Tosses “incoherent” barb back at the industry
TORONTO – ISED Minister Navdeep Bains was the closer at the 2019 Canadian Telecom Summit on Wednesday and his comments made on stage – as well as after – should leave wireless industry leaders and observers more certain than ever that a major regulatory shift, especially when it comes to the long held policy bedrock known as “facilities-based competition,” is going to happen.
For three days, the major carriers did their level best to lay out a case against mobile virtual network operators (MVNOs, or wireless resellers) as well as the reasons why it’s more expensive to be a wireless operator in Canada – and that wireless prices are in line with the rest of our peer nations, as we reported here, here and here. MVNOs was all the entertaining Regulator Blockbuster panel on Tuesday could talk about for 90 minutes.
During his speech Wednesday, however, Bains lauded the industry for its investments but made it again very clear what he and his government is fixated on: Price. “We have… been listening to the millions of Canadians who have been sending us a message loud and clear: They need more affordable Internet and cellphone plans,” he said, while also praising the CRTC’s new, proposed policy directive which re-focuses the Regulator squarely on consumers. “We cannot ignore the fact that Canadians pay some of the highest prices in the world,” he added.
So, when Minister Bains met with reporters after his time on stage (where he offered a prelude to the spectrum moves made public later on Wednesday), we asked him his thoughts on MVNOs and facilities-based competition.
We’re not going to edit what we asked and how he answered, we’re just going to repeat the exhanges for you to judge. We know what it’s led us to believe (it’s in the opening pragraph of this story), but you can make your own call. What’s below is word-for-word.
Greg O’Brien: You said you were going to bring good news to the industry, and it's been three days here of, ‘hell no, we don't want MVNOs.’ So, I'm wondering what you think about the MVNO question and is this something that you, and your ministry and your government are definitely behind getting launched?
Navdeep Bains: So, you may recall, when we sent back the decision regarding MVNO to the CRTC, we did so because we want to see more technology looked at, to look at low cost data plans and ultimately, the CRTC decided to go another way. But, what it did do was it forced the carriers and providers to come forward with low cost data plans.
So, from my perspective, if we want to bring down prices, we have to look at competition, which we're deploying in a very thoughtful way through the spectrum auctions. We have to look at technology in a thoughtful way to bring down prices as well. So, both are very important because the desired outcome is consumers should pay less for their cell phone bills and for their internet plans.
GOB: Right. But, the facilities-based carriers, whether it's Bell, Rogers and Telus or Freedom, Xplornet, and Eastlink and Vidéotron, they're saying that if MVNOs are forced onto the networks, that's going to impact their ability to invest, or their desire to invest, especially in the rural areas.
Telus called it incoherent policy, yesterday.
NB: I think they're being incoherent, in terms of not acknowledging the fact that we have a responsibility to Canadians and Canadian families, that are using or are more implicated in the digital world today than they ever have been. For kids, using the internet to study, to do homework online, for individuals, for entertainment purposes or downloading a movie, or for individuals that want to start up their business.
The digital world is such a critical part of our day-to-day lives, and so, we need to have world-class networks and we're seeing significant investments. Last year, it was $12 billion worth of investments by these companies that are concerned about MVNOs, that are concerned about government policies. They continue to make investments, recognizing that these investments are essential to provide better outcomes for consumers, and there's a good return on the investment.
So, we feel that our policies are appropriate, and we feel that they are consistent with affordability. They are consistent with better coverage, and it is consistent to make sure we still maintain good quality networks.
GOB: So, do you think that their threats to pull back investments, are just threats and that they're still going to spend on their networks?
NB: I mean, each company's different, each situation is different. The business plan, business model is different. Different regions. But, we know, in regions where we have more competition, prices are 33% cheaper for the consumer. So, that's what we're trying to achieve and that's exactly been our policy and position.
GOB: So, is the government definitely behind the MVNO concept for the wireless industry in Canada?
NB: So, MVNO is one solution but we’re, broadly speaking, in favor of technology being deployed to help find solutions to reduce prices for Canadians. So, MVNO is one such solution, but there's other solutions as well, and what we want to see is more competition and more technology to drive down prices. That's been our policy.
Ed note: Minister Bains then answered a few questions from other reporters about spectrum and deflected a couple of queries on what the federal government might decide on Huawei, but before he left, we asked him about the facilities-based competition policy and definition directly.
GOB: I had one more clarifier, with the facilities-based policy, that the government and CRTC has always held. Facilities has always meant hardware, wires, radio transmission, towers, all the rest of it, (but) can facilities, now, be taken to mean, from your government's point of view, software, or cloud-based sort of things, the digital world rather than the hardware it's always meant?
NB: I think that's a fair interpretation because those are significant investments made by companies. We do support facilities-based approach, but we also, as I said before, want to see more innovation with technology, that's why MVNOs come up in our conversations frequently, but the definition is much broader than simply hardware.
GOB: So, facilities can mean software and all the rest of it?
NB: Potentially, absolutely, yes. Because, in the new digital world, software, it requires significant investments, a significant IP behind it, as well as significant resources, and we recognize that.
Ed note: If we had a do-over, we’d likely be even more specific, asking about what he thought of wireless plays like dotmobile, which would not have a network, and we wouldn’t have said the word “hardware” so much when we meant “physical networks”, but we hope this gives readers a bit more insight into what the minister and his ministry is thinking, beyond what was said on stage.
