On April 15, 2021, the Canadian Radio-television and Telecommunications Commission (CRTC) issued a decision titled, Review of mobile wireless services, Telecom Regulatory Policy CRTC 2021-130 (the MVNO decision). Whether good or not is up for debate, but the intention was to provide a path for new entrant spectrum licensees to offer retail mobile wireless services to consumers across Canada in areas where they held spectrum while building out their own facilities for a period of time. The CRTC then mandated mobile virtual network operator access for a period of 7 years in order to accomplish this.
We know this because the decision says so. For example, the CRTC says:
The purpose of the mandated facilities-based wholesale MVNO access service is to accelerate the sustainable competitive discipline that regional wireless carriers have brought to the market by assisting them in overcoming the barriers they face to expanding their networks to new areas where they have spectrum but have not yet built infrastructure.
This was a common understanding of what the proceeding was about. It was to consider on what basis and for how long competitors or prospective competitors could have access to the networks of the national wireless carriers and certain regional incumbents. Again, it certainly seems to have been the CRTC's understanding:
...the Commission considers that investment in spectrum is sufficiently demonstrative of a wireless carrier’s commitment to maintaining and expanding its operations to make it eligible for access.
In other words, the CRTC was, and may still be, of the view that by simply acquiring spectrum, a mobile wireless aspirant would actually want and need to put that spectrum to use in offering a service to Canadians. However laudable that view was, it ignored the many examples in the past of spectrum being acquired, left undeployed and then subsequently transferred at a significant profit.
The Commissioner of Competition certainly was of the view that the eligible carriers would want to use this temporary mandated access to actually expand their own networks. The Commissioner is quoted in the decision:
...mandated facilities-based wholesale MVNO access should be a temporary measure in place only as long as required for regional wireless carriers to establish themselves using their own RANs, in order to encourage continued investment and dissuade them from operating as MVNOs indefinitely.
As is readily apparent from the quotation, the Commissioner expected the eligible carriers to deploy their own radio access networks (RAN) and not simply operate as MVNOs indefinitely reselling the networks and services of the wireless incumbents. To this end, while the CRTC decided not to impose investment targets, it did impose an annual reporting requirement on the eligible carriers. They are annually to provide information on tower and site deployments over the course of the year, a list of new communities they are serving, how many customers they have acquired, and a description of their deployment or expansion plans in the upcoming year.
The CRTC did not set its own deployment requirements however, but did vaguely deflect responsibility to Innovation, Science and Economic Development (ISED) and the deployment requirements that are inserted as conditions in every spectrum license. So, while it was clearly an expectation that eligible carriers would deploy their own RANs, expand their own networks and not operate as MVNOs indefinitely, it will be interesting to see if that expectation is fulfilled in practice.
The Globe and Mail may have touched on this in an October 11, 2024 article titled, "Friday's analyst upgrades and downgrades". According to the article, Desjardin Securities analyst Jerome Dubreuil noted that during a recent industry conference, Cogeco CEO Frédéric Perron indicated that CCA does not need its spectrum assets to operate its wireless business in Canada and added that its current portfolio could be worth $2-billion, up from the $600-million the company initially paid. As a consequence of this, M. Dubreuil was pricing into the stock forecast a transfer or subordination of Cogeco's spectrum licences at some point in the future it would seem.
This all leads to a great deal of confusion. Pretty much everyone anticipated that the CRTC's MVNO framework would require some sustained level of investment in an eligible carrier's own network in order to be sustainable and in order to continue to have access to the framework. In August of 2024, Cogeco indicated it had concluded a national MVNO agreement with a national carrier as well as a services agreement with Eastlink. It described the arrangements as "capital-light". It is difficult to square M. Perron's comments at an industry conference as reported by M. Dubreuil with the CRTC's MVNO decision. Do MVNOs need to actively deploy spectrum and networks anywhere within the temporary 7-year framework, or are eligible carriers able to monetize their spectrum assets through transfer or lease? Time will tell I guess and be sure to watch this space for how the eligible carriers are reporting they are complying with the MVNO decision.
コメント