On Monday, the Canadian Radio-television and Telecommunications Commission (CRTC) decided that Québecor’s proposed rates to access Rogers’ network were fairer than what Rogers had proposed, and ordered the two telcos to enter into an MVNO (mobile virtual network operator) access agreement consistent with Québecor’s offer.
“Today’s decision is another step forward in facilitating more choice in cellphone services while also ensuring investment in high-quality networks,” said the CRTC’s chairperson, Vicky Eatrides, in a statement. “We will continue to move quickly to provide certainty to companies and to allow for greater competition for Canadians.”
The CRTC set out an initial policy in 2021, allowing regional cell phone providers to compete as MVNOs across Canada. Under this policy, large cell phone companies must share their networks with competitors who are able to serve in areas that incumbent carriers (Bell, Rogers, Sasktel, and Telus) do not operate.
The Commission then established, earlier this year, that regional providers will have until Aug. 7 to negotiate MVNO access agreements with incumbent carriers. If they cannot come to an agreement, they can ask the CRTC to set the rate through a process known as final offer arbitration (FOA), wherein each company submits its proposed rate.
Rogers and Québecor applied to the CRTC for FOA in April, as they had been unable to agree upon voice and data rates. As part of the sale of Freedom Mobile to Québecor, the parties did already agree on wholesale MVNO service, as well as text messaging rates.
Shortly after the CRTC accepted the parties’ FOA request, they indicated that they had since reached an agreement on rates for voice, leaving only rates for data to be resolved.
To determine which company had the best offer, the CRTC looked at the affordability of the rates, whether they enhanced competition and thirdly, whether the rates fostered increased reliance on market forces.
The CRTC ruled, “Either offer could potentially contribute to rendering more affordable telecommunications services. However, Québecor’s offer will enable it to more meaningfully compete in today’s retail market and provide it with the ability to effectively respond to competitive offerings by larger incumbent carriers in the evolving retail market over the short period of its agreement with Rogers.”
It added that Québecor’s rates “maintain the ability and incentives for both parties to invest while providing it with the ability to expand into new geographic areas and grant it more pricing flexibility to better discipline rates in the retail market for the benefit of all end-users.”
The CRTC also determined that siding with Québecor will not have any impact on Rogers’ ability or incentive to invest in its wireless network.
A letter dated Jul. 13 that was posted on the CRTC’s website shows that Québecor has also requested FOA with Bell on MVNO access rates, which the Commission has accepted.