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Does CRTC ruling on MVNOs mean bad news for mobile subscribers?

Does CRTC ruling on MVNOs mean bad news for mobile subscribers? 

The Radio-television and Telecommunications Commission (CRTC) yesterday denied an appeal from small Internet providers that the regulator mandate so-called Mobile Virtual Network Operators (MVNO).

The Canadian Network Operators (CNOC), an organization made up of some 30 small Internet providers like Teksavvy and Distributel, argue that MVNOs would provide consumers with a cheaper alternative to the services offered by larger mobile operators such as Bell, Telus, and Rogers. Under the proposed scheme, MVNO would rent the networks of larger telecom operators at set rates. If they are able to gain network access at wholesale prices, MVNOs will be able to offer consumers more affordable mobile rates.

Last year, the CRTC ruled on the issue in favour of large carriers who argued that having third-party carrier piggyback on their networks would undermine the case for the construction of new infrastructure.

This week, the CRTC said it did not err in its previous decision that and MVNO set-up would be a disincentive for the likes of Bell, Telus, and Rogers that have built up their networks at a considerable cost over the years.

The regulator, however, said that small operators can still negotiate MVNO deals on their own if they want to.

ITinCanada contacted Bell, Telus and Rogers for comment but only Rogers has responded.

“We are pleased the CRTC’s decision stands,” said Jennifer Kett, spokesperson for Rogers. “We think the decision strikes a balance by encouraging both additional competition and continued investment in building networks.”

“Consumers want a wide variety of choice but they also want top speeds and reliable service – we need to keep investing in our networks or we’ll fall behind other countries,” she said.

“Today’s decision is bad news for any Canadian who owns a cellphone,” according to Josh Tabish of OpenMedia, a Canadian non-profit organization focused on supporting an innovative communication system in the country based on open access, choice, and diversity.

“In effect, this amounts to a licensing for price-gouging, as our telecom giants can continue to block new providers and charge Canadians exorbitant prices,” Tabish said in his blog yesterday. “This is especially true now that Canada’s last independent affordable provider, Wind, is being acquired by Shaw.”

Canadian mobile customers on average pay around US$45/month for wireless service.

That’s almost double the $25 average monthly fee paid by consumers in 22 developed nations, according to a report by the Bank of America Merrill Lynch.

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