Canada's wireless operators – including fourth carrier Wind Mobile Corp. – are firing back at a regulatory challenge that raises the issue of mandated access to their networks by companies without cellular airwaves of their own.
The carriers filed materials this week in response to last month's application by the Canadian Network Operators Consortium (CNOC) asking the Canadian Radio-television and Telecommunications Commission (CRTC) to "review and vary" part of its landmark ruling this spring on wholesale wireless services.
CNOC, which represents 37 independent Internet service providers (ISPs), has asked the CRTC to reconsider its decision not to support mandated access to wireless carriers' networks by "mobile virtual network operators." Known as MVNOs, such operators don't build their own cellular networks but instead purchase access from established carriers.
MVNOs can range from simply reselling airtime under a different brand, to more complex structures that operate some of their own network elements but buy access to the carriers' spectrum and cell towers. It is the latter model, known as "full MVNOs," that CNOC argues the CRTC should support as a means of promoting more competition in the retail market for cellular services.
Wind argued in a filing that CNOC has not established "substantial doubt as to the correctness" of the CRTC's May 5 decision, which did not support mandated access for resellers. The Toronto-based wireless carrier, which has operated in urban areas in Ontario, British Columbia and Alberta for almost six years, said mandating access would undermine policies designed to encourage investment in radio access networks (RANs) that improves service for customers.
Wind, and other small players, can purchase roaming services from the Big Three carriers – Rogers Communications Inc., BCE Inc. and Telus Corp. – at wholesale rates the CRTC is in the process of setting. But the small carriers must first build their own cellular network in any area where they plan to sell wireless services.
In its filing, Wind pointed to an estimate from CNOC that full MVNOs would face initial infrastructure costs of $12-million (U.S.) to $15-million to set up the necessary core networks. "Wind notes that this is a very small investment threshold compared to the hundreds of millions, or billions, being spent on RANs," the company said.
Rogers, BCE and Telus also filed responses disputing CNOC's application, arguing a mandated MVNO model is unnecessary to promote competition and would decrease incentives to invest thereby threatening network quality. They also argued the CRTC ruling was based on a comprehensive record that included a week-long public hearing last fall.
Cogeco Cable Inc., the Montreal-based cable operator which said last year it would launch a wireless business if the CRTC supported a mandated MVNO model, filed materials in support of CNOC's application.
The commission will now re-examine its original decision in light of the arguments before it. CNOC is also challenging the CRTC's decision not to regulate access to tower and cell site sharing services.