Data on Tap, otherwise known as DOTmobile, says that it has appealed the CRTC’s recent Regulatory Policy – Review of Mobile Wireless Services to Cabinet.

Recall that the Telecom Act prescribes three channels of appeal for a CRTC decision: to Cabinet (the Governor in Council); to the Federal Court of Appeal; or, back to the CRTC itself.

A “petition” to Cabinet must be filed within 90 days of a CRTC Decision. The Commission’s policy was issued on April 15th, less than 3 weeks ago; Cabinet has a year from the date of the decision to respond.

The press release says:

“The CRTC decision misinterprets Canada’s wireless policy. Industry analysts, telecom experts, competitive regional providers and even the dominant carriers all recognise that this decision will not have any meaningful, immediate or nation-wide effect on the wireless market,” said Algis Akstinas, CEO of Data on Tap Inc. “It is not addressing the pain points that kicked off the Review of Mobile Wireless Services and were validated by the Commission and Competition Bureau Canada during the proceeding.”

Given that the CRTC’s model largely adopted the competitive framework proposed by the Competition Bureau, it is hard to understand the validity of this statement.

In its Application, DOTmobile asks Cabinet to:

1. Make wholesale access to dominant networks available to Full MVNOs by removing the requirements targeting regional MNOs:
• Remove all spectrum licensing requirements.
• Remove the seven-year limitation on mandated wholesale access.
• Remove the requirement to own and operate an existing radio-access network.
2. Set a maximum wholesale rate to allow Full MVNOs to offer plans that meet the affordable and occasional-use plan requirements identified by the CRTC:
• $0.0070 per voice minute (based on 500 average minutes of usage)
• $0.0010 per SMS message (based on 500 average minutes of usage)
• $0.0060 per MB of data (based on 3GB of average data usage)
• Wholesale cost for the $35/month 3GB plan would be $22.00, leaving a moderate 37% average retail margin to cover operating costs and investments.
3. Direct the CRTC to review maximum mandated wholesale rates every two years to determine if they allow for competitive retail pricing, based on a margin equal to the average reported wireless EBITDA margin of the dominant networks in the CRTC’s Communications Monitoring Report.

It is a hefty request with a degree of specificity that is extremely unusual to expect from Cabinet.

DOTmobile’s Application itself recognizes the close relationship between the CRTC’s Decision and the Competition Bureau’s proposed model. Recall that the Competition Bureau is an agency that reports to the Minister. As the CRTC observed, “The Commissioner [of Competition] suggested that, relative to facilities-based competitors, service-based MVNOs are inferior because, without any networks of their own, they must rely on network operators and the regulator to set the bounds in which they operate” and “proposed that the Commission [CRTC] adopt a narrowly focused, facilities-based MVNO access policy.”

It is worthwhile looking at a part of the introduction to the CRTC’s Policy Decision:

the Commission considers it necessary to apply certain targeted regulatory measures to ensure that the needs of Canadians are met, having regard to the policy objectives of the Telecommunications Act and both the 2006 and 2019 Policy Directions.

In considering its regulatory approach, the Commission must take care not to disrupt the competition that is already occurring, but instead foster an environment where this competition can grow and be sustainable over the long term.

I suspect the Minister will follow a similar approach, taking care not to disrupt the competition that is already occurring.

We’ll be following this file.

Speculating in spectrum can be extremely profitable as I was reminded last week. My Twitter timeline highlighted a couple articles about Canadian spectrum sales over the past few years.

One of the articles highlighted Videotron selling Shaw unused spectrum in Ontario, Alberta and BC in the 700 MHz band and 2500 MHz band for C$430M. Videotron acquired its 700 MHz spectrum in 2014 for C$233M and the 2500 MHz spectrum in 2015 for C$187M. So, on first glance, one might think the $430M sale in 2017 just covered the $420M total cost. But, the total cost included all of the spectrum Videotron kept for its own use in Quebec, so flipping the out-of-region spectrum resulted in getting Quebec for free.

The other tweet linked to a story about Videotron selling to Rogers some unused spectrum it was sitting on in Toronto. In that particular case, Videotron had acquired 10 MHz of AWS spectrum in the 2GHz band in Toronto in 2008 for C$96M, and sold it for C$184M nine years later, just a year before the original license expired.

These stories are insightful for some of the bidder qualifications that have been put in place for Canada’s upcoming 3500 MHz spectrum auction. To qualify to bid for spectrum in a particular area in the June 2021 auction, bidders must already be providing some kind of telecom services in the area. For greater precision, the auction will be conducted in Tier 4 geographic areas; there are 172 ‘localized’ geographic blocks in Canada using Tier 4 subdivisions. To qualify to bid for spectrum in any particular Tier 4 block, the bidder must already be providing a telecommunications service (such as internet, telephone, mobile, etc.) in the associated Tier 2 zone; there are 14 Tier 2 geographic blocks in Canada, generally one for each province except for Ontario and Quebec which have subdivisions.

Clearly, the consultation demonstrates there was a concern about spectrum squatting and trafficking. In the discussion about eligibility in the Licensing Framework, the Department wrote, “To promote optimal spectrum utilization and deployment, set-aside-eligible bidders must be actively providing commercial telecommunications services.” There are also specific deployment requirements set out as a condition of license, aiming to ensure spectrum is actually deployed, not hoarded.

Last week, I wrote about a recent Opensignal report that observed how Canada is falling behind its peers since the “full capabilities of 5G are best realized through the wider channel sizes in the new 5G bands”. The Policy and Licensing Framework acknowledges that “The development and deployment of 5th generation (5G) technologies will support Canada in becoming a global centre for innovation, and will position Canada at the forefront of digital development through the creation and strengthening of world-class wireless infrastructure. Beyond initial improvements to the speed and capacity of mobile broadband networks and services, 5G technologies are expected to transform services across all sectors of the economy including manufacturing, healthcare and transport.”

The 3500MHz spectrum is also important for rural broadband deployment since the mid-band frequencies provide a blend of coverage and capacity.

The upcoming auction was already delayed until June due to COVID, from its original December 2020 date. In the wake of the CRTC’s Wireless Review determination, some had called for the auction to be delayed in order to allow additional companies to decide to register to bid. Last week, Minister Champagne made it clear that the auction is moving ahead in June.

As you know, the deadline to submit an application to participate in the 3500 MHz auction was April 6, 2021. The auction’s timelines were made public in June 2020, and many applicants have now invested significant effort to apply despite the potential uncertainty surrounding the CRTC’s MVNO decision. The auction has also already been delayed by six months to allow providers to respond to COVID 19. Accordingly, we will not be reopening the auction application process at this time.

The June auction is hardly the last opportunity to acquire mid-band spectrum. It is critical for the auction to proceed without further delays, and for Canada to continue to make additional spectrum available – for deployment, not for speculation – in order to continue to support innovative new services and a seemingly insatiable thirst for wireless connectivity.

Nearly 15 years ago, I wrote a little piece called “4 degrees of impersonal communications”, describing the way we speak to one another in different settings: in person, over the phone, in emails, and on web sites.

Face-to-face communications (a first degree interaction) has no record, no evidence beyond the memory of the participants. Telephony (second degree) may have a record, such as an audio voice message. Email (3rd degree) gets circulated, over and over. Thanks to search engines and web-archiving tools, the web (4th degree) offers a permanent record.

Paradoxically, we seem to take more care in communications when the conversation can most easily be private and candid. Conversely, we pay less attention to etiquette and courtesy when the audience is global and of diuturnal impact.

Earlier this month, I wrote a blog post entitled “Mythbusting Canadian telecom”. A couple weeks ago, I was asked if I would mind them promoting my tweet that linked to the post. At the time, I thought it would be a great way to drive traffic to my blog and Twitter feed.

I should have remembered the 4 degrees thing.

The promoted tweet generated thousands of additional views of the blog post and more than a hundred ‘likes’ of the tweet itself. I added a large number of followers on Twitter and a bunch of subscribers to my blog.

But, it also led to a remarkable number of venomous replies, some crossing the line into virulent antisemitism, virtually all of which came from anonymous accounts. As an aside, a significant proportion of the trolls used cat images, a bunch used Soviet-era communist icons, while most of the others are stuck in their fantasy cartoon and gaming personas. Hiding in their mom’s basement behind the safety of a shield of anonymity, it seems too easy to spread hate and be downright anti-social on some social media platforms.

Confronted with inconvenient facts, apparently some people feel the need to resort to ad hominem attacks, rather than preserving the obscurity they so richly deserve.

I’m not offering a solution; I’m just finding there is some catharsis in venting.

Your comments are welcome. (Reminder: comments are moderated on this platform)

Opensignal released the first edition of its “Canada 5G User Experience Report” and I found the accompanying commentary to be more interesting reading than the comparisons of service providers.

In Opensignal’s first comparison of the 5G experience across carriers in Canada, we found a mobile network experience landscape characterized by extreme competition. Out of seven awards for the taking, not one award category was won outright by any of the operators. Our users saw three-way statistical ties between Bell, Rogers and Telus on three metrics — 5G Availability, 5G Reach and 5G Upload Speed — and in the remaining categories, users saw ties between two operators.

That merits repeating: “in Canada, we found a mobile network experience landscape characterized by extreme competition.”

Opensignal continued, by recognizing that Canada has historically been one of the “leading 4G markets globally when it comes to mobile network experience …, but when it comes to 5G, Canada is losing global leadership.”

Opensignal points to limited availability of spectrum for Canadian mobile carriers compared with international peers.

This change of fortunes as we enter the 5G era is likely because Canada’s carriers are limited to deploying 5G in lower spectrum bands for now, as the auction of the critical 3.5 GHz mid-band spectrum was delayed until June 2021 due to COVID-19. However, even then, Canadian carriers will have access in this auction to a very limited amount of spectrum in the 3.5 GHz band — 200 MHz (maximum of 150 MHz for Bell, Telus and Rogers) — which is significantly lower compared to many other 5G countries.

The report notes that the “full capabilities of 5G are best realized through the wider channel sizes in the new 5G bands”, saying that “for users to enjoy the best 5G speeds, carriers need to be able to deploy 5G with 100 Mhz channel sizes which is extremely difficult for carriers to achieve without access to new mid-band spectrum.”

In the future, Canada’s carriers need access to comparable amounts of new 5G spectrum to carriers in other countries. Otherwise, if Canada’s carriers are forced to continue to rely on re-using existing spectrum for 5G, or lower frequency bands for 5G that offer great coverage but lower capacity, then Canada risks falling further behind in the global 5G race for offering the best mobile network experience.

These seem to be some pretty clear signals from Opensignal, a global observer of the mobile marketplace: Canada has a 5G market landscape characterized by extreme competition, but constrained by limited spectrum.

Broadband adoption is lower in low income households compared to higher income households. Absolutely true.

So why don’t we just lower the monthly price and solve the income divide?

That was my thought process way back, when I first started looking at income data correlated with computer ownership and home internet subscriptions.

Unfortunately, after introducing Connected for Success, Internet for Good, Connecting Families and other targeted programs, we have learned that getting people online isn’t just a matter of price.

Economists Gregory Rosston and Scott Wallsten wrote about this last year:

Well-meaning policymakers and advocates typically say that the biggest issue keeping low-income people from subscribing is the cost. Surveys consistently list that as one of the top two reasons. If that were so, the solution would be obvious: increase subsidies. And, to be sure, lower prices for low-income households would encourage additional adoption. As economists, far be it from us to argue that demand curves do not typically slope downwards.

But evidence from people’s behavior, as opposed to survey responses, has shown that the price of broadband service is not the primary factor that keeps many low-income households from subscribing.

The paper talks about the need to gather more evidence, such as experiments conducted by the FCC in the US that tested different price points. “Only about ten percent of the expected number of households signed up, even with the price of one plan set at $1.99 per month.”

Last week, Policy Options carried a piece by Doug Brake and Alexandra Bruer, asking “Is the link between internet adoption and broadband pricing overstated?” The subtitle summarizes the article saying, “Pricing is often identified as a barrier to internet adoption, but the data is unclear. Policy-makers should focus on subsidies for low-income users.” That article cited the 2020 Inclusive Internet Index by The Economist Intelligence Unit, that gave Canada a high ranking, based on internet availability, affordability, relevance (which measures the availability of content relevant to local users) and readiness. Earlier this week, the 2021 edition was released and Canada moved up (into 6th place of 120 countries) and first in Affordability, saying “The competitive Canadian broadband market is a key factor underpinning relatively affordable fixed broadband costs and Canada’s 6th place overall ranking.”

There are certainly many households that have trouble paying the generally available rates for broadband service, just as those households have difficulty paying generally available prices for food, shelter and other basic needs. The “broadband affordability” argument often gets extrapolated to say that prices need to be lowered across the board [see: Myth 2: Pricing equals Affordability].

We use a direct subsidy approach for other basic needs. Why are communications services treated differently? Across Canada, there are low priced plans for disadvantaged households that are provided on a voluntary basis by participating service providers, not government funding.

But we have learned, lower prices aren’t enough to get people to connect.

We have well-meaning advocates and academics in Canada pushing agendas for municipal broadband with no evidence, or in the case of ConnectTO, deeply flawed evidence, to support their assertions that gaps in adoption rates are all about price.

The mistake that emerges from a lack of good economic and social data analysis is that governments are tempted to apply the wrong solution to solve the wrong problem. We see that with Toronto’s misguided and ill-informed Connect TO project. The Policy Options article concludes by saying “We should look instead at improving existing subsidy systems to address broadband affordability head-on, rather than through wholesale changes to industry structure.”

Professor Mark Jamison warns that the US is embarking on a similar, but even more elaborate $100B broadband boondoggle.

President Joe Biden wants Americans to have broadband in the worst way. His $2.3 trillion American Jobs Plan — which isn’t a jobs plan, but that’s another topic — includes $100 billion for broadband using the worst plan imaginable: He wants broadband provided by the government institutions that bring us the U.S. Postal Service, Amtrak and our failing transportation, water and other infrastructures. What could go wrong?

Bridging the income divide will take more than just lower prices. We are going to need to do more to build increased digital literacy and trust among those who aren’t already comfortable online. As I have said so often, we need better quality data to inform our policies and implementation plans.

As Economists Rosston and Wallsten found, we need to look beyond price to find the secret to bridging the digital divide.