Big telcos not required to sell wholesale network access to tower-less rivals, CRTC says

TheCRTChas once again refused to mandate the big telcos sell wholesale access to their wireless networks to fledgling rivals without towers of their own, a decision critics call a blow for competition and for Canadians fed up with big cellphone bills.

At the request of Economic Development Minister Navdeep Bains, theregulatorspent months reviewing its rulingfrom last March that threatened to put Sugar Mobile out of business. On Thursday, the CRTC reaffirmed its decision that the discount Wi-Fi-based provider has no right to resell access to Rogers's network to keep its customers connected.

Sugar Mobile CEOSamerBishaycalled the decision "a big blow for Canadians once again."

"It just shows that we have a broken system," he said. "Something is broken and it needs fixing fast."

Launched in early 2016, Sugar Mobile appeared to have found a back door into the notoriously closed-off Canadian cellphone market.

Sugar's parent company, Ice Wireless, owns a mobile network in the North andhas reciprocalagreements allowing customers of the big Canadiantelecommunication companiesto roam on the Ice Wireless network in cities like Whitehorse, YellowknifeandInuvik.

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Through its Sugar Mobile brand, Ice offered a Canada-wide,Wi-Fi-basedmobile service, relying on those reciprocal agreements to provideits customers access to Rogers's 3G network outside of Ice Wireless territory.

Rogers complained that Sugar was essentially selling access to a network it didn't own, in violation of Rogers's roaming agreement with Ice Wireless.And in March 2017,theCRTCagreed, ordering Sugar off Rogers's network, all but shutting down the discount service provider.

Wi-Fi-firstmobile plans

Sugar Mobile's business model is actually quite common in the U.S. and Europe.

Such providers are known asWiFi-first mobile virtual network operators (MVNOs). They rely primarily on Wi-Fi and don't have a cellular network of their own. Instead, they lease network access at wholesale rates and then turn around and sell that access to customers at retail prices.

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The MVNO model is allowed in Canada, but as the CRTC ruling makes clear, it's up to the big telcos to decide if they want to sell wholesale access to their networks to upstarts looking to nudge their way into the market.

So far, they don't.

The advantages of the MVNOmodel are based on the increasing availability ofWi-Fiand the cost savings of not having to build and maintain a network. People in urban areasspend much of their timeinWi-Fizonesand the cost of keeping a cell tower engagedwith a customer's phoneis only incurred when itleavesWi-Fi range.

We saw prices come down for three days in December and we saw lines that lapped malls because that's how desperate we are for better choice and for better packages.- Laura Tribe, Open Media

Sugar Mobile had plans starting at $19per month.

Despite ruling against Sugar Mobile for a second time, the CRTC did say it would conduct a full review ofthe larger issue of wholesaleMVNOaccess to wireless networks starting sometime in the next year.

Theregulator also announced Bell Mobility, Rogers and Telus will have to provide low-cost, data-only wireless plans to all Canadians. Such plans would not include talk and text.

The three telcos must submit their proposed plans to the regulator by April 23.

Critics not happy

Internet law professor MichaelGeistsaidthe takeaway from theCRTCannouncement is clear: The big carriers win.

"Low cost data-only plans may assist some on affordability but won't address broader pricing concerns," the University of Ottawa professor tweeted. "In short, the Commission won't do much on wireless competition. Over to you @NavdeepSBains."

Laura Tribe ofOpen Media, a non-profit advocacy group, called theCRTC's ruling on MVNOs"incredibly frustrating."

"It's really hard to be told, 'Keep waiting and we'll try to get it right next time.'"

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She saidconsumersstruggling to pay their cellphone billswant more competition and more choice, not more consultation.

During a conference call with reporters, CRTCchair Ian Scott said wireless prices are falling thanks toincreased competition.

"Wireless rates are going down.More low-cost options are in place," he said."There is evidence that competition is intensifying.And if it doesn't intensify to an extent that's acceptable to the public and to the government, we'll be doing a fulsome review starting next year."

Tribe, however,isn't convinced the current level of competition is having a major impact.

"We saw prices come down for three days in December and we saw lines that lapped malls because that's how desperate we are for better choice and for better packages," she said, referringto aprice warinitiated by newer entrant Freedom Mobile, owned by Shaw.

"And just because the price can come down for a few days does not actually fix the [overall] problem."