The Canadian wireless sector was hit by a shock yesterday as the three major new entrants – Wind Mobile, Public Mobile, and Mobilicity – announced that they were withdrawing from the Canadian Wireless Telecommunications Association. The companies argued that the CWTA has shown consistent bias in favour of Bell, Telus, and Rogers, the three incumbent providers. All three used strong language to emphasize their frustration with the CWTA, speaking of a “blatant disregard” for new entrants and failures to honour promises of fair representation.
The move is a major blow to the CWTA, which has long promoted itself as the voice of the industry. For example, during the recent CRTC consumer wireless code hearing, it opened by stating:
CWTA represents virtually all of the major companies in Canada’s wireless telecommunications ecosystem. Our members include wireless service providers, handset manufacturers, builders of network, infrastructure and numerous other companies that develop and produce products and services for the industry and for consumers.
No longer. So why the change?
Canadians are frustrated by the manner in which the control that Bell Mobility, TELUS and Rogers (collectively the â€œIncumbentsâ€) exercise in the wireless services market is exerted. The Incumbents, having created the deplorable consumer conditions in the marketplace which has forced some Provinces to step in and provide a basic level of consumer protection, are seeking to use this Proceeding as a tool to stop these legislative initiatives.
The delay, dilute or defeat strategy has been evident for years. Before the 2008 spectrum set-aside that opened the door to new competitors, the CWTA argued consistently against a set-aside, claiming that “the Canadian wireless market has been competitive from the outset.” Once new competitors entered the market, the CWTA focused on delaying, diluting or defeating consumer wireless protections. It argued against them at the provincial level and recommended delays to the implementation of the forthcoming CRTC code (along with support for three year contracts, no intervention on unlocking phones, and other anti-consumer positions).
The opposition to consumer protections placed the CWTA in direct conflict with the new entrants. In 2011, Mobilicity openly opposed the CWTA, stating:
We are exceptionally disappointed with the CWTA’s lack of foresight in continuing to act only in the interests of the Big Three wireless oligopoly. As members of the CWTA, we repeatedly voiced our opposition to its submission to no avail.
As part of the CRTC’s consumer wireless code hearing, Wind Mobile’s reply in December to the consumer wireless code started with the following:
At the outset, for the sake of clarity, WIND Mobile would like to highlight that our reply comments, which unsurprisingly differ from some of the positions taken by the dominant incumbent wireless service providers (Bell, Rogers, and TELUS (“BRT”)), also sometimes differ materially from the positions taken by the Canadian Wireless Telecommunications Association (“CWTA”) in this proceeding and most notably in its reply comments filed today. The CWTA has elected to take certain positions over the express objections of WIND Mobile (on the basis that such positions are not “industry positions” but rather those of a BRT-dominated CWTA board). Accordingly, without needing to single out positions taken by the CWTA which align with those of WIND Mobile, WIND Mobile simply states that WIND Mobile does not support the CWTA submission and these reply comments alone set forth our views on these matters.
The company offered the following comments on three-year contracts at the CRTC hearing itself:
the primary thing we want to speak to today in that regard is three-year service contracts. Now, the Big Three have claimed that consumers love them, and that we can’t take away such an adored option. This is unfortunately also the position also being advocated by the CWTA. In this regard I have to stress and they knew going in that I would stress that the position that they are advocating is not the position of the industry. It’s not the position of WIND Mobile and we’re a member of the CWTA and we’re in the industry.
Viewed in this light, the only surprising thing about the decision to abandon the CWTA is not why, but rather what took so long. As for next steps, the new entrants should move swiftly to establish the CCWTA – the Canadian Competitive Wireless Telecommunications Association. Such a move would provide a powerful alternative voice to the CWTA and ensure that both the government and the CRTC recognize that there are deep divisions within the industry with many legitimately concerned about the state of competitiveness of the Canadian wireless market.