CRTC ruling is another loss for Canadians

The big decision is out, and it's not good for Canada. We break down why this ruling has nothing to do with MVNOs and everything to do with building more towers.

The headlines about yesterday’s ruling on the Wireless Industry Review (2019-0057) make it sound like the CRTC has approved MVNOs like dotmobile, Mint Mobile or TextNow. The byline on the Government of Canada website even states that the “commission approves mobile virtual network operators for Canadian market.”

Just another decision focused on building towers, there is nothing virtual about it

In truth, the CRTC has not mandated or approved an MVNO framework. Instead, they are creating incentives for regional providers like Freedom Mobile (Shaw soon-to-be Rogers) and Videotron (Quebecor Media) to expand their networks into more places.

Owning spectrum and operating a radio access network (towers) makes you an MNO. There is nothing virtual about it, even if the CRTC decided to use the term MVNO.

Here’s the high-level breakdown of the decision.

  • Regional carriers can use BIG3 networks to provide service outside of their current network coverage, as long as they already own spectrum licenses there.
  • The mandate is temporary and after seven years the regional providers lose access. They must transition their customers off of the BIG3 networks, which means they must build new networks in these areas.
  • During this period of network construction, the BIG3 must provide seamless roaming (with negotiated rules - many tried before) between their existing network and the regional’s new network.
  • Regional carriers can resell their BIG3 network access to real MVNOs.

(Feel free to compare this to the policy objectives here.)

This is not good for Canadians (well, anyone except for the BIG3)

The CRTC tried this approach in 2009 with spectrum set-asides and other incentives, resulting in the birth of pure-play wireless challengers Mobilicity, Public Mobile and WIND Mobile.

  • Mobilicity was purchased by Rogers and dissolved.
  • Public Mobile was bought by Telus and all the customers forced onto the Telus network at slow speeds and higher prices.
  • WIND Mobile sold a few times and became Freedom Mobile when Shaw bought them. Shaw is now being acquired by Rogers.

The decision (which didn’t factor in Shawgers) to give regionals the support they needed in 2009 is coming in far too late. The writing is on the wall. Facilities-based competition results in market consolidation. It is not good business to build lots of overlapping radio-access networks, and Canadians don’t want even more towers in their backyards - even more so when they aren’t necessary.

We don’t think being able to presell service while building a network is enough incentive for regionals to bring their service to more Canadians. Most will continue to be left behind.

Part of the problem is that the government is busy patting telecoms on the back for not falling apart when people started working from home, which actually put less strain on the wireless network and increased sales of high speed home internet. Most people are paying for wireless plans that they’re barely using. And with everyone contributing with higher fees to the high-quality networks, shouldn’t they just work?

Ironically, the Shawgers acquisition means there’s still hope

The silver lining is that the decision does not take into account the Rogers acquisition of Shaw, because the public record for this proceeding closed in July of last year.

We know that services like dotmobile are needed by as many as 40% of Canadians. As long as that unaddressed need exists it will make sense for us all to keep fighting.

We can’t stop the Shawgers deal, it’s inevitable. We can make MVNOs a requirement of approval, though.

If enough of us raise our voices, we can turn the Shawgers deal into a win for Canada.

Stay tuned for more information on what you can do to help.

(Download DOT's CRTC decision overview presentation PDF here.)