Regulator credits Quebecor for lowering prices in market
By Ahmad Hathout
OTTAWA – Quebecor will need to use the rate proposed by Bell for access to the telco’s national wireless network, the CRTC ruled Tuesday.
The regulator selected Bell’s price per gigabyte of data after the two parties could not on their own agree to commercial terms for access by Quebecor’s mobile virtual network operator business to Bell’s national wireless network.
“That rate best meets the evaluation criteria, and will promote competition, affordability, and continued investment by both companies in their networks,” the regulator said in a statement.
“With access to larger networks, regional competitors are able to offer services in parts of Canada that they do not currently serve,” the statement added. “Regional competitors must then build their own networks in these areas within seven years.”
In a preface to its analysis, the CRTC noted that Quebecor’s national expansion “may already be having an impact on retail prices.”
The regulator noted that Quebecor’s newly acquired Freedom brand released in May several large data plans at lower prices, which got competitors to introduce similarly priced plans. Those plans include 20 GB and 30 GB of data for $35 and $45, respectively.
These plans were introduced after the regulator selected Quebecor’s rate for access to Rogers’s national wireless network, which is being challenged by Rogers in the Federal Court of Appeal.
“These plans are now significantly cheaper than the plans from March 2023, the ones used in the analysis in the [Rogers] proceeding,” the CRTC said Tuesday. “Accordingly, there are indications that there is already progress on the policy objective set out in paragraph 7(b) of the Act and the objective in paragraph 2(b) of the 2023 Policy Direction.”
“The Commission considers that Bell Mobility’s offer would enable QMI to continue to advance affordability by at least maintaining its current prices,” the regulator added. “Therefore, the Commission is of the view that either offer would enable QMI to provide its current lower-priced mobile wireless service plans in new markets.”
The CRTC said in its Tuesday decision that the MVNO access regime is not intended to “guarantee a risk-free profit margin” for Quebecor and its “ability to compete should not be assessed by looking at only the profitability of specific plans, but rather by looking at all of the wireless plans it offers.”
The regulator noted that it needs to balance Quebecor’s access to new markets with the “potential negative consequences on sustainability of competition and incentives to invest that could result from increasingly lower MVNO access rates.”
The decision comes after Bell CEO Mirko Bibic said several times that the company was hoping the CRTC’s decision to select Quebecor’s rate for access to Rogers’s network would not set a precedent for future final offer arbitration decisions.
In its appeal application, Rogers alleges the regulator’s reasoning for its decision does not square with the just and reasonable provision under the Telecommunications Act.
Rogers alleges the CRTC made a legal error when it reasoned that the cable company could suffer a short-term loss to its wireless division because its other divisions are profitable.
Bell backed Rogers’s application for a review of that, noting its concern about the precedent such a decision could set for future hearings.
The CRTC added a caveat to that Tuesday, saying that despite what it said about not needing to require the incumbents’ costs be recouped over the short period, “fair compensation for the wholesale MVNO access provider is still an important consideration in evaluating offers.”
The CRTC also said Bell did not provide all the requested information it asked for, but was still able to use other methods to make a decision. Because of that information gap, the regulator said Bell could not successfully prove that Quebecor’s offer would have a significantly greater impact on its incentives to invest in its network.
Despite that, the decision said Bell has “raised a valid concern” regarding the long-term impact of “artificially low wholesale rates on the policy objective of fostering network investments, which is particularly relevant in suburban and rural areas.”
