Big Three reiterate stance against mandated MVNO access in final submissions to CRTC

The smaller carriers argue the current state of the mobile wireless market doesn't meet consumers' needs


Telus, Rogers and Bell have reiterated their arguments opposing mandated MVNO access and stated that it would have negative consequences on the industry.

Carriers have sent in their final submissions for the CRTC’s review of mobile wireless services, and provided their final comments regarding mandated MVNO access.

Mobile virtual network operators (MVNOs) are providers that don’t have an established network, and instead rent access to existing networks.

The national carriers are arguing that the Canadian mobile wireless industry is already competitive and that there isn’t a need for mandated MVNO access. The carriers say that facilities-based competition is the right policy and has worked so far.

Telus argues in its submission that mandated MVNOs would not bridge the digital divide that exists in parts of Canada, and that it would widen the gap. The carrier says that since MVNOs do not build networks, it would not expand coverage or service in rural Canada.

“Reduced network investment by MNOs as a result of mandated MVNO access is likely to manifest first in reductions in rural investment where the higher costs of building and maintaining networks generate lower returns,” the carrier argues.

Further, Bell argues in its final submission that mandating access for MVNOs would not improve outcomes for consumers.

“Attempts by other parties to identify benefits from mandated access for MVNOs have been extremely limited, and have not been relevant to a market like Canada with four facilities-based carriers, including a more recent entrant that is continuing to gain market share,” the carrier argues.

Bell states that MVNOs do not plan to introduce wireless service innovations that could benefit consumers or drive down costs over time.

In its submission, Rogers argues that regional carriers are rapidly strengthening their competitive positions and challenging the national carriers and already providing consumers with more choice.

“Each year since 2015, as many as six million customers have switched providers, demonstrating the intense rivalry that exists in the market,” the carrier notes.

Rogers argues that Vidéotron and Freedom have dramatically increased their subscriber bases, taking a disproportionate share of net new customer additions as they expand their networks. Rogers states that there is “clearly no need to impose artificial competition” through mandated MVNO access.

Further, the carriers argue that COVID-19 has significantly impacted Canada’s wireless telecommunications industry and that the pandemic will have long-lasting effects.

They state that now would be the worst time to burden the industry with MVNO regulation that would slow investment and introduce uncertainty.

Shaw Communications argues in its submission that mandated MVNO access will not only “prohibit competitive investment in areas that lack alternatives to the Big Three, it will impede the consumer benefits that are emerging in those other markets where the Big Three already face the resilient competitive pressure of regional disruptors.”

The Competition Bureau argues in its submission that a facilities-based MVNO model will enhance competition and accelerate the disruption of market power. It notes that broadening the eligibility criteria of the facilities-focused MVNO model may reduce regional carrier investment.

Opposing arguments from smaller carriers

TekSavvy argues in its submission that the current landscape of the mobile wireless market in Canada does not meet the needs of consumers, and that it is premature to consider imposing restrictions on any MVNO model.

“Certain benefits of an MVNO would include increased choice in wireless provider, better service for those in rural areas, more affordable plans for vulnerable populations and market offerings that would meet the needs of consumers,” the carrier outlines.

The carrier argues that the CRTC must mandate wholesale access to relieve the mobile wireless marketplace from dominant market power of the Big Three. It states that the COVID-19 pandemic has brought additional urgency to the matter.

Distributel notes in its final comments to the CRTC that the long-standing focus on facilities-based competition will not produce the competitive pressures needed to solve the issues in the retail wireless market identified by the commission.

“Mandated access to MVNO services could be utilized by both the non-national wireless carriers and service-based wireless providers to achieve the level of competition, innovation, differentiation, and choice in the retail market sought by the Commission,” the carrier notes.

Distributel says that the CRTC should take “a dim view” of the claims that mandating access to wholesale MVNO services will result in harm to investments by wireless carriers.

It’s interesting to note that around 60 percent of Canadians support new regulations that would require the Big Three to share their infrastructure with smaller providers to promote wireless competition, according to a report released by the Canadian Internet Registration Authority in February.