OTTAWA – It’s rare when the incumbent wireless carriers and the new entrants find themselves on the same side of an issue, but the response to a Canadian Network Operators Consortium (CNOC) appeal of the CRTC’s wholesale wireless decision last month is one of those occasions where the normally combative firms see eye to eye.
CNOC has appealed portions Telecom Regulatory Policy 2015-177, saying the Commission erred in fact and made errors of law in not granting mandated mobile virtual network operator (MVNO) access to the radio access networks (RANs) of the wireless carriers. The second part of CNOC’s appeal relates to tower and site sharing. One element of CNOC’s appeal is it says there wasn’t evidence on the record to backup the CRTC’s claim that investment in wireless networks would decline if MVNO access was mandated.
Telus notes in its September 3 comments to the CNOC appeal that the Commission rightly determined the biggest benefits to Canadian wireless consumers come from facilities-based carriers building out networks, investing in newer technologies and competing against each other. The radio access network (RAN) component is the most expensive part for a carrier and so imposing MVNO access would undermine that investment, it adds.
“The flaw in CNOC’s position about wholesale MVNO services is that they want regulated permanent access to all RAN facilities of WSPs, the riskiest and costliest components of network investment.” – Telus
“The flaw in CNOC’s position about wholesale MVNO services is that they want regulated permanent access to all RAN facilities of WSPs, the riskiest and costliest components of network investment. The Commission recognized that allowing one set of competitors to be able to avoid these investments by obtaining regulated MVNO wholesale services would seriously undermine the investments of all WSPs,” says Telus.
Claims from CNOC that the Commission arbitrarily opted not to do an analysis of mandated MVNO access under section 34 of the Telecommunications Act were also shot down by the large and small providers. Wind Mobile says that just as there was a section 34 analysis of wholesale roaming, there was of MVNO access and the CRTC came to two different conclusions – mandating wholesale roaming would enhance wireless competition and imposing MVNO access would be bad for investment.
“Wind agrees with the Commission’s determination in TRP 2015-177 that if it were to mandate GSM-based wholesale MVNO access, such access may well discourage continued investment by wireless carriers, because there could be a reliance on this access rather than investments in mobile wireless network infrastructure,” it writes in its intervention.
Quebecor Media Inc. (QMI) goes a step further, noting that CNOC is relying on a superficial argument while ignoring the comprehensive commission analysis on whether MVNO access would be good, or bad, for the industry. CNOC, says QMI, quotes from three paragraphs of 2015-177 (125 to 127) while ignoring the preceding 15 which layout the background and arguments for the decision and demonstrate a section 34 analysis was conducted.
“These substantive policy matters include the impact of proposed measures on the overall competitiveness of the wireless sector, innovation and investment incentives, the sustainability of competition and the interests of users. In particular, and contrary to CNOC’s persistent refrain throughout the Application, the Commission gave considerable attention to the views expressed by all interested parties on the matter of investment incentives,” says QMI in its September 3 submission.
CNOC does have its supporters, however. Openmedia.ca and Cogeco Cable submitted interventions arguing the independent ISP group hit the nail on the head with its appeal. Cogeco says the argument that mandated MVNO access will harm overall wireless network investment is a red herring. The company adds that it couldn’t find any reference to the negative investment impact on the record of the proceeding that led to TRP 2015-177.
“The reason why these parties could not come up with any evidence is because it does not exist.” – Cogeco Cable
“And the reason why these parties could not come up with any evidence is because it does not exist,” states Cogeco adding that the wireless carriers’ own evidence demonstrates that MVNOs play a complementary role to wireless operators and can drive market expansion. In fact, the company says that Rogers Communications and Telus’ own experts say that MVNOs actually help the wireless market.
“Mr. Richard Feasey (an expert witness for Rogers), noted that MVNOs’ stimulate innovation and cost efficiencies in retail activities,’ while Telus’ witness, Dr. Christian Dippon, observed that when MVNO access was mandated in Spain ‘MNO subscribers increased simultaneously with MVNOs’ growth of market share, suggesting that MVNOs do not serve as a substitute to MNO services, but rather as a complement, expanding the mobile market by providing a differentiated service,’” writes Cogeco.
It’s Canadian consumers who will suffer because of the CRTC’s decision not to mandate MVNO access, according to Openmedia. The organization says not mandating MVNO access “is akin to opening a locked gate, only to be faced with a brick wall barring the way forward.” So while, the commission has adopted measures to help MVNO entry into the market (the SIM card element is one), they “will be of no help to MVNOs who are consistently denied access to the national carriers’ networks and, by implication, to the thousands of Canadians who are unable to access affordable, independent mobile wireless service options.”
On towers and site sharing, Bell Canada says the CNOC appeal is way off the mark. Besides also being regulated under Industry Canada rules (conditions of licence, or COLs for spectrum), there is no evidence to suggest this matter needs to be addressed in the first place. The company points to tower and site figures from the new entrants to prove that the system is working well.
“For example, Eastlink only began offering service in targeted geographic areas in 2013 yet by the end of that year had gained access to over 230 wireless towers/sites through self-supply or tower sharing arrangements with others. At the end of 2013, Videotron and Wind, which have both been in operation longer than Eastlink, had secured approximately 1,800 and 1,600 towers and sites respectively,” writes Bell.
