Small providers, incumbents clash over WiFi-based MVNOs

Mandating wholesale roaming access to Wi-Fi-based mobile virtual network operators (MVNO) will encourage innovation and competition by providing Canadians with more wireless service options, some organizations and small providers told the CRTC, while incumbents argued such a mandate would actually threaten their investment in future technology, including 5G. “There is insufficient competition in the wholesale level of the mobile wireless services sector to deliver the benefits of effective competition to Canadian consumers,” the Canadian Cable Systems Alliance (CCSA) said in its intervention. Comments were due Friday and released on Monday. “The regulatory framework should encourage and enable innovative service models with respect to what types of networks can qualify as ‘home networks,’ CCSA submits simply that the types of technology and service delivery models used should not, by themselves, constitute a barrier to entry.” The interventions were filed in response to a July call for comments by the CRTC on whether it was wrong to determine in March that Iristel Inc.’s WiFi-based MVNO Sugar Mobile was not entitled to roam on the network of Rogers Communications Inc., and to deny expanding the definition of a home network to include WiFi. The CRTC only allows “incidental,” not permanent access to an incumbent’s network in a wholesale roaming agreement. In the Sugar decision, the CRTC determined that including public WiFi in the definition of a home network would redefine the concept of roaming “since end-users accessing a visiting network would not necessarily need to use any of the facilities owned or operated by the wholesale roaming customers to gain access to the visited network.” In June, Innovation Minister Navdeep Bains asked the CRTC to review the decision and consider giving WiFi-based MVNOs access to roaming services, pointing to the WiFi model as one that “could benefit Canadian consumers as well, especially those with low incomes who are not served well by existing plans.” For its second kick at the can, representatives of smaller providers are calling on the CRTC to take on a technologically neutral stance for what constitutes a home network, in effect allowing WiFi-based services — as well as perhaps satellite in the future — to access roaming. Referring to a CRTC policy objective to “ensure the technological and competitive neutrality” of interconnection arrangements for access to networks, the Canadian Network Operators Consortium said in its submission that the regulator should ensure that is the case for WiFi-based MVNOs as well. This definition “is specifically designed to enable competition from new technologies,” without disadvantaging or favouring a carrier or provider, CNOC added. Agreeing with that premise, Ice Wireless said it “believes that the Commission should remain technologically neutral and not specify any particular form of technology that is permitted to be considered a home network.” Pointing to services in the United States, such as Republic Wireless Inc. and Alphabet Inc.’s Project Fi, Ice added that each provider will deliver its own unique service offering, with different options for consumers when it comes to price, international roaming, devices for sale, a bring-your-own-device (BYOD) policy, “and many other unique offerings.” It’s an argument that flies in the face of what other intervenors said is a system that actually harms innovation. “There is nothing unique, innovative or ‘new’ in the so-called ‘Wi-Fi First’ model,” the Canadian Wireless Telecommunications Association (CWTA) said, adding services by the likes of Sugar Mobile use software on devices that use free public Wi-Fi from unlicensed spectrum to connect users. This, it said, allows them to “avoid commercial resale agreements and/or avoid purchasing spectrum.” The organization added: “It would discourage innovation and investment by all facilities-based mobile carriers. Stifling investment in network infrastructure would worsen the urban/rural digital divide and jeopardize Canada’s opportunity to be a world leader in the development and deployment of 5G technology and services, and the Internet of Things .” That perspective was also shared by the incumbents BCE Inc. and Rogers, both of whom said that there is sufficient competition and low prices in the Canadian market. Those companies already had to address a Part 1 application of another provider, TNW Wireless Inc., which wants to offer a service that it says has the unique capability of “deregistering” from the roaming partner when it connects to WiFi, ensuring that it is not in a permanent state of roaming. Bell said allowing the practice will undermine the business case for regional players like Shaw Communications Inc. and Quebecor Inc.’s Videotron “at a critical point in their development as sustainable competitors, and will reduce the ability and incentive of all facilities-based competitors to roll-out next generation technologies quickly or invest in rural areas.” Bell recommended that the CRTC consider removing the ban on three- and four-year contracts to effectively address the major issue affecting affordability for low- and middle-income Canadians, which is handset prices. Rogers added in its own submission that the government’s rural broadband initiatives, specifically its Connect to Innovate program, would suffer if the CRTC reverses its decision. “The fragile economics of serving these communities will be weakened by a new wholesale wireless framework that will allow service providers to avoid their own investments by exploiting the investments of their competitors. “Expansion to these communities will be the first to be curtailed since the carriers will have less cash flow and it is hard for facilities-based carriers to earn a return on these investments.” For its part, Rogers recommended that if the regulator feels added measures are needed to make services more affordable for low income Canadians, it should institute a voucher program that customers can use toward their monthly plan. For new facilities-based entrants, Xplornet Communications Inc. said this could spell an existential crisis. Because the MVNOs won’t have spectrum or network access costs apart from roaming charges, they would be able to undercut the prices offered by other wireless service providers, the company said in its submission. But Ice Wireless said there is no evidence that allowing more MVNOs to operate will have a negative impact on investment for network infrastructure. “In fact, the evidence suggests that the opposite will occur and that investment in mobile wireless network infrastructure in those parts of Canada that need it most will actually be improved” by extending the home network definition to include WiFi. “The revenues that Ice Wireless hopes to generate from will assist Ice Wireless in increasing its level of investment in mobile wireless network infrastructure in its rural and remote northern operating territory,” it added. The Public Interest Advocacy Centre said in its submission that the academic research doesn’t show a negative impact on network investment when MVNOs enter the market, but it shows that the facilitation of MVNO entry outweighs any concern about investment. “In fact, in some cases readily partner with MVNOs to share the costs of network investments,” it said. Citing the aforementioned MVNOs in the U.S., the intervenors in favour of MVNO access to wholesale roaming, including Distributel Communications Ltd., said that allowing these MVNO providers to access wholesale roaming will give Canadians more options and therefore enhance competition, innovation and reduce prices. “In many countries, play an important role in ensuring affordability and innovation,” Distributel said, “and we see no reason why the same cannot be true of Canada.” — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Small providers, incumbents clash over WiFi-based MVNOs

News | September 12, 2017

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Small providers, incumbents clash over WiFi-based MVNOs

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