Montreal, March 22, 2018 – The CRTC announced today that it was launching a consultation to ensure lower-cost data-only wireless plans are available to Canadians across the country. The agency also announced that it will initiate a review of its wholesale mobile wireless framework within the next year.
“The fact that the CRTC did not decide today to allow resellers, or MVNOs, to access the networks of facilities-based providers at regulated rates is good news, at least for now,” says Martin Masse, author of an annual MEI paper on The State of Competition in Canada’s Telecommunications Industry. “The CRTC thus prevented the negative effects that such a major policy change could have had on the industry and on Canadian consumers.”
In June 2017, the Innovation Minister asked the CRTC to reconsider the distinction between large wireless providers and resellers, and see if a broader definition of “home network” that would include Wi-Fi should be adopted. This request by the Minister followed a dispute between Rogers and a reseller, Sugar Mobile, whose clients use their devices primarily by connecting to Wi-Fi networks.
Allowing resellers to access the networks of facilities-based providers at regulated rates could have discouraged investment in the telecommunications industry, which wouldn’t serve the long-term interests of Canadian consumers. “Propping up small players without a profitable business model by giving them privileged access to the resources of other providers runs the risk of discouraging the owners of infrastructure from investing and innovating, because they would then have to share the resulting benefits,” says Mr. Masse.
This drastic regulatory change would also fail to stimulate investments by resellers in order to build their own infrastructure, since they could then piggyback on someone else’s at prices guaranteeing them a margin of profit.
“Canada already has one of the best telecommunications infrastructures in the world, with some of the fastest networks and the most advanced technologies. The best way to keep these benefits is not to encourage artificial competition by giving privileges to resellers who do not invest, but by ensuring a regulatory environment that encourages investment,” says Martin Masse.
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The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and its conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.
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