Cogeco said terms are “positive step”
By Ahmad Hathout
OTTAWA – The CRTC has defined the boundaries for regional mobile virtual network operators to lease wireless space from the networks of the large incumbent operators, stipulating carriers wanting to operate such an MVNO must actively be offering services to retail customers, not just have spectrum and facilities.
The regulator earlier today released its long-awaited terms and conditions for an MVNO regime, which emerged out of its April 2021 decision to allow established regional virtual operators with spectrum and existing facilities to lease network space from Rogers, Bell, Telus, and SaskTel.
The terms and conditions specify regional operators wanting mandated access to the large networks must not only have spectrum and facilities, but they must already have a home public mobile network (PMN) in Canada – including a radio access network and a core network – that is actively offering services to retail customers. The regulator reasoned that allowing companies with only spectrum to operate an MVNO would rub against its framework of sustainable competition.
The terms also deny the use of the incumbent networks to provide home and business Internet services over fixed-wireless, wireline, or Wi-Fi facilities in part because of a required increase in traffic it did not factor into the original decision.
The Commission, however, sided with prospective MVNO operators in some areas including by declining to set a minimum amount of spectrum they would need to qualify and by allowing them to qualify with spectrum leased from other carriers. To be eligible, the company must be operating the MVNO in the area designated for those licenses.
The CRTC is also putting in place mandatory seamless hand-off functionality for the MVNO regime to prevent dropped calls and data sessions “when end-users move between the MVNO access coverage zone and a regional wireless carrier’s home network.”
Further, the regulator also rejected certain terms in Telus’s proposed tariff that would have given the incumbent control over who could be sold network space already sold to the regional carrier.
“The proposed resale-of-resale restrictions unfairly limit resale competition, which would not be consistent with the 2019 Policy Direction’s call to encourage all forms of competition in subparagraph 1(a)(i),” the CRTC’s terms read, reasoning that allowing such control to the incumbent would create “potential anti-competitive results and unjust discrimination and undue preference” for its ability to possibly approve or deny certain resellers over others.
The terms also extend to current and future generations of wireless technology, including 5G and beyond.
The Commission is now asking the incumbents to submit new tariffs incorporating the terms and conditions within 30 days. It also said it will initiate a proceeding to consider the “inclusion of the enterprise” and Internet of things and machine-to-machine retail segments in the MVNO framework.
Cogeco, which does not have a wireless business but has said its entry would be contingent on these terms, said the decision is a “positive step” in the implementation of the framework.
“We commend the CRTC for refusing to approve unreasonable terms and conditions proposed by incumbents, which, taken together, would have rendered the MVNO regime ineffective,” a Cogeco spokesperson told Cartt.ca.
“The CRTC has determined that eligibility for the MVNO access service is contingent on being a commercial mobile wireless operator somewhere in Canada. This new requirement will need to be factored into our planning, as Cogeco has not yet launched a mobile wireless operation. With respect to the other eligibility requirement established by the CRTC – that regional carriers own spectrum licences at a Tier 4 level or higher in the regions where they plan to operate as MVNOs – Cogeco owns such Tier 4 spectrum licences, which collectively cover 91% of its operating footprint.”
When reached by Cartt.ca, representatives from Bell, Telus and Eastlink all said they are still reviewing the decision.
Rogers said in a statement they “are reviewing the decision and remain focused on continuing to deliver affordable options for Canadians and building out Canada’s largest 5G network.”
But Geoff White, executive director and general counsel of independent telecom representative Competitive Network Operators of Canada, told Cartt.ca that, “At a high level, it is still a very restrictive regime that really only applies to regional carriers with pre-existing wireless networks,” referring to the prospective MVNO operator having to “actively” offer retail wireless services.
“To make things worse, the rates for access are to be negotiated between the parties,” he added. “That process is long and drawn out and there’s no incentive on the part of the big 3 to negotiate reasonable rates.”
The Commission stipulated in the terms that negotiated MVNO access rates be open to renegotiation at least every two years from when they are established. If parties cannot come to an agreement, they go to arbitration with the CRTC.
But White did say there are some beneficial aspects to the terms, including the hand-off stipulations and rejection of “wind down” provisions that would have restricted MVNOs from adding new customers near the end of the mandated regime, which is to sunset after seven years.
