Eight months after the Canadian Radio-television and Telecommunication Commission (CRTC) released its Telecom Review Policy TRP 2021-130 – Review of mobile wireless services and the conclusion of the 3500MHz auction, the Canadian competitive landscape is still unsettled

Networks, Economics and Strategy (NE&S) > Key Developments > Eight months after the Canadian Radio-television and Telecommunication Commission (CRTC) released its Telecom Review Policy TRP 2021-130 – Review of mobile wireless services and the conclusion of the 3500MHz auction, the Canadian competitive landscape is still unsettled

15 December 2021

The CRTC – the Canadian commercial regulator for broadcasting and telecommunications matters, released its Telecom Review Policy (TRP) 2021-130 on April 15th, 2021, to enable access by regional facility-based service providers to the incumbents’ radio access network (RAN) under a tariffed mobile virtual network operators (MVNO) regime. Such a regime would favour the expansion of regional players, thus impacting the bottom lines of both national and regional players as well as potentially, valuation of spectrum.

According to the eligibility requirements of the new tariffed MVNO regime, the service provider must be facilities-based and possess ISED spectrum licences at the Tier 4 level or higher. The CTRC’s regime also has a 7-year sunset clause by which date, the service providers must have either built out and/or negotiated MVNO access on commercial terms.

CRTC’s announcement occurred just 9 days after the deadline for receipt of applications to participate in the Canadian 3500 MHz auction. While the timing of the announcement might have been a coincidence, it was the prudent course of action given the release of the TRP prior to the auction deadline could have attracted speculation – which in turn, might have impacted the valuation of 3500 spectrum by bidders and/or created a stir among small industry players regarding eligibility for the tariffed MVNO regime.

We note that ISED planned its 3500 MHz auction based on licences at the Tier 4 level. Even though interested parties had already registered for participation in the 3500 auction when the CRTC released the news, some regional industry players – large and small, battled fiercely to get their share of the pie during the auction. Thus, Videotron, Cogeco and Sogetel surprised many with the level of their auction spending – as attested by the provisional results published by ISED on July 29th, 2021.Videotron also somewhat surprised the industry by acquiring 175 of their 294 new spectrum blocks outside of Quebec, perhaps to position itself for the purchase of Freedom Mobile’ assets.

Shaw and Rogers jointly announced an agreement for Rogers to purchase all of Shaw’s issued and outstanding Class A Shares and Class B Shares for $26 B on March 15th, 2021, just 3 weeks before the auction application deadline. As the matter is under review, there is a possibility that the Competition Bureau and/or the CRTC could require Rogers to divest all or a portion of Shaw’s (Freedom) wireless assets – as a condition of approval of the merger.

Shaw was expected to qualify as a set aside eligible bidder in ISED’s June 2021 3500 auction – which given Shaw’s financial resources, would have positioned it to capture a major portion of relatively inexpensive set aside spectrum. The announcement immediately generated controversy both regarding the integrity of the auction and industry concentration. Auction integrity issues were based on the potential for Rogers to win inexpensive set aside spectrum in the scenario that Shaw did participate. Observers also questioned the wisdom of the deal itself which would further increase industry concentration. Shaw’s April 7, 2021 announcement that would not participate in the auction, not only resolved the auction integrity issue but also opened the door for Videotron – the second largest regional to win significant set aside spectrum in key markets in Ontario and the West in addition to its Quebec base.

CRTC’s April 15th TRP directed each of the 3 national wireless carriers plus SaskTel – as the regional incumbent, to file tariff pages for approval within 90 days, containing proposed terms and conditions for a 7-year, facilities-based wholesale MVNO access service regime. Furthermore, the incumbents were directed to use their existing wholesale roaming tariffs – with necessary modifications, as the basis for the proposed MVNO tariffs to enable permanent RAN access for eligible entities.

The quartet came back with the requested tariff pages on July 14th, as directed, and interested parties had 30 days to comment, before an extension to September 7th was granted by the Commission.

A review of the tariffs proposed by the quartet of 3 national (Bell, Rogers, TELUS), and 1 regional (SaskTel) incumbents, clearly indicates that the quartet either directly opposed the implementation of CRTC’s new MVNO regime or proposed clauses that would complicate its implementation and limit its effectiveness.  Thus, the incumbents proposed variously:

  • Technology restrictions limiting core network interconnections to 4G LTE – even though the Commission had determined that 5G was not to be excluded,
  • Stringent traffic forecast process with punitive damages based on forecast accuracy (inaccuracy),
  • Restrictions on services and devices and even on customer growth of the MVNO towards the end of the 7-year window.

The Commission’s TRP also directed the 3 National incumbents to modify their wholesale roaming tariff to include seamless roaming provisions – which would enable regional carriers to handoff to incumbent national networks as users reach the geographic limits of their regional coverage.  Once again, national carriers have resisted the CRTC decision in their tariff submissions, by putting the emphasis on the apparent complexity of the technical solutions required.

More importantly, the Commission did not seem to realise that the wholesale roaming tariffs and the MVNO tariffs are mutually exclusive as they attempted to impose seamless roaming. A subscriber of a regional carrier is located either inside or outside the eligibility zone of the MVNO access tariff while using the service. If outside, the subscriber is located within the wholesale roaming area. Regional carriers will need the seamless roaming functionality within the MVNO eligibility area as well, not just outside of it in the wholesale roaming area.  For the tariffed MVNO regime to be both effective and to the benefit of the Canadian consumer, we believe the Commission should have directed the quartet to include matching seamless roaming provisions in both the MVNO tariff and the wholesale roaming tariff.

Interested parties filed comments on tariffs with the CRTC by September 7th and the incumbents and SaskTel had 10 days to file Reply Comments – subsequently extended to October 7th.  Incumbents did not change the substance of their initial positions thus, leaving the Commission to decide the reasonableness of their proposed modifications to the tariffed MVNO regime. CRTC’s decision on MVNO tariffs is pending.

Overall, the developments described above indicate the need for better coordination between the 2 regulators is necessary overall and specifically, to avoid unduly influencing auction prices. CRTC needs to harmonize the terms of the new tariffed MVNO with those of the existing roaming regime. Finally, incumbents’ proposals would unduly restrict the effective application of the tariffed MVNO regime.


Prepared by: Francois Picard, Stuart Jack

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