Ofcom, the telecom regulator in the UK, issued an important policy statement last week promoting investment and competition in fibre networks.

In its story about the policy statement, Computer Weekly said that infrastructure in the UK’s was recognized to be in “urgent need of an upgrade, especially as demand for data continues to accelerate, an issue made even more pressing by the need for mass remote working.”

Computer Weekly reported “To address these needs will require significant private investment in full-fibre broadband, said Ofcom, which noted that network competition had helped full-fibre coverage increase at its fastest ever rate over the past year – and that momentum had continued throughout the pandemic.”

when it comes to ultra-high-speed fibre services, Ofcom confirmed these would continue to be free from pricing regulation. The rationale for this decision is that people can choose the entry-level service as an alternative. Moreover, Ofcom added that Openreach could also “charge a bit more” for regulated products delivered over full-fibre instead of copper, because it regards full-fibre as consistently faster and much more reliable.

This echoes the policy set forward in Canada last summer, when Industry Minister Navdeep Bains pronounced “Canada’s future depends on connectivity”.

Ofcom wrote:

Our approach to supporting investment in gigabit-capable networks is focused on encouraging competition between different networks where viable, which will provide high quality services, choice and affordable broadband for consumers throughout the UK. We recognise that it will require significant investment from private companies to upgrade the UK’s networks, so they are fit for the future. Our decisions incentivise that investment – giving regulatory certainty and allowing companies to make a fair return whilst ensuring consumers continue to have access to affordable broadband as new networks are rolled out.

As I think back to an exchange between the Conservative Industry critic and a TELUS executive at Canada’s parliamentary industry committee last year, we can now see a clear statement from the UK regulator favouring competitive private sector investment in infrastructure, and creating regulatory incentives for facilities-based competition.

Favouring facilities-based competition has been Canada’s telecom policy approach for nearly 30 years. And other regulators are seeing the light.

The news of a $26B Rogers – Shaw merger will likely generate a lot of commentary on a lot of issues over the next year as the transaction moves through the approvals process.

One of the more immediate questions is how the transaction impacts the upcoming 3500 MHz spectrum auction in Canada.

The deadline for applying to participate in the auction is April 6.

Under the Policy and Licensing Framework, once again the Department considered what are termed “Pro-Competitive Measures”, such as spectrum set-asides and spectrum caps. In the end, it determined not to implement a cap, but to set-aside up to 50 MHz of spectrum (not every license area has sufficient unencumbered spectrum available due to wireless internet service providers operating in that band).

The discussion and determination on eligibility to bid on the set-aside spectrum was also interesting: “eligibility to bid on set-aside spectrum will be limited to those registered with the CRTC as facilities-based providers, that are not National Mobile Service Providers, and that are actively providing commercial telecommunications services to the general public in the relevant Tier 2 area of interest, effective as of the date of application to participate in the 3500 MHz auction.”

Which brings us to understanding who are “National Mobile Service Providers”, defined as “companies with 10% or more of national wireless subscriber market share,” which effectively means Bell, Rogers, and TELUS.

The rules also discuss associated and affiliated entities, “relating to the participation of affiliated and associated entities in order to ensure that each bidder is an independent bidder.”

Associated Entities are defined as “Any entities that enter into any partnerships, joint ventures, agreements to merge, consortia or any arrangements, agreements or understandings of any kind, either explicit or implicit, relating to the acquisition or use of any of the spectrum licences being auctioned in this process will be treated as associated entities.”

Under that definition, the announced “agreement to merge” appears to make Rogers and Shaw “associated” for the purpose of the auction. In most circumstances, Associated Entities are presumed to be non-independent bidders, but paragraph 265 states “Associated entities may apply to participate separately in the 3500 MHz auction. ISED is of the view that allowing associated entities that are competitors in the market to bid separately would not have an adverse impact on the integrity of the auction provided that auction participants comply with the information disclosure and anti-collusion rules.”

The anti-collusion rules are one gate, and Paragraph 266 sets out a second gate: “To obtain approval to participate separately in the auction, associated entities will be required to demonstrate to ISED’s satisfaction that they intend to separately and actively provide services in the applicable licence area.” Following statements by the companies in the wake of the merger announcement, it is difficult to imagine that Rogers and Shaw “intend to separately and actively provide services” anywhere.

If Associated Entities wish to bid separately, they must apply two weeks prior to the April 6 application deadline. That happens to be tomorrow, March 23.

Will Shaw participate separately in the 3500 MHz auction in June? Likely not, given statements when the merger was announced last week. “With telecom companies making multibillion-dollar investments to upgrade networks to 5G technology, chief executive Brad Shaw said he decided his Calgary-based company could no longer go it alone and agreed after years of takeover pitches from Rogers to embrace a $20.4-billion acquisition.”

Given restrictions on eligibility, that bidders must currently be offering telecom services in a license area to participate, it is possible that some set-aside spectrum may end up unsold, while vigourous competition drives up prices in the remaining bands.

Should we consider this a bug in the auction design or a feature?

The 5G Canada Council (5GCC), together with the Canadian Wireless Telecommunications Association (CWTA), is launching a monthly series, 5G Canada: What’s Next, “exploring how the next generation of wireless technologies will transform the way Canadians live, work and prosper.”

5GCC describes itself as “a multi-stakeholder Council with a membership base that includes Canadian wireless carriers, network equipment providers, academia and other product and service providers in the 5G ecosystem.”

The 5G Canada: What’s Next? monthly event series will host leading experts to discuss digital innovations in key areas of Canadian society, including the connected home, education, healthcare, automotive, industry 4.0, and public safety, and how 5G will serve as a key enabler for Canadian innovators.

The first session in the series is taking place at noon (Eastern Time) on Tuesday March 30, featuring guest speakers:

• Luciano Ramos, SVP of Core Networks and Engineering, Rogers
• Bruce Rodin, VP Wireless Technology, Bell Mobility
• Chris Pearson, President, 5G Americas

There is no fee, but you need to register in advance.

“Wholesale telecom services are a lot like selling the big guys’ hand-me-downs.”

That’s how a then-independent telecom journalist described the non-facilities based service providers a few years ago.

On paper, the wholesale scheme seems to make sense: Big network owners are forced to provide airtime to any and all commercial interests at regulated terms and rates, which other companies then resell to consumers at whatever prices they see fit.
…
But in the grand scheme of things, it’s worth asking whether the whole wholesale regime has really accomplished anything.

He concluded with “If the government is going to consider regulated wholesale wireless access, it would have to ensure that it doesn’t just enable hand-me-down services. Realistically, though, that hasn’t happened elsewhere so there’s no reason to expect it would in this situation.”

The 2013 article speaks of the ineffectiveness of a 10% market share for US mobile resellers (Mobile Virtual Network Operators, or MVNOs) as “the best reason for why the Canadian government shouldn’t be – and probably isn’t – thinking of wholesale service as a solution to what ails the country’s wireless market.” [CRTC figures show that Canada’s wholesale-based internet service providers still have less than 10 percent market share [xlsx] after well over a decade of regulated access to wholesale highspeed internet service.]

In the years subsequent to this article, we have seen the capital intensive nature of telecommunications globally drive consolidation in the MVNO marketplace. The two largest US MVNOs, Tracfone and Cricket, have been acquired by Verizon and AT&T, effectively turning these two MVNOs into flanker brands of the mobile giants.

MVNOs continue to exist in Canada on a non-mandated basis and Telegeography data (filed by CWTA in its Wireless Review intervention [pdf]) shows that the market shares of Canada’s flanker brands (own-brand MVNOs) combined with MVNOs is among the highest in the OECD.

Last summer, Cabinet told us “Canada’s future depends on connectivity”, signalling quite strongly that the CRTC’s August 2019 rates “do not, in all instances, appropriately balance the policy objectives of the wholesale services framework and is concerned that these rates may undermine investment in high-quality networks, particularly in rural and remote areas.” Throughout its statement, Cabinet was clear in stating that preserving incentives for network investment was missing from the August 2019 wholesale framework.

A great body of economic evidence and observations from markets around the world has been provided to the CRTC to assist in its deliberations on varying its wholesale internet rates decision and its review of wireless services.

As reported here a couple weeks ago, a recent communiqué from the Telecommunications Working Group of the C. D. Howe Institute (chaired by the Dean of McMaster University’s DeGroote School of Business) concluded “Investment in the telecommunications sector is vital for ensuring Canada’s next generation digital infrastructure.”

Balancing Quality, Coverage and Price. It takes investment, massive levels of private sector investment, to drive quality and increase coverage. Prices have been coming down thanks to facilities-based competition.

MVNOs can continue to exist without regulatory intervention (like in most countries), where carriers and operators are able to identify business opportunities that make sense.

As that former journalist wrote, wholesale telecom services aren’t the solution.

Canada’s premier tower industry event – the annual STAC Conference & Exhibition will be held virtually April 12-16, 2021.

Structure, Tower and Antenna Council (STAC) is a Council of the Canadian Wireless Telecommunications Association (CWTA), reporting to the CWTA Board of Directors. The Council is member-driven, and is directed by an eleven-member steering committee representing the communications network infrastructure market.

STAC 2021 is dedicated to safety and other best practices in the communication tower industry and will bring together industry professionals from across Canada. Expected attendees include representatives from wireless carriers, broadcasters, oil and gas companies, utility providers, tower engineers, contractors, manufacturers, safety trainers and safety equipment suppliers from across the communications and tower industries.

Improving access to education and training resources can help all workers in the communications antenna construction industry remain as safe as possible. This collaborative approach helps ensure all have access to the best possible training and educational material.

The annual STAC conference is the premier event dedicated to Canadian tower safety and is devoted to sharing the important information and best practices that will help maintain Canada’s world-leading tower safety record. STAC brings together experienced professionals from across the industry to help identify optimal guidelines and best practices for all aspects of communications antenna construction. Attendees will learn about new industry practices and technologies and will receive exclusive information about the development of STAC best practices and other industry resources that are normally only available to STAC Members.

The STAC Conference & Exhibition will bring you valuable safety content, opportunities to network, and an engaging virtual exhibit floor. Registration includes a delegate bag shipped directly to you!

I look forward to seeing you there.