The Liberal government is upholding a key ruling by the Canadian Radio-television and Telecommunications Commission that critics say doesn’t do enough to increase competition – or lower prices—in Canada’s wireless market.
In a Thursday afternoon decision, the government said it wouldn’t overturn the CRTC’s ruling on mobile virtual network operators from last April.
That decision requires Canada’s Big Three wireless providers — Bell, Rogers and Telus — as well as SaskTel, to sell wholesale access to regional wireless carriers for seven years.
It opened up the national wireless market to regional telecoms like Quebecor’s Videotron and Eastlink in Eastern Canada, enabling them to sell wireless service outside the operating territory where they have their own networks. But it excludes mobile virtual network operators (MVNOs), or competitors without any infrastructure of their own.
Critics charged that the decision wasn’t good enough and would not bring about effective competition in the wireless market. Small start-up Dotmobile appealed it to federal cabinet last year.
In the government’s response, Innovation Minister François-Philippe Champagne said overturning the CRTC decision would have been harmful to regional telecom providers.
“A primary consideration in this review was that expanding MVNO access to providers that do not possess spectrum and have not invested in facilities would undermine the work of smaller regional providers that have already invested substantially to increase competition,” he said in a statement. “Based on this review, the Governor in Council has declined to vary the CRTC’s decision.”
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The statement added that the government would “watch carefully” to ensure that the CRTC’s rules for MVNO access “lead to more choice and lower prices for Canadians.” It said wireless prices “are still too high.”
Dotmobile cofounder Algis Akstinas said of the decision, “Today’s decision by the Canadian government to support the CRTC and their baffling definition of Mobile Virtual Network Operator is a win for the BIG3 telecom lobbyists.
“For Canadians this means continuing inequity and discrimination in the form of punitively designed wireless service and significantly higher effective prices for seniors, newcomers, students and families. For an economy ranked dead last by the OECD for growth prospects, stifling innovation and access to connectivity (that we are all vested in) is a major disadvantage.”
When the CRTC’s decision came out last year, chairman Ian Scott told the National Post it would bring about “incremental” improvements to wireless competition. He said “people think there’s a magic bullet. There isn’t one.”
In Canada, there’s nothing forbidding MVNOs from setting up shop, buying wholesale access to telecoms’ wireless networks, and then re-selling the service. But no MVNO with any competitive impact has emerged because the companies haven’t been able to negotiate mutually agreeable terms with Canada’s large wireless providers.
Advocacy group OpenMedia said that the government has “recommitted to a broken system they know does not work.”
“Infrastructure-based telecom competition has failed to lower our world-leading wireless prices for many years,” campaigns director Matt Hatfield said in an emailed statement.
“Meanwhile, MVNO service is a globally proven model for reducing wireless prices – and yet today’s decision continues to lock Canadians out of that service in almost all circumstances.”