Google is pushing for changes to federal rules that would make it easier to set up a telecommunications service in Canada rivalling Bell, Rogers and Telus.
In a submission to a government-appointed panel reviewing the country’s broadcasting and telecommunications laws, Google is calling for changes to allow the expansion of mobile virtual network operators (MVNOs). Such carriers do not have their own infrastructure or spectrum, but operate both via Wi-Fi networks and on existing wireless networks by buying access at wholesale prices.
Google’s support for the policy changes comes as the tech giant is reportedly in discussions to set up a fourth mobile carrier in the U.S., and as Canada’s telecom regulator is considering a policy change that would make it easier for MVNOs to enter the market.
Google is calling for changes to allow the expansion of mobile virtual network operators in Canada, which operate via Wi-Fi and other telecommunications companies’ networks instead of on their own infrastructure and spectrum. Major Canadian telecoms including Rogers, Bell, Telus and Shaw oppose the changes.
Google’s submission states that it’s interested in addressing Canadians’ internet access issues so that content creators can use online platforms like its subsidiary YouTube to reach global audiences.
“To facilitate this, and to further competition in wireless and wireline markets, we support the adoption of the flexible telecommunications regime that would readily permit the introduction of new services, such as Mobile Virtual Network Operators, and allow for more flexibility in spectrum management,” the document reads.
In the U.S., Google operates Google Fi, an MVNO that runs on public Wi-Fi hotspots and the networks of T-Mobile, Sprint and U.S. Cellular. Consumers pay US$20 a month for unlimited calls and texts, and up to US$60 for data.
In July, the New York Post reported that Alan Mulally, a director of Google parent Alphabet, had held talks with Dish Network, a satellite TV provider, about acquiring wireless assets from T-Mobile to create a fourth carrier in the U.S. Google denied having any such discussions.
Google’s submission to the expert panel isn’t the first time it’s shown an interest in MVNOs in Canada. In February, MobileSyrup reported that the company had filed a Canadian trademark application for Google Fi.
Google Canada declined to answer questions from The Logic about whether it planned to offer an MVNO or launch Google Fi in Canada.
The Canadian Radio-television and Telecommunications Commission (CRTC) is currently considering whether to require the country’s Big Three telecoms to sell MVNOs access to their networks for an unspecified period of time at set prices, until the startup firms are able to acquire their own spectrum and infrastructure.
The regulator made the proposal in March, days after Innovation Minister Navdeep Bains said he would issue a directive requiring the CRTC to consider affordability in its decision-making, in addition to its existing principles of competition, consumer interest and innovation. The government has been pushing the agency for action on lowering prices, and Bains said his order was partly influenced by CRTC decisions not to require access for MVNOs in 2017 and 2018.
The CRTC proceeding is running at the same time as the legislative review, which could recommend changes to the acts that the CRTC enforces. It has scheduled a public hearing on its proposal in January 2020, the same month the legislative review is expected to issue its recommendations.
Rogers Communications, Bell Mobility and Telus Communications all opposed the CRTC proposal in their submissions to its proceeding, citing concerns that mandatory access for MVNOs would reduce the incentive to invest in network infrastructure just as they prepare to roll out 5G technology. The firms also argue that the country’s wireless market is already competitive.
Shaw Communications also argued against the proposal, saying MVNOs would target its own Freedom Mobile customers and stop it from gaining market share, which will “reinforce the strength of the Big 3.”
On the other side is the U.S.-based Computer and Communications Industry Association (CCIA), which said in its submission to the CRTC proceeding that MVNOs create competition and lower wireless prices. Google is a member of the association, which represents tech and telecom giants on ICT issues; it did not submit directly to the CRTC proceeding.
When asked about their positions on MVNOs in light of Google’s submission to the review, Rogers, Bell, Telus and Shaw directed The Logic to their CRTC proceeding memos. None answered questions about whether they have held discussions with Google about accessing their networks to allow the tech giant to set up an MVNO in Canada. Quebecor-owned Vidéotron declined to comment.
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Foreign owners are banned from acquiring more than 20 per cent of any wireless carrier with more than a 10 per cent market share. “Under the current rules, Google is theoretically able to set up as an MVNO in Canada, if a [network operator] willingly signed an agreement with them,” said Patricia Valladao, media relations manager at the CRTC. “No such agreement is currently in place.”
The regulator did not answer questions about whether Google had approached it about setting up an MVNO, citing the ongoing proceeding.
In November 2018, The Logic reported on internal government documents that showed foreign competition in Canada’s wireless market would lower prices and increase economic growth, as well as possibly increasing the value of the Big Three.
Innovation Minister Navdeep Bains did not directly answer questions about whether he supported mandated access for MVNOs or would be in favour of Google launching one in Canada. “Increased choice and affordability for Canadians is our priority,” said Dani Keenan, the minister’s press secretary, citing the government’s directive to the CRTC.