The federal government has directed Canada’s telecommunications regulator to implement new measures to increase mobile phone and internet competition, including instructions to improve wholesale access by small providers to incumbent networks and protect consumers in case of future telecom outages.
On Monday, Innovation, Science and Economic Development Canada released the final version of its updated policy directive for the Canadian Radio-television and Telecommunications Commission, replacing previous directives with an new order that centres on fair access and consumer rights. The CRTC will use the directive as a guide when making future decisions.
Although the proposed measures had faced criticism from large telecom carriers for being overly prescriptive and possibly unlawful under the Telecommunications Act, ISED’s directive did not stray far from its draft, published last May, and, in fact, added more detail in some areas.
Compared to its previous directive in 2019, the new ISED policy is substantially more focused on issues of competition and the technical mechanisms of creating it, specifically in its endorsement of the wholesale internet access framework and mobile virtual network operator (MVNO) models. It comes on the heels of the end of Ian Scott’s term as CRTC chair in January, during which the commission made several decisions that were widely seen by critics as blows to small competitors.
Among ISED’s top priorities for the CRTC is enhancing the wholesale access, asking the regulator to ensure that the rates that Canada’s large phone and cable companies can charge smaller internet providers for access to the incumbents’ broadband networks are “just and reasonable.”
In the directive, ISED told the CRTC to “take action” to make improved rates available, and to ensure that wholesale internet access is available evenly across the market, including on fibre-to-the-home networks. While competitors can currently access incumbents’ fibre networks by making private deals with those companies, many have said the prices are currently too high for it to be profitable.
ISED also asked the CRTC to increase mobile wireless competition for affordable cellphone plans by, if necessary, amending the MVNO framework – which allows smaller carriers to access incumbents’ mobile networks – saying it is “prepared to move to a full MVNO model, if needed, to support competition in the sector.”
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Currently, only some carriers qualify for mandated access to incumbents’ networks. ISED said Ottawa would support a move to a full model – which would require incumbents to grant access to any new carrier – if the current measures aren’t seen as effective.
The directive also includes new language about improving consumer protection in the event of a service outage, which an official from ISED said emerged from consultations and were especially linked to the Rogers Communications Inc. outage last July 8 that left millions of Canadians without service for a day.
To further improve customer rights, the directive requires the CRTC to create new measures to address “unacceptable sales practices,” improve pricing transparency and make it easier for consumers to change or cancel services.
Ottawa released a draft of the policy directive in May, 2022. The proposal initially received a lukewarm response from some independent service providers, who said that while it was a step in the right direction, it put too much faith in the regulator to foster more competition.
Geoff White, executive director of the Canadian Network Operators Consortium, which is an industry group for independent ISPs, said in a statement that while he had hoped to see more direction related to wholesale access to incumbents’ fibre, he was pleased that the minister had, overall, resisted attempts to “water down” the policy.
Bell Canada spokesperson Eliane Legare said the company is studying the new policy direction. Telus Communications Inc. declined to comment on the direction.
In a statement, Rogers said it shares the government’s commitment to increased competition, affordability and investment. “We look forward to working with the government and the regulator to bring more choice, value and connectivity to Canadians.”
The new directive, effective immediately, will replace the 2006 direction, which included language about relying on market forces, and build on the 2019 directive to enhance competition, affordability and consumer rights.
In a January interview two weeks after the start of her term, CRTC chair Vicky Eatrides told The Globe and Mail that reviewing the wholesale framework was among her top priorities, and that Canadians should “stay tuned for a better model.”
The finalized policy comes just days before the possible culmination of one of Canada’s largest ever telecom mergers: Rogers’s $20-billion takeover of Shaw Communications Inc. The companies extended the self-imposed deadline for the deal to Feb. 17 from Jan. 31 as they wait for final approval from Industry Minister François-Philippe Champagne.
The Competition Bureau, Canada’s merger watchdog, argued before the Competition Tribunal in November and Federal Court of Appeal in January that the takeover would reduce telecom competition in Canada, but in both cases the judges sided with the companies.
Irene Galea