Competition Bureau argues for ‘facilities-based’ MVNO model to improve wireless market

The CRTC is determining whether MVNOs should have mandated access to the Big Three's networks

The Competition Bureau has argued for a “facilities-based” MVNO model during the CRTC’s public hearing on the mobile wireless market.

A facilities-based model would benefit carriers such as Freedom Mobile and Vidéotron, which have limited networks. Companies that are resellers, like PC Mobile, are not considered facilities-based.

As part of the public hearings, the commission is going to consider whether MVNOs (mobile virtual network operators) should have mandated access to some or all wireless service providers’ networks. MVNOs are providers that don’t operate their own spectrum network and instead purchase access to existing networks.

The bureau says its facilities-based model is designed to “encourage the expansion and growth of facilities-based wireless disruptors, something that we have seen drives competition and improves price and choice for Canadians,” the bureau said.

It also says that a facilities-focused model would deliver more effective competition from independent self-sustaining competitors, and is more likely to provide lower prices and greater choice.

The bureau found that regional facilities-based wireless disruptors drive significant price competition where they operate by challenging the Big Three’s market power.

The Big Three “significantly lower their prices when faced with increased competition from regional facilities-based wireless disruptors, such as Vidéotron and Freedom Mobile,” the bureau said during the hearings.

Further, the bureau proposes a policy that would benefit carriers that have a good track record to build out networks in areas that they don’t operate but own spectrum.

An example of this would be Freedom Mobile, which owns spectrum and doesn’t operate in areas like Sarnia, Ontario. The bureau says that granting Freedom Mobile temporary access to the Big Three’s networks would allow Freedom to grow and become self-reliant in these types of areas.

CRTC chairperson Ian Scott said that the proposed model is complicated and might be challenging to enforce.