Critics blast Canadian MVNO mandate as lacking

Canada flag canadian flag
The operators’ stance on the final CRTC decision was less clear. (Pixabay)

Canada’s telecom regulator approved new rules aimed at boosting MVNO access to the country’s dominant networks, sparking criticism from independent operators and broadband advocates who argued the changes didn’t go far enough.

Under the new rules, major players Bell Mobility, Rogers Communications, Telus and SaskTel are required to lease network access to existing regional operators in areas where those smaller providers already own spectrum licenses. The mandate is set to last for seven years, with the cutoff designed to be an incentive for the regional players to continue expanding their networks.

The Canadian Radio-television and Telecommunications Commission (CRTC) said while it will set the terms and conditions for MVNO access, providers will be able to negotiate their own wholesale rates.

CRTC also approved measures pressing the four major operators to offer low-cost plans, which must include unlimited calls and text in Canada and at least 3 GB of data for no more than $35 per month, by July 14, 2021. They must also offer so-called “occasional use” plans, which run no more than $15 per month by the same deadline.

Ian Scott, CRTC chairperson and CEO, said in a statement the “competitive model” it adopted would “result in greater choice and cheaper mobile wireless services for Canadians, who rely on their smartphones now more than ever.”

Background and backlash

The regulator initiated a review of competition in Canada’s wireless market in 2019, and last year held a series of hearings as it weighed a move to mandate MVNO access to dominant networks in the country.

RELATED: Canada’s Rogers snaps up rival Shaw in $16B deal

In testimony, the CEOs of Bell Canada, Telus and Rogers Communications argued competition was already fierce and warned a move to require operators to provide network access to any MVNO hopeful would harm network investment.

Bell Canada chief Mirko Bibic painted a dire picture at the time, stating “significant wireless investments will be delayed or will be abandoned” and “if Canada becomes a 5G laggard, then instead of closing the digital divide, new divides will emerge, not just between our largest cities and our suburban and rural communities, but also between Canada and the world's wireless leaders.”

Morgan Stanley analysts said in a research note this week CRTC appeared to have taken a "middle ground" approach in its final ruling, noting it effectively limited "those able to leverage the new rules to the likes of Freedom Mobile (Shaw), Eastlink, Quebecor and others that are already in the wireless business, or those that may acquire spectrum going forward."

Independent operators and broadband advocates slammed the regulator's decision to limit the scope of its MVNO mandate.

Internet advocacy group OpenMedia argued in a press release the move “doubles down on the failed model of facilities-based competition.” Laura Tribe, the group’s executive director, added it “does the absolute bare minimum. It’s nowhere near good enough.”

The Competitive Network Operators of Canada (CNOC), an industry group representing more than 30 wireless and wireline providers, similarly took issue with the rule.

CNOC Chair and CEO of Canadian ISP Distributel Matt Stein concluded the move was “simply bad for Canadians,” arguing in a statement that “without the flexibility afforded through a full MVNO model, independent carriers are not set up to innovate on services and pricing.”

The major operators’ stance on the compromise was less clear.

Telus Communications Manager Richard Gilhooley told Fierce it was “continuing to review” the move. A statement provided by Rogers did not directly address the CRTC decision, but noted "investment in digital infrastructure is critical." It added Rogers remained focused on building out its 5G network and providing "affordable options" to consumers.

Bell did not respond to a request for comment.