Regulators have a real option to improve canada’s mobile wireless marketplace
by Marie Ginette Lepage
WHEN IT COMES TO THE future of our nation’s mobile wireless telecommunications market, Canadian regulators are fast-approaching an important crossroads. Recent debate, seen on Cartt.ca and elsewhere, has been focused on the idea Canada’s regulators face a terrible trade-off, in which the only way to provide consumers with more competition and choice is to do so at the expense of further investment and expansion of networks.
That would certainly be a difficult choice to make, particularly in a country like Canada, where many rural and remote communities still don’t have acceptable access to advanced telecommunication services like wireless. Fortunately for Canadians, it’s a false choice.
The reality is Canadian regulators have the ability to do both. They can create more competition and more choices for consumers by allowing more regional network builders to participate while simultaneously promoting investment if they embrace an innovative new path forward – something known as a hybrid mobile network operator model (HMNO).
This is precisely the balanced approach Cogeco proposed to the CRTC during its public hearing process earlier this year.
It is no secret Canadian consumers are dissatisfied with wireless pricing, service and network access. Testimony and evidence from numerous intervenors, including submissions from key market regulators like the Competition Bureau, confirmed this to the CRTC during the ongoing review of mobile wireless services. Canadian wireless consumers face pricing well above levels seen in other countries and increasingly see a digital divide growing between consumers that live in densely populated urban areas and those outside.
“These carriers have no commercial incentive to negotiate agreements that would address these challenges. We know, because we have been attempting such negotiations unsuccessfully for years.”
Exacerbating matters further is the reality of market power – and the potential for market co-ordination – by the three incumbent national carriers. These carriers have no commercial incentive to negotiate agreements that would address these challenges. We know, because we have been attempting such negotiations unsuccessfully for years.
This is a real issue for Canadians, and it is more than just a minor irritation with prices and bills. The Covid-19 pandemic has underscored the essential nature of the communications services families rely on to work, stay in touch, and continue in school – all while remaining at home or socially-distanced to slow the spread of the virus. Think how much harder the pandemic would have hit people from coast to coast to coast without access to these critical services.
The best antidote to these problems is more competition in every market, not just dense urban centres. Greater choice and more options are the best ways to ensure the lowest prices, and best value, for any product or service. Yet chronic barriers to entry limit the ability of regional businesses close to their communities to jump into Canada’s wireless industry, even when these potential new service providers, like Cogeco, have extensive telecommunications networks and invest billions on an ongoing basis.
It is clear regulatory solutions are needed to finally move past the unproductive, polarized debate that has characterized discussions around wireless policies to date. A balanced approach is needed for the future of Canada’s wireless networks that would result in more affordable prices for consumers and better networks for communities.
The dominant incumbent players claim that allowing new competitors cannot be done without reducing investment in new networks. However, regulators would be wise to consider these claims with more than a grain of salt. Yes, investment is necessary to build the networks people rely on, particularly amid Canada’s challenging geography and climate. Cogeco agrees with the assertion that widespread, wide-open mandated access to Canadian networks is not the smart solution.
This is why we proposed a smart solution to the CRTC which addresses those concerns head on. The HMNO model will allow new players to enter a wireless market currently dominated by the so-called Big Three, but also mandates ongoing investment in networks. It will bring new wireless options to more Canadian communities, narrowing the digital divide in our country while also ensuring our networks grow and innovate.
“Regulators do not have to choose between lower prices or better networks.”
Simply put, the HMNO model – which has received support from 300 communities in Ontario and Quebec – provides a regulatory framework to help Canada move forward. It is the balanced middle ground that will enable Canada to finally get past the current unproductive polarized debate. The Competition Bureau recommended a similar investment-based model to the CRTC as a balanced solution for Canadian wireless consumers who need better options.
Cogeco already has the wireline infrastructure required to build a mobile wireless network in the communities that need more choice and is in the midst of a $1 billion, four-year investment program to improve and extend its existing broadband networks in Canada. With the right regulatory framework in place, Cogeco – and others – will have the ability to make investments that further expand and improve Canada’s mobile wireless networks.
Regulators do not have to choose between lower prices or better networks; they must choose between the status quo or a balanced new model that brings the best of both. Don’t let narratives around a false choice obscure the real opportunity in front of Canada.
Marie Ginette Lepage (pictured) is vice-president, wireless solutions and innovation, Cogeco Communications.
