Competition Bureau Weighs in on Wireless Policy

Frank Lenk


Published: 11/26/2019 02:53:28 PM EST in Mobile

Competition Bureau Weighs in on Wireless Policy

The Competition Bureau has filed a submission with the CRTC's consultation on mobile services, recommending increased competition.

In October, the Canadian Radio-Television and Telecommunications Commission (CRTC) initiated a Review of Mobile Wireless Services (Consultation 2019-57-1). The intent is to revisit the entire wireless regulatory framework, and ensure that it both meets the needs of Canadians and complies with policy objectives set out in the Telecommunications Act.

Background

To date, the CRTC has ruled on various aspects of the wireless landscape, including details such as like device locking, early termination fees and data overage charges. But it has stopped short of imposing blanket controls on the largest wireless carriers. However, it will now re-examine the situation, in light of market evolution over the past few years, as well as technological changes such as the rollout of 5G.

The CRTC notes that competition has evolved in various regional markets, but observes that the national wireless carriers continue to hold about 90% of the subscriber market share. The CRTC is now "concerned" that "certain aspects of this market are not, in fact, sufficiently competitive in their current state to properly protect the interests of users."

The current Review will consider whether the CRTC should establish new retail policies or conditions of service, and whether it should "reassert any previously forborne powers" necessary to keep the market in balance.

Competition

The CRTC's Review process will culminate in a hearing recently re-scheduled for February 18, 2020. The process has included outside submissions.

A federal agency, under Innovation, Science and Economic Development Canada, the Competition Bureau would like to "spur additional price competition in the short term," and reduce the risk of declining network quality in the longer term.

In its submission, the Bureau is asking the CRTC to implement a Mobile Virtual Network Operator (MVNO) policy that would encourage the biggest carriers - Bell, Rogers and Telus - to sell temporary access to their wireless networks specifically to those regional carriers who would then be able to invest in expansion of their own networks.

"Wireless prices are significantly lower in areas of Canada where strong regional carriers compete with established national players," said Matthew Boswell, Commissioner of Competition. "We recommend that the CRTC introduce a policy that allows regional competitors to expand into new markets to ensure that all Canadians can benefit from lower prices, greater choice and more innovation in wireless services."

The Bureau makes a distinction between "service based" MVNOs, who rely on wholesale use of incumbents' networks, and "regional disruptors" which have developed "the required independence and infrastructure to act aggressively to fight for their share of the pie."

The Bureau observes that regional competitors who operate their own wireless networks - such as Sasktel, Videotron and Freedom Mobile - are "increasingly disrupting the wireless market." In areas where they've achieved market share above 5.5%, retail prices are 35 to 40% lower. The Bureau expects that benefit to consumers would be "much higher" if regional carriers could reach a 20% share.

The Bureau thus sees a policy of backing service-based MVNOs as being of limited value. Instead, it would like the CRTC to encourage those local carriers who operate as MVNOs chiefly "as a transitional step to becoming full-fledged facilities-based providers."

Conclusion

The current CRTC consultation promises to be a crucial one, and should be of great interest to any businesses that benefit from a healthy wireless marketplace in Canada. The CRTC's full Notice of Consultation is worth reading, as is the executive summary of the Competition Bureau's submission (which includes a link to the full submission, for those who want to dig deeper).

[Image: WikiMedia]





Article Tags:  CRTC, Competition Bureau, wireless, cellular, Telus, Rogers, Bell, Freedom, Freedom Mobile, Videotron, Sasktel

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Competition Bureau Weighs in on Wireless Policy








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