Canadian regulator warns mobile operators of more competition

Canadian regulator warns mobile operators of more competition

Canadian mobile operators should expect more competition, the country’s telecoms regulator warned in his last week of office.

Jean-Pierre Blais, whose five-year term of office as head of the Canadian Radio-Television and Telecommunications Commission (CRTC) ends on Saturday, delivered this warning among a series of others in a speech to operators, politicians, officials and the country’s creative industry.

Blais, who did not reapply for his job, told operators that “unless things change, the CRTC will need to act to increase wireless competition, which in turn will lower retail wireless rates, raise data caps and spur further innovation”.

He compared the Canadian market unfavourably with the US, where “wireless service providers do not share their networks, which results in excess capacity”. As a result, “carriers lower retail prices to bring in more customers and offer unlimited data plans to use up this capacity. In addition, this excess capacity has led to a reseller market that is supporting many mobile virtual network operators (or MVNOs) that typically target specific consumer segments.”

He said Canadian network sharing has made networks efficient, especially in a market with low population density, but “we have yet to see a level of competition that puts downward pressure on retail rates”.

Blais, whose replacement has not been announced, said: “Until the current reality changes – if indeed it ever does – Canada will always have a problem of high retail wireless prices.”

His successor at the CRTC will have to intervene – by regulating retail prices, “although we would much rather see increased competition between providers create better choices for consumers”, by mandating wholesale access for mobile virtual network operators, or “to review the impact network sharing among facilities-based providers has on competition”.

He reminded his audience, at the Banff World Media Festival in Canada, that under his watch the CRTC had shifted its focus from broadcasting to broadband, though the “sharp, clear line that once separated broadcasting from telecommunications is increasingly softer and blurred”.

The CRTC decided in December 2016 to set broadband internet access as the baseline for basic services. “Fixed broadband services should now come with the option of an unlimited data package, and mobile wireless technology should be available not only in homes and business, but also along the country’s major roads.”

The regulator’s target is 50Mbps for download over fixed connections and 10Mbps for upload. “And because broadband access at these targets is far from universal in Canada, [the CRTC] created a new C$750-million fund to support projects in areas that cannot meet, or maybe should I say: have not yet met, the new service levels.”

But he warned that “thinking in government and indeed in industry … is still flawed. It’s focused all too much on traditional divisions between broadcasting and telecommunications. On the status quo as an operating principle.”

He drew an analogy with the move from horse-drawn boats to steam power on England’s 19th century canals, while boat companies missed the arrival of railways. “I urge you: stop fussing over your canal boats. … The status quo cannot continue to be your operating principle.”

Start thinking about broadband, he told his audience – mainly of broadcasters. “Super highways are today’s reality.” Blais will not stay in the telecoms and media industry after Saturday. He is expected to return to his previous work in Canada’s Treasury Board.

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