not justified on the facts,” Telus’ reply states. “Moreover, while the bureau attempts to position its wholesale remedy as one that furthers facilities-based competition, it is one that remains potentially harmful to network investment.” The wireless incumbents have also previously taken issue with studies that criticised Canada’s wireless market. But the Competition Bureau proposal was also widely panned by smaller telecoms, including Cogeco Inc., TekSavvy Solutions Inc. and Iristel Inc. They argued the proposal is overly restrictive for a range of reasons, including the five-year access limit and requirements that providers have spectrum licences and only be permitted to have access if they are eventually seeking to build their own network infrastructure. Andy Kaplan-Myrth, Teksavvy’s vice president of regulatory and carrier affairs, said in his submission that the bureau’s proposal would only benefit existing facilities-based provider Shaw Communications Inc., which owns Freedom Mobile. Kaplan-Myrth agreed with the bureau’s finding that Canada’s wireless market was highly concentrated and had resulted in consumers having less choice and paying higher prices than they would otherwise, but said the proposal still prevented new, smaller providers from entering. “The proposed policy itself in practice favours a single player (Shaw), is unfair to other players, and does not offer an industry-wide solution,” he said. Shaw was less scathing of the proposal than other telecom providers, but said MVNO access should only be granted in underserved areas to companies with spectrum holdings there who are able to “demonstrate an increasing trajectory of investments, beyond spectrum acquisitions alone, in mobile wireless infrastructure and their own core networks.” There is also a separate process at the CRTC involving the Competition Bureau report. Complaints about the Matrix Economics report led a number of telecom providers to request the confidential data used in it be released to company representatives by the CRTC. In a letter released on Jan. 10, the CRTC announced it would publicly release data around the report’s methodology and statistical models, in line with requests by BCE Inc. and Rogers Communications Inc., as well as releasing Bell-specific data to Bell directly. The CRTC also said it would continue to provide company-specific data to just the company it applied to. Releasing that information would mean stakeholders were in a better position to evaluate the bureau’s analysis, the CRTC said in its ruling. Two further requests for data by the Canadian Network Operators Consortium (CNOC) and Telus were more complicated and are still being assessed, the CRTC said. In its request, Telus also asked for the CRTC’s mobile wireless review hearing, scheduled for Feb. 18, to be delayed. In the report outlining its suggested policy temporarily mandating MVNOs, the bureau said it was focused on “incentivizing and accelerating facilities-based competition from disruptors.” It acknowledged the five-year timeframe meant only existing wireless providers would be able to take advantage of the MVNO access, saying the policy struck the right balance between lowering prices and ensuring continued investment in wireless network infrastructure. — Reporting by Adam Langenberg at alangenberg@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Incumbents, small telecoms pan Competition Bureau MVNO proposal

News | January 14, 2020

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