OTTAWA – The final version of a new telecommunications policy directive first unveiled by the federal government in May last year is now in force.
Industry Minister Francois-Philippe Champagne said Monday that the government’s new directive to the Canadian Radio-television and Telecommunications Commission (CRTC) means the agency must create new rules to improve competition in the telecommunications industry.
“Under the Telecommunications Act, the CRTC is responsible for implementing policy direction and is required to take certain steps and adopt all of its future decisions in a uniform manner,” Champagne said in a statement.
“I am confident the CRTC will act on this important task, and I look forward to seeing direction in action soon.”
The directive repeals a 2006 policy direction that said the CRTC should rely on market forces in decision-making.
Instead, the federal government is now emphasizing consumer rights, affordability, competition and universal access.
The new directive will require the CRTC to take action to provide more timely and better wholesale internet rates. Too high wholesale rates discourage competition, but too low fixed rates discourages even the largest telecom providers from making costly wireless infrastructure upgrades.
The government is also directing CRTCs to reform their hybrid mobile virtual network operator (MVNO) model and says it is ready to move to a full MVNO model to support competition, if necessary.
MVNOs are wireless providers that purchase cellphone network service from large carriers at a wholesale rate and then sell access to customers at a more affordable rate.
Ottawa is also calling on the CRTC to address unacceptable sales practices and introduce new measures to improve clarity about service pricing and the ability for customers to cancel or change services. It also wants to see service providers implement mandatory broadband testing so Canadians understand what they’re paying for.
The direction also asks the CRTC to improve consumer protection in the event of a service outage. Last July, a major Rogers Communications network outage affected more than 12 million mobile and Internet customers across Canada.
Some of Canada’s independent telecommunications companies said last May that the federal government is relying too heavily on the country’s regulator to promote competition and make Internet and wireless services more affordable.
But some telecom analysts have said the new policy direction signals a shift in favor of Internet resellers and regional wireless operators in the medium term.
In a client note last May, RBC analyst Drew McReynolds said the outcome would not be “game-changing” for major companies such as BCE Inc., Rogers Communications Inc. and Telus Corp., but could be “directly negative” over time. There is a possibility. “For these big players.
Ottawa’s telecommunications policy directive comes into effect just days before a February 17 deadline set for a proposed $26 billion merger by Rogers Communications Inc and Shaw Communications Inc.
The deal still requires Champagne’s approval, although the minister has said he is not bound by the companies’ timelines. The deal has already received approval from the Competition Tribunal, a decision that was upheld by the Federal Court of Appeal last month.
On Monday, the non-profit advocacy organization OpenMedia said a new federal policy directive promising to increase competition in Canada’s telecommunications sector lacks teeth, without indicating what Champagne wants to do about the Rogers-Shaw merger.
“Today the government released long-overdue guidance to the CRTC, but Champagne’s promises will have little effect without concrete action,” Matt Hatfield, director of the OpenMedia campaign, said in a release.
“If Champagne greenlights that deal, it will reap the benefits of the new competition and then some.”
This report by The Canadian Press was first published on February 13, 2023.
canadian press
