GATINEAU – In a letter sent to all telecom intervenors in the lower-cost data-only (skinny wireless) proceeding, CRTC staff sent an unpleasant midsummer surprise to the three incumbent national wireless players by asking:
“Whether a segment of the retail mobile wireless market, namely that of lower-cost data-only plans, is subject to sufficient competition to protect the interests of users and whether continued forbearance from price regulation of this segment would be likely to impair unduly the establishment or continuance of a competitive market for such services.”
In other words, the Commission is not satisfied with the Big Three’s April proposals for low cost wireless data plans. However, for it to start to regulate the rates (Ed note: We believe wireless rate regulation is now a real possibility) it needs to un-forebear that sector of the market. This letter starts such a process by asking a lot of detailed information to determine whether the Competition Bureau was right to determine the incumbents have market power in that sector.
Ted Woodhead, senior vice-president of government and regulatory vehemently disagrees with the direction of the letter. "The notion of re-regulating mobile wireless rates should be deeply concerning to all Canadians as it will negatively impact infrastructure investment, threaten the pace of 5G innovation, and may even possibly delay its ultimate deployment. It would also put us out of step with our global counterparts at a time when the evidence of a fiercely competitive and innovative mobile wireless market in Canada is overwhelming," he said.
"Competition has never been more robust than it is now. Prices are at all-time lows when considered on a cost per minute/per text/per MB basis, output is at all-time highs, and innovation, network quality and consumer satisfaction are at unprecedented levels," he continued. "As a result of this competitive environment, the vast majority of Canadians can choose from four carriers – and several value brands, niche and regional providers – to get high quality service that meets their individual needs and budgets."
Do the Incumbents still have a chance to avoid such an imposition of tariffs? Of course – by submitting plans that satisfy the Commission. As the letter reads, “In light of these comments (reaction to the first proposal), as well as the Commission’s original views as to the first lower-cost data only plan proposed, will your company propose an alternative lower-cost data-only plan (alternative plan) that would address the concerns raised by parties and meet the expectations of Canadians reflected on the record of the proceeding? If not, explain why not.”
That said, the incumbents will still have to file material not likely to be available at the push of a button.
In the spring, by asking the companies to propose skinny wireless plans the Commission wanted to avoid a lengthy procedural process but clearly the Regulator (and many others) is not satisfied with what it has seen so far but is also unclear on what exactly it wants. Consumer advocate Ben Klass, who is well known to Canadian wireless carriers, told Cartt.ca "it comes as little surprise the CRTC’s earlier request — that the incumbents self-regulate the problem away — was met with a disappointing response from the national carriers. What does this show? What every person in Canada paying a mobile bill is reminded of at the end of each month — market forces are and have long been insufficient to meet the requirements of users in the wireless sector. “
Of note however is that on July 19th, the day before the letter was sent, Freedom Mobile introduce a new offer for data at 25$ a month for 1 GB and 15$ a month for 250 MB, both offered in LTE.
All that said, the CRTC does seem to be leaning in the direction of $10-$15-$20-$25 plan increments, as indicated in this question to incumbents: “Indicate, with supporting rationale, what would be an appropriate amount of data for a lower-cost data only plan offered at a monthly rate of (i) $10; (ii) $15; (iii) $20; and (iv) $25.”
The Commission also wants to know why such low cost plans can’t be offered by the Big Three’s flagship brands and not just by its flanker brands such as Public, Koodo, Virgin and Fido.
(Ed note: This letter definitely shows what the Commission is thinking about and when viewed in tandem with the repeated demands from the federal government for "lower prices" on wireless from Canadian carriers as well as promises the Liberals have made to Canadians they’ll make that happen – it means there is serious political pressure on this issue. With an election approaching, it looks to us the Big Three need to offer more data for less or the Regulator or the government will do it for them.)
Bell Mobility has already filed a request for an extension to the deadlines in this letter, arguing, “it was assumed that the record of TNC 2018-98 was closed. As such, several key regulatory and business unit personnel with knowledge of the issues under consideration in this proceeding have scheduled vacations in July and August.” Both Rogers and PIAC supported this request.
On Tuesday, the CRTC send a letter to all parties saying it would grant an additional month to answer this letter, meaning the companies must now respond by September 10th 2018. Any requests for disclosure of information designated as confidential are to be filed by September 17th and responses to these requests are to be filed by September 20th – with replies to these responses by September 24. Any party to this proceeding can file comments on the responses to the requests for information by October 9th and then the deadline to file responses to those comments is October 23rd.
