TORONTO and OTTAWA-GATINEAU — Canadian Network Operators Consortium Inc. (CNOC) is asking the CRTC to mandate both Full Mobile Virtual Network Operator (MVNO) national wholesale access services and wholesale tower and site sharing services.
CNOC made the request in an application it submitted Monday to the CRTC to “review and vary” the Commission’s Regulatory framework for wholesale mobile wireless services, (Telecom Regulatory Policy CRTC 2015-177). In its policy decision, issued in May, the Commission chose to regulate wholesale roaming services but continued to forbear from the regulation of MVNO and tower and site sharing services.
In its “review and vary” application (a copy of which was emailed to Cartt.ca), CNOC claims the Commission committed “an error in law” in Telecom Regulatory Policy CRTC 2015-177, saying: “There is substantial doubt as to the correctness of the Commission’s decision to continue to forbear from the regulation of both Full MVNO and tower and site sharing services. CNOC therefore requests: (1) an order mandating Full MVNO services on the networks of Bell Mobility, RCP (Rogers Communications Partnership) and TCC (Telus Communications Company), with rates that are based on Phase II costs plus a reasonable mark-up; and (2) The commencement of a new follow-up proceeding in which the Commission would conduct a market analysis, apply the essentiality test and make final determinations, on the merits, as to whether wholesale tower and site sharing services should be mandated, and if so, on what terms and conditions.”
CNOC pointed out that in the CRTC 2015-177 policy decision the Commission determined MVNO services were essential services over which the incumbent national wireless carriers possessed market power. However, the CRTC determined it was not appropriate to mandate wholesale MVNO access at that time. CNOC argues that the CRTC did not apply an analysis based on section 34 of the Telecom Act to conclude if forbearance from regulating MVNO services was still warranted.
“Contrary to the Commission’s conclusions for wholesale roaming, the Commission incorrectly skipped a section 34 analysis of MVNO services and abruptly concluded that continued forbearance from the regulation of that whole category of services is appropriate,” CNOC wrote in its application.
“Engaging section 34 of the Act reveals that forbearance of MVNO services, or at a minimum Full MVNO services, is no longer appropriate. Further, regulation of these services must go as far as mandated access in order to achieve the policy objectives and protect the interests of users,” CNOC added.
Partly at issue for CNOC is the CRTC’s “mischaracterizing the nature of Full MVNOs” in Telecom Regulatory Policy CRTC 2015-177, CNOC said.
“By lumping in Full MVNOs with other types of MVNOs, the Commission failed to properly classify Full MVNOs as facilities-based carriers that must invest in and build their own network infrastructure. This error of fact materially influenced the Commission’s decisions not to mandate Full MVNO services. Had the Commission not committed this error, the logical outcome would have been for the Commission to mandate Full MVNO services at a minimum,” CNOC wrote.
Regarding the issue of tower and site sharing, in Telecom Regulatory Policy CRTC 2015-177, the CRTC determined it would need to examine each tower or site on an individual basis and assess whether or not the tower or site owner had market power based on the network coverage required by the wireless carrier requesting access to the tower or site. According to the CRTC, it would be “inefficient and unduly burdensome” for wireless carriers to provide the necessary network coverage information for the CRTC to examine. As such, the Commission determined it could not assess whether a wireless carrier had market power for tower and site sharing, and therefore could not assess whether tower and site sharing are essential services. In the end, the CRTC decided not to mandate or require general wholesale tariffs for tower and site sharing at that time.
In response, CNOC wrote in its review and vary application: “Although the Commission acknowledged that there will be situations where national wireless carriers possess market power over tower and site sharing services, it determined that it would be too inefficient and burdensome to complete the analysis of the prevailing market conditions for these services. This outcome constitutes a failure by the Commission to discharge its statutory duty that sets a dangerous precedent for future regulatory reviews.”
Furthermore, CNOC wrote: “In the context of a regulatory review where a wireless carrier would likely have market power with respect to the provision of tower and site sharing, the Commission must: (1) conduct a fulsome analysis of the prevailing market conditions; (2) apply the essentiality test; and (3) engage sections 34 and 47(a) of the Act for the purpose of making final determinations as to whether mandated services are necessary. Failure to do so constitutes an error of law.”
If the Commission determined it was unable to complete its market assessment of tower and site sharing services during the proceeding leading to Telecom Regulatory Policy CRTC 2015-177, a follow-up proceeding would have been the appropriate alternative, CNOC wrote in its application to the CRTC.
CNOC added that existing Commission powers and regulatory processes, and dispute resolution mechanisms such as Industry Canada’s mandatory arbitration mechanism, have been wholly unsuccessful at addressing issues related to tower and site sharing services.
“Overall, permissive forms of regulation are simply unable to address the barriers to competition that tower and site sharing issues create. In contrast, mandatory regulation is an immediate and effective safeguard that enables competition,” CNOC wrote.
In addition, CNOC said it was important to note that the CRTC recently revised the test for mandating wholesale services in Telecom Regulatory Policy CRTC 2015-326 (the CRTC’s Review of wholesale wireline services and associated policies, issued July 22). In its CRTC 2015-326 decision, the Commission said it would apply three policy considerations to “inform, support, or reverse a decision to mandate the provision of a wholesale service”. Those three policy considerations were defined by the Commission as follows:
- Public good — there is a need to mandate the service for reasons of social or consumer welfare, public safety, or public convenience.
- Interconnection — the service would promote the efficient deployment of networks and facilitate network interconnection arrangements.
- Innovation and investment — mandating or not mandating the facility or wholesale service could affect the level of innovation/investment in advanced or emerging networks or services for incumbents, competitors, or both, or impact the associated level of adoption of advanced or emerging services by users of telecommunications services.
In CNOC’s view, all three policy considerations can be applied to support the mandating of Full MVNO services on the networks of national wireless carriers. In addition, the “public good” policy consideration could be applied to support mandated tower and site sharing services, CNOC said.
In conclusion, CNOC wrote: “This relief is necessary to lower barriers to entry into retail mobile wireless markets with a view to substantially increasing competition in those markets. In turn, these effects will directly translate into tangible benefits for Canadian consumers in the form of greater levels of choice when it comes to wireless providers, services, quality and price.
“Canada desperately needs this outcome to pull away from a status quo of wholesale and retail markets that are contorted by the dominance of the national carriers. The Commission’s decision relating to wholesale roaming is a positive step forward. However, mandated wholesale roaming alone will not solve the deep rooted problems that exist in Canadian mobile wireless markets — mandated Full MVNO and tower and site sharing services are also necessary to achieve change. Further, these regulatory measures are required by the Act, the policy objectives and the Policy Direction,” CNOC concluded.
