As noted in an earlier post, on May 5, 2015 the CRTC established a new regulatory framework for wholesale mobile wireless services (Telecom Regulatory Policy CRTC 2015-177). The headline elements focused on rates for wholesale roaming service. At the same time the CRTC cracked open the door for development of Full MVNOs in Canada.
There were two less attention-grabbing but important aspects of mobile regulation addressed: whether the large national wireless carriers have market power with respect to towers and antenna sites and the question of whether wholesale rates should be different in urban vs. rural areas.*
Towers and Antenna Sites
Here the issues were first to determine if national wireless carriers have market power with respect to tower and site sharing, and second, to assess if any new regulatory oversight is required as a consequence.
In considering the market power issue, the Commission found that generalizing the question was essentially impossible since each tower or antenna site represents a unique case for possible coverage, which would vary based on the needs of the wireless carrier seeking access to the site.
On that basis, the Commission determined that it could not really make a determination on market power and essentiality of tower and site sharing, but that its existing powers of oversight allow it to intervene and settle disputes as required for specific cases (paragraph 182). A key element of this is that it means that disputes concerning towers and sites will now be addressed through staff mediation, presumably a less costly and faster process than the current Industry Canada arbitration procedures.
Urban vs. Rural rates
One issue considered in the proceeding was whether wholesale rates should vary by geographic area – i.e. that the rate would reflect differences in the underlying cost of network deployment in urban areas versus rural areas.
While certainly network costs vary with geographic and other considerations (density, obstructions, etc.), mobile carriers do not make such a distinction in their retail rates, which are typically uniform across a large operating area. The CRTC agreed (paragraph 132) with this point and also decided (paragraph 137) that it would add too much complexity for the regulatory costing exercise required in tariffing processes as well as for billing.
In requiring the Big3 operators – Bell, Rogers, TELUS – to file tariffs for wholesale roaming rates, the Commission also ruled that these rates must be uniform across each carrier’s respective operating territory. Tariff filings are due November 4, 2015. Stay tuned.
* NOTE: LYA prepared expert evidence which was submitted to the Commission in this proceeding on both of these topics as well as on the question of development of Full MVNOs in Canada. Johanne Lemay of LYA appeared as an expert witness at the Public Hearing held in September 2014.