OTTAWA – In something of a surprising move, the Minister of Innovation, Science and Economic Development, Navdeep Bains announced Tuesday during Question Period he planned to issue a Policy direction to the CRTC requiring it to improve the affordability of Internet and cellphone services for Canadians.
If this is truly a shift away from market forces and facilities based competition (hard to tell for sure with the legalese), then this could be the most significant shift in the federal government's thinking on telecom in decades.
Even though the CRTC is independent, the government can, according to the Telecommunications Act “issue directions of general application on broad policy matters with respect to the Canadian telecommunications policy objectives.”
The proposed policy direction says “a) the Commission, when relying on regulation should consider how the measures used can promote competition, affordability, consumer interests and innovation, namely the extent to which they
- encourage all forms of competition,
- foster affordability and lower prices, particularly when there is potential for telecommunications service providers to exercise market power,
- ensure that affordable access to high quality telecommunications services is available,
- enhance and protect the rights of consumers in their relationships with telecommunications service providers,
- reduce barriers to entry and barriers to competition for new and smaller telecommunications service providers,
- enable innovation in telecommunications services, including new technologies and differentiated service offerings, and
- stimulate investment in research and development and in other intangible assets that support the offer and provision of telecommunications services; and
b) the Commission, when relying on regulation, should demonstrate its compliance with this Order and should specify how the measures used can, as applicable, promote competition, affordability, consumer interests and innovation."
(Ed note: This reads to us and others like the CRTC is being told to mandate business models like MVNOs and Wi-Fi first models, which will boost choice and lower prices.)
In a release, The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development said: “Our government is focused on improving the quality, coverage and, most importantly, the price of telecommunications services for Canadians—no matter where they live. We are giving clear direction to the CRTC that Canadian consumers must be at the forefront of all future decisions. We are ensuring that telecommunications policy will be made through a consumer-first lens to ensure Canadians have access to quality services at more affordable prices.”
The move “indicates a clear message to CRTC from government to reorient telecom towards consumers. We hope it leads to immediate changes such as MVNOs, internet wholesale rates that encourage competition from more carriers and consumer protection rules that truly protect consumers from dominant telcos,” said John Lawford, executive director and general counsel of the Public Interest Advocacy Centre (PIAC).
This Policy Direction, if approved as proposed, would replace the one adopted by Conservatives in 2006 when Maxime Bernier was Industry Minister and required the CRTC to rely on market forces to the maximum extent possible.
(Update: the official Gazetted notice says, in fact, that the 2006 order would exist concurrently with the new one, once it is finalized after the appropriate committees of the House of Commons and Senate study it. The federal government will now "have the order laid before both Houses of Parliament for a period of 40 sitting days during which it will stand referred to committees designated by each House," reads the notice.)
Such a government intervention in CRTC business is an exceptional measure but this government seems to do it quite often. As someone told us recently, they seem to have the CRTC on speed dial these days. For instance, there was a request to report on marketing practices of telephone companies. The report was published last week. Prior to that there was a CRTC decision that was returned to the Commission for reconsideration on CRTC’s mandated wholesale mobile wireless roaming services decision, in 2017 that resulted in the Skinny Wireless regime.
The CRTC’s spokesperson, Patricia Valladao, commented by email that “the CRTC takes note of the government’s proposed policy direction and will implement it once it comes into force.”
Independent ISP TekSavvy is pleased with the announcement. “The government understands that Canadians need consumer choice and competition. This direction will be a major win for telecom consumers, and it is heartening to see the Government of Canada reinforce the importance of competition and consumer interests” said Janet Lo, the company’s vice-president privacy and consumer legal affairs.
Indepedent operator Distributel is also gratified by the move. "Achieving a truly competitive telecommunications marketplace is the best way to ensure that Canadians have access to the benefits of consumer choice as well as innovative and differentiated services that not only meet, but respond to their needs," said company CEO Matt Stein in a press release.
Added Stein in his capacity as chair of the Canadian Network Operators Consortium (30 independent ISPs): "CNOC is strongly in support of the proposed policy direction. The announcement of a new policy direction sets out an important path to ensuring that all Canadians have access to innovative and affordable telecommunications services. We are grateful for Minister Bain's continued leadership to advance the interests of Canadians and competition in the telecommunication market."
“Talk is cheap – unless it’s on a Bell, Telus or Rogers phone – so we will be monitoring the situation closely, hoping the regulator follows through on the government’s objectives to put consumers ahead of Big Telco.” – Samer Bishay, Sugar Mobile
Said VMedia CEO Alexei Tchernobrivets in his company's release. "This is a breakthrough policy shift… It replaces a previous direction that was an impediment to allowing the CRTC to shape policy that put competition, consumers and affordability ahead of the interests of the established major telecom and cable companies that dominate the market.”
Regional operator Eastlink was more circumspect in its assessment of the proposed directive. "We are currently reviewing possible impacts of the proposed policy directive. As a facilities-based provider that services primarily smaller communities, we have a strong and vested interest in any changes to policies that could impact our ongoing ability to invest and expand our services," reads its statement.
The Canadian Communications Systems Alliance also weighed in, welcoming the move. “We have long argued that Canadians living in the smaller communities our members serve should enjoy the benefits of competition in wireless services, and that regulatory steps need to be taken to make this happen,” said CEO Jay Thomson in its press release. “We are pleased that ISED also recognizes this need.”
While pronouncing itself delighted by the federal government's move, upstart mobile provider Sugar Mobile (which has faced constant battles as a Wi-Fi first provider, as Cartt.ca has reported) said it hopes the CRTC will comply with the policy directive, when it is no longer a "proposed" one. “The oligopolists at Bell, Telus and Rogers have whined to the CRTC about our innovative made-in-Canada services for too long,” said Samer Bishay, president and CEO of Sugar Mobile, in their release. “Talk is cheap – unless it’s on a Bell, Telus or Rogers phone – so we will be monitoring the situation closely, hoping the regulator follows through on the government’s objectives to put consumers ahead of Big Telco.”
Speaking of "Big Telco", here's what they had to say in official statements sent to Cartt.ca.
Bell: "We’ll be highlighting the critical importance of government policy that encourages investment in high-quality broadband networks to ensure Canadians continue to enjoy affordable wireless and Internet access. Investment is an especially important focus for the consultations as the Canadian industry prepares for the move to 5G communications."
Rogers: "We are guided by these same considerations when we develop our innovative services for our customers, and continue to offer great value to meet our customers’ needs through our Rogers, Fido and chatr brands."
Telus: "We intend to participate fully in the CRTC consultation process, where we will reiterate our belief that Canada’s regulatory environment needs to both inspire brisk competition and encourage the billions of dollars in network investment required to sustain Canada’s place in the global digital economy and put Canadians first."
Both Shaw Communications (Freedom's owner) and Quebecor (Videotron) declined to provide comment when asked.
The process for this proposed policy direction is to open it for comments from interested parties for 30 days. The Minister is deemed to have consulted all provinces before issuing the order and table it in both Houses of Parliament that may refer it for consideration by the appropriate committee for a period of 40 sitting days. According to the current schedule, there are 50 sitting days left in the House schedule.
Probably unrelated, but we note the launch of CRTC’s Review of the regulatory framework for mobile wireless services will also be published this week. CRTC’s email on Friday evening did not include that item, which was added Monday morning.
The original story has been updated to include commentary from various companies and groups.
