Canada raps Bell's knuckles on pole access, but commitment to competition still in question

Canada’s telecom regulator has ruled in favour of Videotron in a complaint against incumbent Bell, which is adjudged to have unfairly blocked access to its fixed infrastructure.

The altnet is celebrating, and with the ruling coming just one day after the publication of new rules on MVNO access, things should be looking bright for smaller telcos in Canada.

However, all is not as it seems. Many claim that the regulator has not gone far enough with its new wholesale mobile network access rules and that its decision will simply serve to maintain the status quo in a market that is still dominated by the three national operators.

But first the Videotron decision. The Canadian Radio-television and Telecommunications Commission (CRTC) on Friday upheld a complaint from Videotron that essence stated that Bell Canada has acted unlawfully in blocking access to its poles. Videotron’s claim centred around Bell dragging its heels in approving access to its support structures, or poles, and creating artificial hurdles to prevent Videotron gaining access in a timely manner.

When it first submitted the complaint in September, Videotron claimed that the incumbent had taken as much as two and a half years to process a request to access a single pole. It did not share how common an occurrence this was – for all we know, that length of delay could have happened just once – but its point is pretty clear. Videotron submitted as many as 1,400 pole access requests in 2019, so any delays in the approvals process would have a significant effect on its speed of rollout of high-speed Internet services.

The CRTC was inclined to agree and basically ordered Bell to crack on and do what needs to be done to open up access to its poles. It is also considering slapping the telco with a fine.

“The Commission’s preliminary view is that an administrative monetary penalty (AMP) should be imposed on Bell Canada to deter future violations and promote compliance with regulatory requirements,” the CRTC said, in a statement. It will make a final decision on whether to issue a fine – and if so, how much – at a later date.

Videotron didn’t have things all its own way. The regulator was clear that it had approved the telco’s requests only in part, noting that some of its issues will be addressed in depth as part of a separate proceeding on the regulatory structure around access to poles.

Nonetheless, Videotron is claiming victory. “The CRTC found that the preference Bell Canada has granted itself and the disadvantage it has imposed on Videotron are undue and unreasonable. The Commission further found that Bell’s arguments to justify the delays were not valid but rather consistent with Bell’s practice of giving itself more efficient access to build out its own network,” it said, in a statement.

“Clearly this anti-competitive behaviour, which has been denounced by Videotron and many other industry stakeholders, must stop,” it added.

Coupled with Thursday’s announcement that the CRTC has taken a number of new measures to boost competition in the mobile space, you could be forgiven for thinking that competition is opening up across the board in Canada. But it’s not quite that simple.

The regulator’s measures include a requirement on the big three to implement seamless roaming and to offer affordable and occasional use plans to meet the needs of seniors and low earners. However, its headline rule change looks at improving access to the market leaders’ networks for smaller players.

The new rules require the big three – Bell Mobility, Rogers and Telus – to grant wholesale access to their mobile networks to mobile virtual network operators (MVNOs) under regulated terms and conditions. (There are slightly different rules for Saskatchewan – where SaskTel is a dominant player – and the three territories.) However, the term MVNO is a little misleading in this case; the CRTC is actually referring to companies that already have their own spectrum allocations and regional networks, rather than to pure MVNOs that exclusively piggyback on others’ networks… and tend to boost market competition and drive down prices.

Altnet industry body the Competitive Network Operators of Canada (CNOC) highlighted comments from its chairman Matt Stein published in the Financial Post, in which he expressed his disappointment in the ruling. “The CRTC had an opportunity and made the smallest possible step when what they should have done, what Canadians deserved, was a full, wholesale MVNO regime,” he told the paper.

Competition has long been an issue in Canada and it seems that the regulator is still taking baby steps in the right direction, as far as consumers are concerned, at least. Nonetheless, the CRTC is in a self-congratulatory mood:

“While there are encouraging signs that prices are trending downwards, we need to accelerate competition and more affordable options for Canadians. Equally important is ensuring that wireless providers continue to invest in their current networks and build out their 5G networks. The competitive model we are introducing today will result in greater choice and cheaper mobile wireless services for Canadians, who rely on their smartphones now more than ever,” said Ian Scott, chairman and CEO of the CRTC.

It’s the classic balancing investment with competition angle. Naturally, telcos need some regulatory certainty to allow them to invest in their networks, but in Canada the scales are still firmly tipped in favour of the network builders.