Include ‘investment’ in new policy direction: big telecoms

Canada’s four largest wireless providers are asking the government to incorporate references to “investment” and the previous, market-focused policy direction in its proposed new directive, meant to foster affordability and consumer interests. “Now is not the time to implement a significant shift in the Government's long-standing policy of encouraging facilities-based competition, which has given Canadians world-leading networks at affordable prices with minimal government investment compared to other countries,” BCE Inc. said in its submission to the government. The government announced the new policy direction in February. It would require the regulator to consider how regulatory measures “can promote competition, affordability, consumer interests and innovation” in issuing new regulations and rulings. In contrast, the previous policy direction, dating from 2006, requires the CRTC to “rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives.” As experts predicted, some of Canada’s largest wireless providers took issue with the wording of the directive. Bell, Rogers Communications Inc. and Shaw Communications Inc. all argued the policy direction should explicitly encourage investment. Bell proposed that the directive make specific reference to “the need to encourage investment in rural and remote areas,” while Shaw suggested new wording about reducing “barriers to investment for new and smaller or regional telecommunications service providers.” Rogers said that “investment” should be added as one of the factors the CRTC must consider when making decisions, along with competition, affordability, consumer interests, and innovation. It proposed that the CRTC should have to consider the extent to which its decisions “encourage investment in advanced telecommunications networks including in rural and underserved areas.” Shaw said in its submission that we “cannot jeopardize the strong competition that is just starting to emerge in the wireless market by taking our eye off the goal of building networks that can compete with the Big 3.” Telus Corp. also said the direction “fails to recognize and prioritize the importance of facilities-based competition, which drives investment in infrastructure.” The key issue around the effect the policy direction could ultimately have is how “competition” is defined, experts said. The large wireless providers want that interpreted as facilities-based competition -- not competition from wholesale-based providers like mobile virtual network operators (MVNOs). But the government has been pushing mandating at least some MVNOs and the CRTC has now followed suit, reversing its long-held view opposing mandated MVNO access only days after the policy direction was announced. “Our primary concern with the Proposed Direction is that it has the potential to undermine facilities-based competition and the jobs and investments in new and expanded telecommunications networks that such competition brings,” Bell said. The three telecoms also took issue with a line in the directive telling the CRTC to foster “affordability and lower prices.” Rogers said that “an unbounded requirement to promote continuously lower prices would lead to pricing below economic levels and would undermine the government’s objectives.” Bell also argued that the “requirement that the CRTC foster ‘lower prices’ directs the regulator to ensure that prices perpetually decline without any consideration to the impact on network and service quality over the long term.” Instead, both companies said the goal should be “affordable prices.” The companies also noted that the government plans to have the new policy statement “exist in complementary fashion” to the previous policy direction, with Bell and Shaw stating that clarification should be added to the policy direction itself. Telus also recommended that the text should reference investment and that the new policy direction should be complementary to the previous one. But it said it would rather delay the new policy direction altogether until the expert panel reviewing the broadcasting and telecom acts issues its final report in January 2020. In an interview with The Wire Report last week, Innovation Minister Navdeep Bains addressed the feedback he’s received from large telecoms about the new policy direction. “They recognize that our focus is on Canadians, our focus is on consumers, our focus is to have more affordable prices for cellphone and internet users,” he said. “They recognize that this policy directive is a clear commitment from our government to make life more affordable for Canadians… that this is the direction we’re taking and they’re wiling to participate in a meaningful way to achieve those outcomes.” Bains also declined to specify whether the government has set any measures or benchmarks to assess the success of its strategy to increase competition and affordability, such as a number of market players, or a certain amount it wants to see prices drop. “My measurement for success would be, are we seeing a decline in prices for consumers?” he said. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

Include ‘investment’ in new policy direction: big telecoms

News | April 15, 2019

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Include ‘investment’ in new policy direction: big telecoms

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