Search Results for: calvinball

On October 3, the CRTC concluded the oral hearing portion of its “Review of wholesale mobile wireless services” with a statement: “as stated in the Notice of Consultation, we expect to issue a decision within four months of the close of the record.”

The record closed October 20, which would have made February 20, 2015, last Friday, the self-imposed deadline for the CRTC – coincidentally, the one-year anniversary of the original Public Notice.

When will the CRTC release its decision?

There are a number of issues being reviewed:

• Should the CRTC regulate wholesale roaming rates?
• If so, at what level?
• Should the CRTC mandate resale to enable MVNO – mobile virtual network operators?

On this last point, the CRTC’s work should be pretty easy. Consistently, Industry Canada has rejected calls to mandate resale as a “condition of license” for mobile operators.

In the original AWS spectrum auction that gave rise to today’s competitive entrants such as Wind Mobile, Mobilicity, Videotron and Eastlink, Industry Canada created license conditions that stated: “Roaming as provided for in this condition does not include resale.”

Since that time, Industry Canada has had a number of reviews of its license conditions and associated network infrastructure sharing rules, each time remaining consistent. For example, in its March 2013 “CPC-2-0-17 — Conditions of Licence for Mandatory Roaming and Antenna Tower and Site Sharing and to Prohibit Exclusive Site Arrangements“, Industry Canada determined:

A carrier must therefore be offering service on its own network before its subscribers may benefit from roaming on another network, thus it does not include resale.

At the same time, Industry Canada’s perspective has been that “Nothing in the policy, however, is intended to limit the ability of carriers to conclude commercial agreements that are not mandated by this policy.”

Next Tuesday at noon, just one week from now, Canada’s wireless industry will be placing multi-billion dollar bids on spectrum, having built business plans under the December 18, 2014 Framework released by Industry Canada. At that time, Industry Canada reaffirmed the “conditions of license” with no mandated resale.

The CRTC’s wholesale wireless decision should have been released already (it was promised to be out by last Friday), allowing carriers to adjust their business models in advance of the single bid submission deadline.

A fundamental change in the regulatory framework, such as the CRTC mandating resale, could mark the return of Calvinball to Canada’s wireless sector.

There is already lots to talk about at The 2015 Canadian Telecom Summit, June 1-3 in Toronto. Early bird rates are available through Saturday February 28. Have you registered yet?

As I have explained before, Calvinball is a game that has rules, but the rules keep changing.

Here is how Wikipedia describes the game, which was introduced about 20 years ago in the comic strip Calvin and Hobbes:

The only consistent rule is that Calvinball may never be played with the same rules twice. Scoring is also arbitrary, with Hobbes reporting scores of “Q to 12″ and “oogy to boogy.” The only recognizable sports Calvinball is similar to are the ones that it emulates (i.e., a cross between croquet, polo, badminton, capture the flag, and volleyball.) Equipment includes a volleyball (the eponymous “Calvinball”), a soccer ball, a croquet set, a badminton set, assorted flags, bags, signs, and a hobby horse. Other things are included as needed, such as a bucket of ice-cold water, a water balloon, and various songs and poetry. Players also wear masks that resemble blindfolds with holes for the eyes. When Rosalyn asked Calvin what the reason for the requirement was, Calvin responded, “Sorry, no one’s allowed to question the masks.”

For the past 4 years, I have used Calvinball to describe Canada’s communications policy, such as here, here, here and here.

The government has been advertising that it welcomes foreign investment in telecommunications; foreign investment apparently forms a key part of the government’s strategy to encourage competition in the sector. Yet, this evening, the government turned down the sale by Manitoba Telecom (MTS) of Allstream to Accelero Capital for “national security reasons,” having taken four and a half months to make a decision. According to MTS, the government “rejected an offer from MTS and Accelero to take whatever actions are necessary to address the government’s concerns.”

Keep in mind that the principals of Accelero are well known to the government. These are the same people that were permitted to buy spectrum and operate WIND Mobile. Indeed, the government seemed to bend over backwards to approve their entry into the market, overturning a CRTC decision that denied WIND Mobile’s right to operate (prior to the liberalization of foreign investment rules).

The Government says:

The Government of Canada has concluded its review of Accelero Capital Holdings’ proposed acquisition of the Allstream division of Manitoba Telecom Services Inc. (MTS) under the national security provisions of the Investment Canada Act. The result of this review is that the transaction will not proceed.

MTS Allstream operates a national fibre optic network that provides critical telecommunications services to businesses and governments, including the Government of Canada.

Just last December, Allstream announced that it had been awarded a multi-year contract to manage theMPLS network, for Shared Services Canada, the Government of Canada department responsible for providing telecommunication services, email and data centres. Allstream also appears to be a major supplier to Canada’s civil aviation navigation services provider, NAV Canada, among other government sector clients.

This evening’s government press release seems to be saying that foreign companies will not be permitted to acquire telecom companies that are providing services to the Government of Canada.

As MTS states,

the transaction would have, among other things:

• contributed to increased competition in Canada’s telecommunications sector;
• sent a strong message that Canada’s telecommunications sector is, in fact, open to foreign investment;
• enabled Allstream to accelerate the introduction of innovative products to increase the productivity of Canadian businesses;
• provided MTS the capital necessary to increase its investment in Manitoba’s telecom infrastructure, such as fibre-to-the-home for rural Manitobans; and
• resulted in $165 million of funding for MTS pension plans benefitting more than 10,000 Plan members.

Will MTS still be in a financial position to bid in the 700 MHz auction? Will it be able to continue its FTTH program, introducing some of the world’s most advanced services and competitive TV distribution in small rural Manitoba communities? What will become of Allstream and its need for continued capital investment? Accelero said that it had planned to inject an additional $300M into Allstream “to increase Allstream’s competitiveness and accelerate the introduction of innovative new products to increase the productivity of Canadian small, medium and enterprise businesses”.

The government’s “Fact versus Fiction” page talks about concerns that Canadians might have dealing with foreign owned telecommunications companies. One of its “Fictions” is “Your privacy is at risk if you choose a foreign cell phone provider” with a response “FACT: Canada has strong privacy laws to ensure our citizens’ personal information is safeguarded. These laws apply equally to all organizations that collect such information in Canada. The laws prevent any provider from disclosing personal information except with consent or when permissible by Canadian law.”

Maybe the government doesn’t have as much faith in dealing with foreign owned telecom service providers as it wants you to have.

Industry Minister Tony Clement gave parties until today to submit comments on the CRTC’s finding last month that Globalive does not comply with Canadian ownership requirements under the Telecom Act.

Why do I keep thinking of Calvinball when I read about the continuing twists and turns regarding the rules for the licensees from our last mobile spectrum auction?

Here is how Wikipedia describes the game, which was introduced about 20 years ago in the comic strip Calvin and Hobbes:

The only consistent rule is that Calvinball may never be played with the same rules twice. Scoring is also arbitrary, with Hobbes reporting scores of “Q to 12” and “oogy to boogy.” The only recognizable sports Calvinball is similar to are the ones that it emulates (i.e., a cross between croquet, polo, badminton, capture the flag, and volleyball.) Equipment includes a volleyball (the eponymous “Calvinball”), a soccer ball, a croquet set, a badminton set, assorted flags, bags, signs, and a hobby horse. Other things are included as needed, such as a bucket of ice-cold water, a water balloon, and various songs and poetry. Players also wear masks that resemble blindfolds with holes for the eyes. When Rosalyn asked Calvin what the reason for the requirement was, Calvin responded, “Sorry, no one’s allowed to question the masks.”

When asked how to play, creator Bill Watterson said, “It’s pretty simple: you make up the rules as you go.”

Calvinball is not the kind of game that the investment community will want to play. The government agencies (CRTC and Industry Canada) can’t be seen making up the rules as we go. That is why I told the Canadian Press that I don’t think the CRTC decision will be overturned.

Still, there is one aspect that the CRTC left a door open for policy guidance in its decision, as I suggested last month. There was an ambiguity in Paragraph 118 of the Decision in respect of the allowable amount of debt that could be held by a non-Canadian company.

The Industry Minister might pronounce on this particular point – providing clarity and flexibility – without tearing apart the integrity of foreign ownership restrictions.

Globalive is one of a number of new mobile spectrum license holders. Industry Canada needs to ensure that the rules are clear for all of the industry participants so that we can get on with the game.

In a post last month, I referred to a recent policy statement released by Ofcom, “Promoting competition and investment in fibre networks: Telecoms Access Review 2026-31”.

I thought the 39-page Statement by the UK regulator deserved a more serious look, especially in view of a sharp contrast with Canada’s regulatory posture, as set out in its 2024 Telecom Regulatory Policy: “Competition in Canada’s Internet service markets.”

Like the UK and many countries, Canada has set a political objective to extend high-speed broadband service to rural and remote regions. Of course, what the UK considers rural and remote is very different from the challenges faced by Canadian carriers. Officially, Canada defines rural as “areas [that] have populations of less than 1,000, or fewer than 400 people per square kilometre.” Roughly 20% of Canadians live in rural Canada. The UK government defines areas as rural if they fall outside of settlements with more than 10,000 resident population. In Canada’s Far North, we have a population density of just 0.02 per square kilometre. Although the definitions differ, roughly 20% of the population of the UK and Canada live in rural areas.

By the end of 2024, the CRTC shows 90.6% of Canadian households had access to gigabit broadband; Ofcom shows 87% of UK premises by mid-year 2025.

In their policy documents, there are similar opening statements by Canada’s CRTC and the UK regulator, Ofcom:

• CRTC: “the Commission is working to increase competition while ensuring continued investments in high-quality networks.”
• Ofcom: “Our regulation is designed to promote competition and investment in high quality gigabit-capable networks – bringing faster, better broadband to people across the UK.”

The UK’s approach, as laid out in Ofcom’s statement, is an endorsement of facilities‑based competition, with regulations mandating access to passive infrastructure (eg. ducts and poles). Canada used to operate under the premise that facilities-based competition is the most sustainable form; in recent years the CRTC decided to experiment with a hybrid approach, seeking to ensure its wholesale framework “provides equitable regulatory treatment” (as it describes in TRP 2024-180). The divergence is more than just philosophical; it is producing different market structures, and different investment incentives. Canada’s ‘top-down’ regulated wholesale-access policy is applied on wireline and wireless, in sharp contrast to the market-led approach in many other jurisdictions.

In its Policy determination, the CRTC said “Consumers have fewer choices when buying Internet services: in recent years, competition has been declining. By the end of 2022, independent ISPs served significantly fewer customers than they did at the start of 2020. At the same time, several of the largest independent ISPs have been purchased by incumbents.”

This formed part of the rationale for the CRTC’s shift. But there are some strange disconnects in the Commission’s logic. “These facts suggest that the Commission’s prior regulatory approach, which prioritized facilities-based competition, has not brought about sustainable competition that delivers more choice and more affordable services to Canadians, nor has it resulted in universal access to higher-speed Internet services.”

There were two different concepts there. On the first, I would actually argue that there had been greater competitive intensity today among the facilities-based service providers, as evidenced by levels of investment, lower prices, and marketplace rivalry. The fact that independent ISPs – those depending on wholesale access – hold a diminishing share of the market should have been expected as a confirmation that facilities-based service providers were always seen as the most sustainable.

What did the Commission think was meant by sustainable competition? The level of competition should never have been measured by the number of competitors.

As to the second concept (universal access to higher-speed Internet services), coverage cannot be extended by way of wholesale access. Extending coverage requires construction of new facilities, which would seem to imply the need to focus on promoting investment.

The CRTC noted that it had received evidence that “demonstrated how [a decision to mandate wholesale access] could decrease network upgrades and prevent future network deployment. The Commission recognizes that regulatory measures that reduce the incumbents’ revenues can challenge the business case for the incumbents to deploy networks.”

So, the CRTC set up a 5-year “head start” provision as an incentive for telephone companies to extend the reach of their fibre networks. “While the Commission notes that its rate-setting process is designed to be compensatory, it considers that a five-year head start would provide additional incentive for the incumbents to invest in areas where they have not yet built FTTP by giving them an opportunity to more rapidly recoup their initial investments.” At the same time, the CRTC excused cable companies from the obligation to wholesale its fibre, since it only has about 5% of homes with fibre to the premises (as contrasted with 60% of telephone companies).

As it turns out, that 5-year head start isn’t proving to be enough of an incentive. Over the past couple of months, I have written frequently [such as here and here] that capital expenditures are down, measurably down, with carriers pointing blame at the CRTC framework. The Commission’s own monitoring report shows annual drops in capital spending in 2023 and 2024 since levels peaked in 2022. Public company reports are pointing to nearly 10% lower capex in 2025, and projections to fall another 15% lower in 2026.

That should be no surprise to the Commission. The CRTC was warned, as it acknowledged in the Policy determination at ¶34: “The incumbents submitted that a Commission decision to mandate aggregated HSA is likely to reduce investment in high-speed networks.”

Investment impacts quality and coverage – factors that are important for consumers. Contrast sharply falling investment in Canada with Ookla’s latest report on the US market, “Aggressive U.S. Broadband Expansion in 2H2025 Narrows Digital Divide”. “The U.S. broadband landscape underwent a big shift in the latter half of 2025. Thanks to record-breaking new fiber builds, the aggressive expansion of SpaceX’s Starlink, and the growth in fixed wireless access (FWA), broadband availability achieved some new milestones.”

The Commission’s decision to exempt cable companies from mandated fibre wholesale due to low share might also serve as a disincentive for cable companies to invest in fibre. In the Policy, the CRTC said that it was excusing cable from mandated fibre wholesale because the cable companies had such a low percentage of premises with fibre: “by the end of 2022, the cable carriers’ FTTP reached just 5% of the homes they pass nationally, compared to over 60% for the ILECs… Mandating the cable carriers to provide aggregated FTTP services would be costly to implement relative to the benefits it may bring to Canadians. It may also result in a loss of cable carriers investment.”

The Commission warned, “A significant increase in the percentage of homes passed by the cable carriers’ FTTP may prompt a Commission review of whether the cable carriers should begin providing aggregated FTTP services.” This was very strange wording in my view – effectively threatening increased regulation if the cable companies invest too much in fibre.

In his speech at the Scotiabank TMT Investor Conference, CRTC Vice Chair Adam Scott described the Commission’s decision-making process as “we take the evidence on the record and use it to form a regulatory hypothesis — that by taking a certain course, we will see a certain type of outcome.”

In the case of capital investment levels arising from its fibre wholesale policy, the CRTC is clearly not seeing its anticipated outcome. How should the Commission respond?

I noticed an interesting phrasing in the Ofcom document with respect to capital expenditures: “We also recognised that the long-term nature of network investments requires regulatory stability and therefore set expectations about future regulation to 2031 and beyond.”

No one wants to see a return to Canada’s Calvinball approach to regulation. “The only permanent rule in Calvinball is that you can’t play it the same way twice.”

If we want to create appropriate incentives for private sector investment in telecom, we can’t keep changing the rules. But first, we need rules that actually encourage investment.

Do you need holiday reading material to keep busy over the next couple weeks? Things to help you stay out of the way? Excuses to keep out of sight so you don’t get assigned any chores?

Of course, you should catch up on your reading on this blog. Last week, I published my Top 5 list, providing the posts most read over the past year. Those would make a good start.

My year-end wrap up posts are also good holiday reading material: “Checking my scorecard” and “So the years spin by…”.

Howard Law has an interesting blog looking at Media Policy. He recently featured discussions about how to move forward with CBC. Most recently he interviewed former CRTC Vice Chair Peter Menzies. Earlier we heard from former CBC Executive (and former Deputy Minister of Communications) Richard Stursberg.

Also, be sure to check out Ted Woodhead’s latest: “Telus really wants to be a reseller now? In Regulatory Calvinball that makes complete sense.”

If you haven’t read those materials yet, do so before you come back to the office in January. Both sites have places to sign-up. You should.

30 years ago, I was the executive responsible for a national voice telecom network. I used to make a point of going into the office on Christmas Eve, Christmas Day, and New Years, to chat with the people who had to be away from their families on such a special and meaningful night.

I remember the building facilities person – let’s call her Irene (since that was her name) – being very concerned about the evening crew repurposing the cable TV feed we had for the Weather Channel. Irene was worried the staff might start watching late night movies on the big board in the Network Operations Centre. My view was that if it helped the night shift stay awake, it was money well spent.

Many of us are taking time away from the office over the next couple weeks. Remember that there are dedicated professionals keeping an eye on the technology that so many of us are able to take for granted. They keep the lines open through inclement weather, power failures and pull teams together to rapidly respond to outages, often working round the clock in horrible weather conditions.

Whatever holiday or holy days you celebrate over the coming weeks, raise a glass and salute the professionals keeping it all running. Keep safe. See you in the New Year