In yet another of a long string of missed opportunities and short-sighted half measures, the CRTC has announced its regulatory solution for Canada's chronic cell phone market debacle. In adopting a regime that replicates, rather than overcomes, the most problematic features of Canada’s mobile landscape, the Commission’s regulatory solution offers slim hopes for Canada’s cell phone market.
As anyone with a phone plan is aware, world-high mobile prices have plagued Canadians for years. Yet Canada’s dominant national providers (TELUS, Bell and Rogers) have persistently denied this reality through lobbying efforts, regulatory filings, and even active misdirection. It is therefore encouraging that the CRTC’s recent decision finally and definitively confirms the nature and scope of Canada’s pricing woes.
The decision also correctly identifies several endemic problems in mobile competition that have caused this state of affairs: market entry is difficult, as upfront costs are high, spectrum is inherently limited, and dominant providers enjoy a substantial head start. As a result of these conditions, several stuttering attempts over the years to instill price discipline from new competitors have failed to make any meaningful headway into the national providers’ dominant market presence and globally high revenues. In response, the Commission adopts a two-tiered regime. First, in an attempt to provide more competition, it obligates dominant providers to let competitors operate 'virtually', without the need to build their own networks (the MVNO mandate). Second, to provide some relief for Canadians who simply cannot afford mobile data connectivity, dominant providers will be obligated to offer lower cost plans.
Each component promises, in theory, to address long-standing problems in Canada's cell phone landscape, but both fall short in the implementation. The MVNO regime is crafted narrowly, and is only available to a small number of existing comptitors. The low-cost plans imposed by the CRTC will help some customers in some regions, but mostly replicate plans already offered by some regional competitors, and do so on outdated 3G technology.
Cross-posted & paired with a post by Erin Knight at OpenMedia.ca. Image Source: Georg Arthur Pfleuger, @knurpselknie, "Facetime between mother and son", Unsplash, June 20, 2020
