By Ahmad Hathout
TORONTO – CRTC chairman Ian Scott (above) said Monday the contested acquisition of 5G spectrum licenses by Quebecor’s Videotron in Western Canada is an example of what the regulator envisioned when it made the decision to allow regional competitors to force negotiations for wireless network space from the larger providers.
The regulator’s April decision allows regional carriers to negotiate access to the wireless facilities of the incumbents – Rogers, Bell, Telus and Sasktel – as long as they have spectrum and network facilities in the area they want to provide mobile virtual network operator (MVNO) service. A couple of months later, in July, Innovation Canada awarded Videotron 3.5 GHz licenses in Western Canada, which Telus and Bell appealed to the Federal Court because they thought the Montreal-based company did not qualify.
Following his keynote address to close out the first day of the Canadian Telecom Summit on Monday, Scott said the decision to award Videotron the licenses in British Columbia, Alberta and Manitoba is in line with the regulator’s vision for sustained competition in Canada as the preferred MVNO model.
“We set up an MVNO model that emphasized it’s going to be most effective that people have access to spectrum, the key facility involved in providing mobile service and can accelerate their deployment and their service area, and that’s the MVNO model that we believe will most effectively bring about sustainable competition,” Scott said in an interview with Cartt.ca.
“The outcome, the activity in the auction gives us some comfort that that’s exactly what some of those prospective competitors are doing: they are obtaining spectrum interests and presumably that’s going to lead to them expanding their commercial presence in more markets, which is what we want.”
Videotron has a subsidiary with operations in Western Canada called Fibrenoire – a company it purchased in 2016 that sells fibre wholesale to businesses. It has used Fibrenoire as the anchor company it leveraged to pitch its qualification for the licenses.
Bell and Telus, which is staring down a possible mega competitor in its territory with the Rogers-Shaw merger and now a possible Videotron move, said they want to see the documents that led ISED to approve the licenses. (This month, Quebecor filed a motion to stop the release of unredacted documents in the public record, while Bell and Telus requested their release.)
Scott said the Commission is currently reviewing the process for the terms and conditions for the MVNO framework and will provide “clarity” next year.
During his keynote address Monday afternoon, Scott defended the Commission’s MVNO decision, even as many in the industry expected the Commission to open the market for any type of MVNO, which is traditionally defined as a wireless service provider that does not own its own networks. Scott said the regulator did not want providers coming in and setting up shop temporarily and then leaving, suggesting that giving access to those with facilities would prove more sustainable.
“I’ll be frank: we got that initial decision wrong” – Ian Scott, CRTC chairman
But Scott also defended another significant decision by the CRTC – its May decision to reverse a 2019 decision to set the bulk Internet purchase rates smaller Internet service providers pay larger ones for capacity at lower price thresholds than an interim decision set in 2016. This made the higher 2016 rates permanent, which has since drawn calls for Scott’s removal from the CRTC. (Some accused Scott of showing bias toward facilities-based competition.)
“Although aspects of both of our mobile wireless and high-speed access service decisions are being appealed to Cabinet and the courts, the Commission is convinced of the validity of our approach,” said Scott in his keynote, adding the decisions are helping “lay the foundation” for new entrants and growth in the market.
The wholesale Internet rates decision will be heard by the Federal Court of Appeal, after TekSavvy successfully filed and won an application for review in September.
When the Commission reversed course and made the interim decision permanent this past May it said it made critical errors when making the decision. Scott reiterated that point Monday.
“I’ll be frank: we got that initial decision wrong,” Scott said Monday of the 2019 decision. “There were unquestionably errors in the initial decision. We are not infallible, and we could not ignore those errors once they were properly identified.
“The work we at the CRTC do is not always popular or easily understood, especially when it comes to the costing of wholesale services,” Scott added. “We recognize that. But I will say that in the process of reaching a decision — be it on rates for high-speed access services or any other matter you care to name — the process we follow is always based on sound administrative-law principles.”
The chairman also touched on other priorities of the regulator during his keynote, including gearing up for the implementation by Nov. 30 of the STIR/SHAKEN framework, which requires voice service providers tackle illegal robocalls and protect Canadians from spam and scam calls by using analytics to identify legitimate and illegitimate calls.
Scott also noted the Commission is now reviewing submissions from its proceeding on botnets; is working with industry to implement new smartphone technology for next-generation 9-1-1 service, which is expected to allow emergency service workers to pinpoint more accurately the location of callers; and will share details into an anti-spam investigation involving the personal and financial information of Canadians.
Image borrowed from the Canadian Telecom Summit’s website.
