From:! Ben Klass - David Ellis - Questions for Bell Mobility!

Transcription

1 From: Ben Klass - benjiklass@hotmail.com David Ellis - david@davidellis.ca 9 June 2014 Mr. John Traversy Secretary General CRTC Ottawa ON K1A 0N2 Via GCKey Re: Review of wholesale mobile wireless services, Telecom Notice of Consultation CRTC Dear Mr. Traversy: 1. Pursuant to paragraph 30 of Telecom Notice of Consultation CRTC , as amended by TNC , we are hereby filing the attached requests for information in the above-noted proceeding. 2. The attachments address the following parties: Bell Mobility; Telus; MTS, SaskTel, and Tbaytel (the Regional Carriers); Rogers. 3. Electronic copies of these questions have been provided to the respondents. Sincerely, Ben Klass and David Ellis. Questions for Bell Mobility Question #1 - Bell Mobility Bell notes in many places in its intervention of May 15, 2014 that if the Commission elects to increase regulation of the wholesale market, Bell may be prompted to reduce its investments: for example, regulation runs the very real risk of discouraging investment in an industry whose long term health hinges on a constant flow of network investments (p.1, paragraph 3). a) Please describe exactly what forms of unforbearance, regulation or re-regulation of the wholesale wireless market would prompt Bell to reduce its investments in network facilities. Would these reductions be targeted primarily at upgrades or new builds? 1 of 6

2 Question #2 - Bell Mobility Bell s intervention is not consistent in its treatment of network sharing arrangements. The position is taken, on one hand, that there is no need to mandate access to any network components or functionality, since they are commercially available to all carriers: Because all Canadian wireless providers have access to the inputs they require in order to effectively compete in the retail market, this indicates that all network elements are duplicable and there is no justification for the implementation of additional wholesale regulations (page 63, paragraph 161). The same observation is made later, to the effect that all key inputs required to provide wireless services in the downstream retail market are readily available (page 75, paragraph 205). On the other hand, the argument is made that certain market characteristics do in fact require the use of shared facilities: Even when a wireless carrier has the best intentions to deploy its own network facilities, there do exist situations where reliance on access to another wireless carriers' facilities through tower and site sharing and domestic roaming are necessary (page 63, paragraph 163). a) In light of the apparent contradiction between these two sets of statements, to what extent does Bell rely on the Telus network to provide service to its own subscribers? b) Is Bell, as suggested in its various press releases, (e.g. Bell news release of Oct 17, 2001, and Bell news release of Oct 5, 2009) avoiding investment by its network sharing arrangement with Telus? c) If so, then explain why this arrangement is appropriate for these two carriers and yet not appropriate, whether on a mandated basis or otherwise, for competitive entrants, including MVNOs and MVNEs. Question #3 - Bell Mobility In section 2.2 (Network Quality and Reach), the following statement appears at paragraph 19: Canadians have access to some of the fastest mobile network speeds anywhere in the world. According to Cisco, Canada ranks second in average network download speed amongst its peers. Figure 2 shows that Canada outperforms all European countries by a significant amount. The source for the average network download speeds (in Fig.2) is given as the Cisco Mobile VNI (2013). The source for the average network upload speeds (in Fig.3) is given as the Ookla Net Index Explorer (Jan 1-Mar 14, 2014). The countries compared here comprise 18 of the G20 members. In an earlier passage (page 4, paragraph 12), the selection of this comparison group is justified as follows: Where available, international comparisons will be provided in this section to illustrate Canada's performance relative to its peers predominantly countries in the G20. We focus on G20 countries because: 1) they are the most economically significant countries in the world, representing approximately two-thirds of the world's people and 85% of its economy;30 2) public data is more readily available for this group of countries than it is for countries with smaller economies; and 3) the G20 includes the countries that are traditionally compared to Canada. a) The 17 other G20 members in this comparison group are described as Canada s peers and as countries traditionally compared to Canada. Explain why in Bell s view this group allows for 2 of 6

3 more meaningful speed comparisons than data for the 34 OECD countries, or the 38 countries used by the FCC in their international benchmarking, which include the 34 OECD countries, plus Bulgaria, Hong Kong, Lithuania and Singapore. b) Are the download figures shown in Fig.2 based on advertised speeds as opposed to actual measured speeds as in the Ookla data? If so, please explain why the download speeds are not also based on Ookla s actual measurements, as are the upload speeds in Fig.3, since that would provide more recent data than what Cisco s VMI provides, as well as consistency between the two sets of figures. Question #4 - Bell Mobility The section on Network Quality and Reach (2.2) characterizes Canadian wireless networks as among the best in the world - characterized by innovation, high speeds, high capacity and high consumer usage. In contrast, a March 2014 study by Prof. Dwayne Winseck of Carleton University concludes from its analysis of OECD and FCC data that, while Canada does indeed rank 2nd for advertised mobile wireless download speeds in the 34 OECD countries, it ranks 25th (of 34) in penetration and 28th (of 34) in monthly pricing, for a composite Canada ranking of 19 out of 34 (Table 3, p.37). a) Explain the apparent discrepancies between these two methodological approaches. Does Bell maintain that the data used in the Winseck study are less meaningful or relevant than the data used by Bell in its intervention? Question #5 - Bell Mobility On pages 31-33, there is a discussion of market concentration, with the conclusion being drawn that Canada's wireless market is less concentrated than its international peer group. This conclusion is based in part on the observation that Canada has a lower score on the Herfindahl-Hirschman Index (HHI) than many other countries. On the other hand, no mention is made of actual HHI scores for Canada or the comparison group. a) According to the market share chart shown in Fig.13 (page 25), the HHI for Canada s wireless market would be at least Please explain why in Bell s view this score is not relevant to determining whether Canada s wireless market is unduly concentrated. 3 of 6

4 Question #1 - for Telus Questions for Telus In section 2 of its intervention (Canadians Pay Low Prices for Mobile Wireless Services), Telus uses three arguments to counter the claim made by PIAC, Michael Geist and others that Canadians pay excessively high prices for their mobile wireless services, compared to most other countries. These are: a) that ARPU is not an indicator of price; b) the Wall Report shows Canada has lower prices than do five other jurisdictions; and c) that high levels of subscriber usage indicate Canadians love their smartphones. Please explain the discrepancy between this conclusion and the price ranking for mobile wireless provided in the March 2014 Winseck Report, which shows using FCC data that a) for cost per GB of data Canada ranks 25th (of 36 countries); and b) for average plan prices Canada ranks 32nd (of 36 countries) - for a composite ranking of 28th of the 36 (Winseck, Table 10). Explain the rationale for using five other jurisdictions, as does the Wall Report, in order to determine Canada s international ranking, rather than the 34 OECD countries, or some similar large international grouping of advanced nations. Question #2 - for Telus In a press release dated May 10, 2008, Telus announced its ongoing network sharing agreement with Bell: As part of its investment, TELUS has entered into a network sharing agreement with Bell, which builds on and enhances arrangements in place since 2001.The network sharing agreement allows TELUS to lower the cost, increase the speed of the build-out and gives TELUS the ability to offer the widest national coverage for HSPA, using existing 1900 MHz and 850MHz spectrum, in the shortest time possible. a) Explain whether and how a competitive new entrant would be allowed to enter into a comparable agreement with Telus for network sharing to avoid investment, increase coverage and offer consumers innovative service. If a new entrant would not be allowed to take advantage of this kind of arrangement, explain why, and explain as well why this option would be in the public interest. 4 of 6

5 Question #1 - for Regional Carriers Interrogatories to MTS, SaskTel, and Tbaytel (the Regional Carriers) In paragraph 21 of the Regional Carriers intervention of 15 May, 2014, it is stated that Shaw continues to aggressively roll out Wi-Fi networks in the Regional Carriers territories and other areas of Canada. At paragraph 22, the Regional Carriers state: Mobile phone handsets can be configured to work over Wi-Fi alone. More common is the tendency of users to configure smartphones to access Wi-Fi networks wherever possible and default to traditional wireless where Wi-Fi is not present. a) Please identify in which of the Regional Carriers territories Shaw has rolled out Wi-Fi service; b) Do the regional carriers view Shaw s Wi-Fi service as a substitute for their own mobile wireless services? c) If the answer to b) is affirmative, please provide evidence to support your position. Question #2 - for Regional Carriers At paragraph 43 of the Regional Carriers intervention of 15 May, 2014, it is stated that The Commission should be under no illusions that because the Regional Carriers have reached certain agreements with various National Carriers the playing field is level. Later, at paragraph 48, it is stated that, if the Commission grants regulated access to wholesale roaming from the National Carriers, the Regional Carriers would grant the same regulated wholesale roaming rates to the new entrants and other Regional Carriers. a) Are the Regional Carriers prevented by the terms of their agreements with National Carriers from offering wholesale roaming services to each other and/or other competitive mobile wireless service providers? b) Are the Regional Carriers prevented by the terms of their agreements with National Carriers from offering other wholesale wireless services (e.g. MVNO/MVNE) to each other and/or other competitive mobile wireless service providers? 5 of 6

6 Interrogatories to Rogers Question #1 - for Rogers At paragraph 50 of its May 15, 2014 intervention, Rogers states: The only exceptions to the essential facility approach should be public good services and interconnection services. a) In Rogers view, are mobile wireless towers considered support structures? If so, do they qualify as public good services? b) If the answer to b) is no, please provide a rationale for your position. c) In Rogers view, are wholesale roaming services interconnection services? d) If the answer to c) is no, please provide a rationale for your position. Question #2 - for Rogers At paragraph 65 of its May 15, 2014 intervention, Rogers states: when a strong competitor has entered the market, it has shifted market share away from the incumbents in a relatively short time frame. a) Please clarify this statement. Provide definitional criteria for strong competitor and short time frame. Please provide specific evidence of when and where this has occurred in the Canadian and/or Provincial wireless markets. Question #3 - for Rogers At paragraph 88 of its May 15, 2014 intervention Rogers states: below-the-counter sales discounting is also rampant in consumer sales channels where dealers have and exercise complete latitude to discount devices sold in conjunction with wireless plans. The resulting prices are not publicly posted anywhere. a) By making this assertion, Rogers suggest that it has knowledge of the existence of such offers. If that is the case, please provide any concrete evidence available to Rogers with regard to these plans and pricing practices. Question # 4 - for Rogers At paragraph 158 of its May 15, 2014 intervention Rogers states: Some [MVNOs] like Primus and Cityfone were acquired by Rogers as they could no longer compete independently after the AWS new entrants launched wireless services. a) While we have identified a transaction involving Rogers acquisition of Primus data unit Blackiron data, there is no news coverage of an acquisition involving mobile wireless services. Please clarify Rogers relationship with Primus in regard to the provision of mobile wireless services. ***END OF DOCUMENT*** cc Bell Mobility Telus Rogers MTS Sasktel Tbaytel 6 of 6