TORONTO – Accusations of unfair conduct, cautious optimism and a Ben Affleck meme – the Canadian Telecom Summit’s regulatory blockbuster panel, held Tuesday, had it all.
The panel (pictured above left to right) was moderated by Globe and Mail reporter Alexandra Posadzki, and featured Ceri Howes, head of regulatory at Opensignal, Dennis Béland, vice-president of regulatory affairs, telecommunications at Quebecor, Geoff White, executive director of Competitive Network Operators of Canada (CNOC), Paul Beaudry, vice-president of regulatory affairs at Cogeco, Ted Woodhead, senior vice-president of regulatory at Rogers Communications, Samer Bishay, CEO of Iristel and Stephen Schmidt, vice-president of telecom policy and chief regulatory legal counsel at Telus.
“I read the MVNO tariffs proposed by the incumbents when they came in and I felt like Ben Affleck in that meme where he’s smoking outside and looking at the sky” – Paul Beaudry, vice-president of regulatory affairs at Cogeco
A big topic of discussion on the panel was the CRTC’s MVNO (mobile virtual network operator) decision from earlier this year. The decision compels the incumbents (Bell, Telus and Rogers) and Sasktel to provide MVNOs that meet certain requirements, including owning spectrum, with access to their networks for seven years.
Prices for MVNO access are to be commercially negotiated, while tariffs with terms and conditions for the services were filed by Bell, Telus, Rogers and Sasktel for approval by the CRTC.
Both Quebecor and Cogeco have been vocal about wanting to take advantage of the new MVNO framework set out in the decision, but neither of them are happy with how things have unfolded since the decision was made.
They both have issues, for example, with the tariffs filed.
“I read the MVNO tariffs proposed by the incumbents when they came in and I felt like Ben Affleck in that meme where he’s smoking outside and looking at the sky,” Beaudry said. “I think that they’re implicitly, trying to re-litigate the terms of the decision itself that was issued by the CRTC by trying to restrict eligibility, imposing unreasonable conditions on the potential MVNOs and by making it very difficult in its current state to really benefit from the regime.”
Cogeco believes the tariffs do several things the CRTC did not intend including limiting the timeframe during which MVNOs can use the service despite the seven years the CRTC set, and other “conditions that just aim to make life more difficult for us,” Beaudry said.
“We’re disappointed – we’re not surprised but we’re disappointed,” he went on to say. “But we trust the CRTC wants this framework to work… we’re cautiously optimistic that the CRTC will see through some of the unreasonable conditions the incumbents are trying to pass through and correct the situation.”
White said this was “a perfect example… of the steps, creative steps, the big three will go to step on the throat of competition.”
While Béland agreed with Beaudry he put an emphasis on the need for speed. “You might have noticed Quebecor is eager to get into this business, so the CRTC needs to move quickly,” he said. “If it drags out for a year while we haggle the detailed terms and conditions no one is going to be well served by that.”
Béland indicated Quebecor took a constructive approach to its reply to the tariffs the incumbents filed with the CRTC in an effort to keep the process from dragging out. “We think the pieces are there,” he said. “Our request of the Commission is simply to please move quickly on finalizing that policy.”
Not everyone was as enthusiastic about the MVNO decision as the panel’s Cogeco and Quebecor representatives.
Bishay said when the decision came out they “were kind of torn because on the one hand, it was great for Iristel and Ice Wireless… but we knew right away that this was not good for consumers.” He said the policy is still codifying in the system that there will be a limited number of new players. Bishay also noted he does not understand why Vidoetron and Cogeco would not want a full open MVNO structure since they would also benefit from it.
Schmidt said MVNO is a recycled policy called resale from 20 years ago that had failed, sarcastically adding “but now it’s got an awesome new name, called MVNO.”
White responded by arguing we cannot say resale or service-based competition on the wireline side has failed yet. “I think the reason it’s struggling right now and members of my association are struggling right now is because the incumbents have killed it through endless lawyering and lobbying,” he said.
“That was a near-death experience for Canadian telecom that August 2019 TPIA rating decision” – Dennis Béland, vice-president of regulatory affairs, telecommunications at Quebecor
As for the CRTC’s MVNO decision, White said he does not believe the Commission made the right one.
“The smaller scrappier players who are not Cogeco or Videotron were standing ready to make service more affordable for Canadians – and we are an outlier when it comes to affordability – those smaller players have been shut out of the market by a regulator that appears to believe that you have to be massive in order to do the job well. And that’s simply not true,” he said.
White said once they understood spectrum ownership would be a prerequisite for the MVNO model, CNOC “wrote the minister asking for a brief delay so that some of our members could have a shot at bidding on the spectrum and the minister of industry quietly said, you know, this has already been delayed.”
Spectrum is not the issue, White explained. “It’s what the CRTC is doing vis-a-vis competition.” He said it is just one recent example “of the CRTC just killing any prospect of reasonable competition.”
Another recent controversial decision made by the CRTC has to do with wholesale rates.
“One of the things we discovered over the past couple of years is that one of the things that the CRTC does very poorly, is wholesale rate setting through the approval of cost studies,” said Béland.
“That was a near-death experience for Canadian telecom that August 2019 TPIA (third party Internet access) rating decision. The CRTC has to find a better way to make those sorts of decisions,” he said.
White immediately shot back, saying: “The smaller players are facing near death as a result of the 2021 decision – I think it’s fair to say that even the incumbents were surprised.”
(CRTC chair Ian Scott spoke at the conference the previous day and defended the TPIA and MVNO decisions – you can read about it here.)
There was some discussion on the panel of Rogers’s pending deal with Shaw, with Woodhead explaining “there’s lots of good here for consumers.” He specified things including freezing Freedom Mobile prices for three years and noted the company’s low-cost plans. Other panelists including White and Bishay questioned whether not the deal would in fact be good for consumers.
Nothing was said of the recent changes to Rogers’s board. However, the panel took place just hours before the company announced its CEO Joe Natale was leaving the company, so it is not unreasonable to think this might have been different if the panel was held on day three of the summit instead of on day two. What a difference a day makes.
For more on the regulatory blockbuster panel, please click here.
