Earlier this year, the Liberal government granted approval for the merger between BCE and MTS, eroding the competitive wireless market in Manitoba. In response, I argued in the Globe and Mail:
The Conservative government was criticized for failing to fix Canada’s uncompetitive wireless market, but at least it recognized the problem and did not shy away from challenging the Big Three. By contrast, Mr. Bains was faced with a sure thing – higher wireless prices for consumers and a less competitive, innovative marketplace – and blinked. Unless there are some new pro-competitive policies on wireless yet to come, the approval of the BCE-MTS merger guarantees that the government’s innovation strategy will start with a weak foundation.
It turns out, there was more to come. This week, Innovation, Science and Economic Development Minister Navdeep Bains put the wireless market back in the spotlight with a speech that left little doubt that the Liberal government has reached the same conclusion as its predecessor, namely that the Canadian wireless market continues to be marked by insufficient competition leading to high prices, low adoption rates, and a lack of affordability for consumers with low household income.
The government’s first step toward addressing the issue is an order-in-council requiring the CRTC to review a recent decision involving how regional and smaller wireless companies access wholesale roaming services from larger providers. While much of the attention has focused on the potential impact of varying that decision, the far more important takeaways come from the language found in the order, which presumably reflect the views of the government.
The government leaves no doubt that it believes the current market offers too little choice, leading to high prices and low adoption rates for wireless services (particularly for low-income Canadians). The order states:
Whereas Canadians continue to pay high rates for mobile wireless telecommunications services;
Whereas Canada has among the lowest adoption rates for mobile wireless telecommunications services among industrialized countries;
Whereas Canadians with low household income in particular face challenges related to the affordability of telecommunications services;
The government not only makes its views on the state of the wireless market clear, it also points to its preferred solution: new competitors such as MVNOs or mobile virtual network operators. MVNOs offer the potential to bring new competitors in the market and while the CRTC stopped short of creating a regulatory framework to support their entry, the government clearly views it as part of the solution. The order also states:
Whereas the Governor in Council recognizes that the Commission has previously determined that it would not be appropriate to mandate wireless carriers to provide Mobile Virtual Network Operators with wholesale access to their networks, as doing so could negatively impact investment in wireless network infrastructure;
Whereas the Governor in Council considers that innovative business models and technological solutions can result in more meaningful choices for Canadian consumers, especially those with low incomes who are not well served by current market offerings
The order asks the CRTC to reconsider whether the benefits of new, non-traditional service providers (including providers that emphasize WiFi connectivity) outweigh concerns with respect to network investment (which the government believes can be managed with appropriate regulatory conditions).
The Bains speech sent other signals to the CRTC such as the need to ban phone unlock fees, but at its heart, it provides the foundation for future wireless policies. The Liberal government may have approved the Bell-MTS merger, but it has signalled that it recognizes that Canadians pay high prices for wireless services relative to other developed countries and that further regulatory measures are needed to foster a more competitive marketplace.