Telecom Decision CRTC 2022-288
Telecom Decision CRTC 2022-288 stifles competition and is bad for consumers
“Facilities-based wholesale mobile virtual network operator (MVNO) access tariffs – Commission determinations on proposed terms and conditions.”
CRTC, once again protects the interests of large incumbent telecoms against the interests of potential competitors and contrary to the consumers’ and the publics’ interest.
The CRTC doubles-down on the failed “facilities-based telecom competition regime” which was created by monopoly telecoms prior to deregulation in 1993 to ensure there would be a very high bar for competitors to enter the market post-deregulation. But it was pitched to legislators and regulators as the most effective way to increase competition which they bought into or became complicit in the ruse. Facilities-based competition has resulted in telecoms building FTTP infrastructure to the same high-income residential addresses, in densely populated urban areas, leaving low-income urban and most rural residents with slow, asymmetrical, and unreliable copper or fixed wireless connections. This is why the digital divide is growing at a faster rate than it ever has before, despite governments giving telecom billions of dollars in taxpayer subsidies, mostly to large incumbents, to address the inequities. Given that Internet is essential service, as declared by the CRTC in Telecom Decision CRTC 2016-496, how is it acceptable that telecom providers are the sole deciders of who will be the broadband winners and losers based on internal rate of return calculations. Imagine a scenario where electricity or water providers duplicate electricity wires or water pipes down the same street, to the same civic address, for these essential services? It would be considered uneconomic and wasteful of scarce resources, not to mention, insane. Internet infrastructure is no different.
So, facilities-based competition has been a highly effective policy, embraced by the CRTC, ISED and most legislators, at stopping competitors before they can get started, because of the high cost of building telecom infrastructure from scratch. When a competitor does emerge, the incumbents employ price and non-price anti-competitive behaviours to deny them fair wholesale access in order drive them out of business. If that doesn’t work, the Big Three acquire the competitor, as we’ve seen play out recently with the Distributel acquisition by Bell and the proposed Shaw acquisition by Rogers. One piece of evidence of the anti-competitive success of facilities-based competition regime, is that the Big Three telecoms, Bell, Rogers, and Telus control about 90% of the mobile wireless market and about 98% of the FTTP wireline market in Canada, despite 29 years of deregulation purportedly designed to increase competition. Open Media is calling on the government to intervene with the CRTC, reverse course, and mandate the CRTC take on a consumer advocacy role, before the remain telecom competitors to the incumbent collapse or are acquired.
This decision against allowing true Mobile Virtual Network Operators (MVNOs) is a decision in favour of the incumbent oligopoly interests against potential competitors’ interests and contrary to consumers’ and the publics’ interest as Public Interest Advocacy Centre (PIAC) as stated. Excerpted from the foregoing link…“John Lawford, the executive director and general counsel of Public Interest Advocacy Centre, said in an interview Friday that the decision leaves consumers “pretty much back to a big three scenario for the foreseeable future.”
“So, it's like winter for another 10 years, easy. Unless something big changes, [like] some government comes in that wants to flip the table over,” Lawford said.
Lawford said that to be eligible, regional carriers will be required to be already operating a network and have previously purchased spectrum assets in the area they want to serve.
Additionally, he said the CRTC’s definition of an MVNO is a misnomer that stems from a 2021 policy, something that Wednesday’s decision did not correct.
“Virtual means you don’t have spectrum and you don’t have a network,” Lawford said.
“What you're basically doing is grabbing some or all elements of a network from the present providers and reselling it. That's what it is. And the CRTC said ‘no we don’t want that,’” said Lawford.
The bottom-line is this is yet another Decision to protect the oligopoly which exemplifies why Canadians pay some of the highest rates for mobile and broadband services in the world.