Tuesday, May 17, 2022

Government rejects petition to amend virtual mobile operator policy

The Canadian government has rejected a petition submitted by dotmobile (also known as Data on Tap) to revise the mobile virtual network operator (MVNO) decision issued by the Canadian Radio-television and Telecommunications Commission (CRTC) early last year.

The problem lies with the Telecom Regulatory Policy CRTC 2021-130, in which the CRTC defined the framework for Canada’s major facility-based operators, including Bell, Rogers, Telus, and Sasktel, to allow regional operators to sell their services using a portion of their networks.

The decision, which came into effect on April 15, 2021, would allow regional operators who own wireless spectrum licenses in certain areas to rent mobile network capacities from Canada’s major telcos for a period of time. The goal, as described by the CRTC, was to give these regional operators time to build a customer base in an area while they deploy their own networks.

Regional operators almost immediately criticized the decision; dotmobile was an opponent of the current MVNO structure from the beginning. In an earlier interview, the company founders said the CRTC mislabeled what an MVNO is. They argued that in a true MVNO model, the service reseller should not have to own any spectrum licenses or infrastructure. Having these requirements only stifles competition as smaller operators cannot afford costly wireless spectrum licenses.

On May 4th, 2021, dotmobile drafted a petition with several recommendations to the CRTC, including removing some requirements laid out in the original decision, specifically:

  • The removal of all spectrum licensing requirements.
  • The removal of the seven-year limitation on mandated wholesale access.
  • The removal of the requirement to own and operate an existing radio-access network.

dotmobile wrote in the filing that while the current MVNO decision will marginally improve competition, its policies need an overhaul to have a greater effect. The petition gained support from 30 independent telecom providers, including TekSavvy, Competitive Network Operators of Canada (CNOC), as well as the Public Interest Advocacy Group.

After a year of mulling, Industry, Science, and Economic Development Canada (ISED) decided against the changes proposed by dotmobile.

“A primary consideration in this review was that expanding MVNO access to providers that do not possess spectrum and have not invested in facilities would undermine the work of smaller regional providers that have already invested substantially to increase competition.” wrote ISED in a statement published on April 14. “Based on this review, the Governor in Council has declined to vary the CRTC’s decision.”

With that said, ISED conceded that the wireless prices are still too high despite the Federal government announcing that it has reached its 25 per cent price reduction target.

“That’s why we’ll watch carefully to ensure these rules for MVNO access will lead to more choice and lower prices for Canadians.” wrote the release.

The decision immediately drew fire from dotmobile.

“The Canadian government reviewed our petition, saw the support it had from numerous independent telecoms, knew that competition was being reduced or impacted by the Rogers/Shaw deal… and still chose to support the CRTC and their baffling definition of Mobile Virtual Network Operator,” wrote the company in a searing blog post.

The blog post further called this decision a win for the Big Three telcos, and said that this would cause “inequity and discrimination in the form of punitively designed wireless service and significantly higher effective prices for seniors, newcomers, students and families.”

“For an economy ranked dead last by the OECD for growth prospects, stifling innovation and access to connectivity (that we are all vested in) is a major disadvantage,” wrote the post.

The official decision text can be found here.

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Jim Love, Chief Content Officer, IT World Canada
Tom Li
Tom Li
Telecommunication and consumer hardware are Tom's main beats at IT World Canada. He loves to talk about Canada's network infrastructure, semiconductor products, and of course, anything hot and new in the consumer technology space. You'll also occasionally see his name appended to articles on cloud, security, and SaaS-related news. If you're ever up for a lengthy discussion about the nuances of each of the above sectors or have an upcoming product that people will love, feel free to drop him a line at tli@itwc.ca.

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