Page 122 - SAMENA Trends - May-June 2022

REGULATORY & POLICY UPDATES SAMENA TRENDS

Ottawa Sets New CRTC Telecom Policy Directives to Promote Competition

and Affordability

require large telecoms to provide their competitors with access
to faster speeds. The policy does not specify the rates that the
government would like the CRTC to implement, leaving it up to the
regulator to make that decision. (Large telecom companies are
required to sell broadband network access to third-party operators,
which then sell internet services to their own customers. Matt Stein,
who is CEO of Distributel Communications Ltd. and chairman of
the Canadian Network Operators Consortium (CNOC), an industry
group for independent ISPs, said the decision provides clarity for
regulators. “This is not what we asked for, but this is good, too,”
Mr. Stein said, adding that he’s disappointed that the government
opted not to overturn the CRTC wholesale rates decision, but is
encouraged by the directive’s emphasis on consumers. “It’s a really
good start and hopefully they do bring it into force,” Mr. Stein said.
The federal government is also instructing the CRTC to improve
Ottawa says it will direct the federal telecom regulator to emphasize its regime governing wireless network access for eligible regional
competition and affordability in the internet and mobile phone competitors “as necessary.” In April, 2021, after a lengthy review
markets and to improve its wholesale network access regimes. The of the country’s wireless industry, the telecom regulator ruled
new policy directive, announced Thursday, aims to eliminate some that Rogers, BCE Inc., Telus Corp. and SaskTel must sell wireless
industry confusion by replacing two previous policy directions that network access to regional competitors who commit to building
some saw as conflicting with one another. The first, introduced in their own networks. However, the CRTC stopped short of opening
2006 by the then-Conservative government, emphasized relying on up national wireless networks to competitors without their own
market forces and encouraging network investments by telecoms. infrastructure, known in the industry as mobile virtual network
The second, which was put in place in 2019 by the Liberal operators, or MVNOs. Still, the government is prepared to move to
government but did not replace the earlier directive, instructed the a full MVNO model, if needed, to support competition in the sector,
regulator to emphasize affordability, competition and consumer the department of innovation, science and economic development
rights. The new directive seeks to promote competition while said Thursday in a backgrounder document. Canadians have until
also encouraging investments in networks in a sector that has July 19 to submit comments on the proposed new directive, which
attracted criticism from government and consumer advocates for the government aims to finalize by the fall. The proposed new
having high prices. The announcement comes at a time when the directive also instructs the telecom regulator not to phase out the
government is in the midst of reviewing Rogers Communications current wholesale broadband regime when it introduces the new
Inc.’s proposed $26-billion takeover of Shaw Communications model it is developing. Under the current “aggregated” system,
Inc. Critics argue that the merger of the country’s two largest the large telecoms are required to sell to third-party operators
cable systems would reduce competition and lead to higher services which bundle access to the “last mile” – the connection
prices for consumers. The federal government also opted not to into customers’ homes – along with transport of data to and
overturn a controversial ruling by the Canadian Radio-television from the broader internet. Under the new “disaggregated model,”
and Telecommunications Commission, which in 2021 reversed competitors will gain access only to the last mile, and then will be
its 2019 decision to lower the rates that Canada’s large phone able to either provide their own data transport or lease it from other
and cable companies can charge smaller internet providers for service providers. The new model is meant to encourage network
access to their broadband networks. The regulator has said it investment. The government said it has concerns that phasing
found significant errors that cast doubt on the correctness of that out the aggregated model could harm competition. Ottawa is also
decision and opted to largely maintain the interim rates that have instructing the CRTC to strengthen consumer rights by introducing
been in place since 2016. “The wholesale rates decision made by new measures to address what it calls “unacceptable sales
the CRTC in 2021 is an attempt to correct errors made in 2019, and practices,” overhauling the governance of the telecom ombudsman
it makes permanent the rates that have been in force since 2016. to give consumers a more prominent role, and implementing a
The decision provides stability, and the government has determined number of other changes. Speeding up the deployment of internet
that it will not alter this decision,” François-Philippe Champagne, access, for instance by making it easier for telecoms to access
Minister of Innovation, Science and Industry, said in a statement. infrastructure such as telephone poles, is another priority that
“That is why the new policy direction would require the CRTC to the government has identified. Anthony Lacavera, chairman of
support a wholesale Internet regime that is sustainable, effective Globalive Capital, said that “when implemented and enforced, this
and fair, because wholesale broadband is a proven regulatory tool new policy direction will help ensure true independent competition
for increasing retail competition in the Internet service market,” Mr. in wireless and internet services.” Globalive Capital is one of the
Champagne added. The proposed new policy directs the CRTC to potential bidders circling around Shaw’s Freedom Mobile, which is
improve wholesale broadband rates in its future decisions and to up for sale as part of Rogers’ $26-billion takeover of Shaw.
122 MAY-JUNE 2022