Before the Canadian Radio-Television and Telecommunications Commission in Review of Wholesale Mobile Wireless Services, CRTC 2014-76

Home , China Mobile

Before the Canadian Radio-television and Telecommunications Commission In Review of Wholesale Mobile Wireless Services, CRTC 2014-76

Before the Canadian Radio-television and Telecommunications Commission

CRTC 2017-259 Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

EXPERT REPORT OF JEFFREY A. EISENACH, PH.D. On Behalf of TELUS Communications Company

September 8, 2017

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

CONTENTS I. QUALIFICATIONS ...... 1 II. INTRODUCTION AND SUMMARY OF OPINIONS ...... 2 III. POLICY AND MARKET DEVELOPMENTS...... 6 A. Canada...... 7 B. United States ...... 10 C. Europe ...... 13 IV. PERFORMANCE OF THE CANADIAN MOBILE WIRELESS MARKET ...... 18 A. Innovation and Service Quality ...... 19 B. Revenues and Usage ...... 24 C. Factors Affecting Costs ...... 28 D. The Role of Competition ...... 34 V. THE NORDICITY REPORT, AFFORDABILITY AND ADOPTION ...... 38 A. The Nordicity Report’s Methodology Is Flawed and its Results Are Biased ...... 39 B. Affordability and Adoption...... 48 VI. CONCLUSIONS ...... 55

ANNEX A: CURRICULUM VITAE OF JEFFREY A. EISENACH, PH.D.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

EXPERT REPORT OF JEFFREY A. EISENACH, Ph.D.

I. Qualifications

1. My name is Jeffrey A. Eisenach. I am a Managing Director at NERA Economic Consulting

and Co-Chair of NERA’s Communications, Media, and Internet Practice. I am also an

Adjunct Professor at George Mason University Law School, where I teach Regulated

Industries, and a Visiting Scholar at the American Enterprise Institute, where I focus on

policies affecting the information technology sector, innovation, and entrepreneurship.

Previously, I served in senior policy positions at the US Federal Trade Commission and the

White House Office of Management and Budget and on the faculties of Harvard University’s

Kennedy School of Government and Virginia Polytechnic Institute and State University.

2. My practice focuses on the economic analysis of competition, regulatory, and consumer

protection issues. I have submitted expert reports and testified in litigation matters, as well

as in regulatory proceedings before the US Federal Communications Commission (FCC), the

US Federal Trade Commission (FTC), several state public utility commissions, and

regulatory bodies in Australia, Canada, the Caribbean and South America. I have also

testified before the US Congress on multiple occasions. I have appeared previously before

the CRTC on several occasions, including in its Review of Wholesale Mobile Wireless

Services (CRTC 2014-76).

3. I have written extensively on communications regulation and related issues. I am the author

or co-author of several books and monographs, including Broadband Competition in the

Internet Ecosystem, The Digital Economy Fact Book and The Telecom Revolution: An

American Opportunity, and I have edited or co-edited five books, including Communications

Deregulation and FCC Reform: What Comes Next? and Competition, Innovation and the

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Microsoft Monopoly: Antitrust in the Digital Marketplace. My articles have appeared in

peer-reviewed journals such as Communications and Strategies, Review of Network

Economics, and Telecommunications Policy, as well as in such popular outlets as Forbes,

Investor’s Business Daily and the Wall Street Journal.

4. Prior to joining NERA, I was a managing director and principal at Navigant Economics.

Before that, I served as Chairman of Empiris LLC, Criterion Economics, and CapAnalysis,

LLC. Among my other previous affiliations, I served as President and Senior Fellow at The

Progress & Freedom Foundation and a scholar at the Heritage Foundation and the Hudson

Institute. I received my Ph.D. in economics from the University of Virginia and my Bachelor

of Arts in economics from Claremont McKenna College. Annex A of this report contains my

curriculum vitae.

II. Introduction and Summary of Opinions

5. This report was prepared at the request of TELUS Communications Company (TELUS) in

response to the Canadian Radio-television and Telecommunications Commission’s (CRTC)

Telecom Notice of Consultation, CRTC 2017-259 (the Notice). I understand from

discussions with TELUS and my review of the Notice and related materials that the CRTC is

responding to the June 1, 2017 Order in Council (P.C. 2017-0557; the Order), in which the

Governor in Council referred Telecom Decision 2017-56 back to the Commission for

reconsideration. In this context, TELUS has requested that I assess the performance of the

Canadian mobile wireless market both in general terms and with specific reference to certain

issues raised in the Order and the Notice, including the concerns expressed in the Order

about mobile wireless prices, adoption and affordability, and the question raised in the Notice

regarding market competition (Question 8).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

6. I assess the overall performance of the Canadian market for mobile wireless services both by

looking at changes over time and by comparing the performance of the Canadian markets to

outcomes in the European Union (EU) and the United States (US). Previous studies have

found that the performance of the Canadian market generally compares favorably with that of

the EU, with higher rates of investment, faster speeds, higher quality services and greater

usage, but sometimes lags behind the US on these and similar metrics. Previous analyses

have also concluded that the superior performance of North American markets is attributable

at least in part to the relatively market-oriented policies traditionally pursued by Canadian

and US regulators.1

7. By and large, North American markets continue to outperform those in the EU, especially

when it comes to the availability and uptake of advanced LTE networks and associated

increase in usage of data-intensive services. By some measures, however – including the

level of capital spending on network infrastructure – the gap between North America and the

EU appears to be narrowing. While it is not possible to attribute this shift to any individual

change in policy, it has coincided with increasing regulatory intervention in the US and, to an

even greater extent, in Canada, where regulators have adopted wholesale price controls on

wireless roaming and continued to pursue policies designed to increase artificially the

number of mobile wireless providers. Thus, in my expert opinion, the superior market

performance Canadians have traditionally enjoyed may be at risk of deterioration as a result

of excessive regulation.

1 See e.g., Erik Bohlin, Kevin W. Caves and Jeffrey A. Eisenach, Mobile Wireless Performance in Canada: Lessons from the EU and the US (Navigant Economics, 2013) (hereafter “Bohlin et al 2014”); see also Jeffrey A. Eisenach, “Expert Report on Behalf of TELUS Communications Company,” Canadian Radio-television and Telecommunications Commission (“CRTC”), Review of Mobile Wireless Services (CRTC 2014-76) (May 15, 2014) (hereafter “Eisenach 2014”); and, Erik Bohlin, Kevin W. Caves and Jeffrey Eisenach, “Mobile Wireless Performance in the EU and the US: Implications for Policy,” Communications and Strategies 93 (2014).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

8. My specific findings include the following:

 Recent regulatory developments in Canada, including the adoption of a rate-regulated wholesale roaming regime and prohibition of many forms of zero rating, have significantly increased the stringency of the regulatory environment, creating barriers to innovation and disincentives for investment.

 Nevertheless, Canadians continue to benefit from the high levels of investment and innovation that have traditionally characterized Canadian mobile wireless market performance.

 For example:

 Canadian deployment of 4G LTE networks occurred at a much faster pace than in the EU and remains higher today: 97 percent of the Canadian population has access to 4G LTE networks, compared with 93 percent in the EU;

 In part as a result of this superior coverage, Canadians are nearly twice as likely as Europeans (62 percent vs. 34 percent) to connect to mobile wireless networks over LTE networks;

 Canadian LTE networks deliver some of the fastest average connection speeds in the world – smartphone connection speeds average over 24 Mbps, compared with 20 Mbps in France, 18 Mbps in the UK and 17 Mbps in the US;

 Canadians are much more likely that Europeans to own smartphones (75 percent to 63 percent);

 Canadians average 2.2 GB/month in data usage compared with 1.3 GB/month in the EU.

 The strong relative performance of the Canadian mobile wireless market is even more impressive when viewed in the context of cost-factors which place Canada at a distinct disadvantage. These factors include Canada’s extremely low population density, the relatively small size of Canadian mobile operators (and resulting lack of economies of scale), and high government-imposed costs. In particular, Canadian operators pay among some of the highest prices in the world for spectrum licenses.

 In response to Question 8 in the Notice, I find that the Canadian mobile wireless market is subject to vigorous competition.

 While structural measures of market concentration have little predictive value in dynamic markets like mobile wireless, it is nevertheless true that the Canadian market is among the least concentrated in the world, as measured by the Herfindahl- Hirschman Index (HHI), and that concentration is declining.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

 Growing output, declining prices, rapid innovation and extensive product differentiation and consumer choice in the Canadian mobile wireless market are inconsistent with the existence of monopoly power and instead indicate the presence of robust competition that forces suppliers to improve their offerings while cutting costs and lowering prices.

 The Nordicity Report,2 which purports to compare Canadian mobile wireless prices to those in other countries, suffers from fundamental methodological flaws and is systematically biased.

 The Nordicity Report openly acknowledges methodological limitations which, even taken at face value, invalidate its conclusions regarding comparative prices. Among these are that “the prices cited for Canada, the US or the international jurisdictions are not meant to be statistically representative,” and that it fails to consider differences in availability (i.e., coverage), quality (e.g., network speed), quantity (e.g., the amount of data consumed) and costs (e.g., population density).

 Virtually all of the factors which the Nordicity Report ignores result in biasing the study’s results against the Canadian market. The study simply ignores the fact that Canadians get more for their mobile broadband dollar than consumers in the low- price/low-performance European countries to which Canada is compared.

 Moreover, data on prices actually charged in Canada directly contradict the Nordicity Report’s findings. Simply put, the Nordicity Report’s finding that “Canadian Mobile Wireless Telephony prices are, on average, higher than those in other international jurisdictions” is factually unsupported, statistically invalid and economically meaningless.

 The available evidence fails to support, and in general contradicts, concerns about adoption and affordability.

 While some data sources report low rates of wireless adoption, those sources are biased by the fact that consumers in Europe and many developing countries own multiple SIM cards in order to avoid international roaming fees or (in developing countries) to take advantage of on-net discounts. Penetration rates in excess of 100 percent (which are reported for many countries) are not signs of an effectively competitive market.

 The evidence demonstrates that, even ignoring improvements in network speed and availability, prices for the services purchased by most consumers are falling rapidly.

2 2016 Price Comparison Study of Telecommunications Services in Canada and Select Foreign Jurisdictions (Nordicity for the Canadian Radio-television and Communications Commission, March 22, 2016) (hereafter “Nordicity Report”).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

 Data on low-cost mobile wireless plans currently available in the marketplace shows that the Nordicity Report overstates the prices for such plans by as much as 40 percent.

 International evidence on the rate of smartphone adoption by those with low incomes as compared with the more affluent shows that Canada is a leader, not a laggard in making high quality mobile broadband connections available to low income citizens.

9. The remainder of this report is organized as follows. Section III reviews recent policy and

market developments in Canada, the US and Europe. Section IV compares the performance

of the Canadian market to the US and the EU, showing that Canadian consumers benefit

from a high quality network with widespread coverage and fast connections, that Canadian

mobile carriers face high costs, especially as a result of low population density, and that there

is no basis for concluding that Canadian market performance suffers from insufficient

competition. Section V specifically addresses the Nordicity Report, explains that it does not

provide a foundation for concerns that the Canadian market is underperforming, and explains

more generally why concerns about adoption and affordability are unfounded and misplaced.

Section VI summarizes my conclusions.

III. Policy and Market Developments

10. The regulatory environments for wireless services in Canada, the US and Europe have

evolved significantly in recent years. In Canada, the level of intervention has increased

significantly. US regulators, after many years of “light-touch” regulation, veered briefly

towards a much more interventionist approach, though that trend is now being reversed. As

for the EU, proposals for more market-oriented policies and increased market integration

have for the most part not come to fruition, leaving European markets still the most regulated

of the three jurisdictions. This section briefly reviews the developments in each area.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

A. Canada

11. Since 2013, the Canadian Radio-television and Telecommunications Commission (CRTC)

has issued new regulations on the terms and conditions of mobile wireless contracts, created

a new and highly intrusive wholesale access regime, and moved to limit the use of “zero

rating” by mobile carriers.

12. In June 2013, the CRTC issued its Wireless Code, “a mandatory code of conduct for all

providers of retail mobile wireless voice and data services (wireless services).”3 In addition to

a variety of provisions designed to ensure consumers have full information about prices and

terms, the Wireless Code also includes provisions that regulate retail pricing practices, such

as limiting roaming fees (to $100 per billing cycle) and data overage charges (to $50 per

billing cycle without explicit customer consent), prohibits charging a service cancellation fee

beyond 24 months of a contract, and prohibits unlocking fees altogether.4 The new policy is

similar to the one put in place by the EU beginning in 2007.5

13. In May 2015 the CRTC imposed a wholesale roaming mandate, including regulated

wholesale prices, on the three national carriers (Bell, Rogers, and TELUS). The rules require

the three carriers to enter into roaming agreements with regional and new entrant carriers at

CRTC-determined prices.6 In contrast with the mobile roaming rules recently agreed upon in

3 See Telecom Regulatory Policy CRTC 2013-271, Canadian Radio-television and Telecommunications Commission (June 3, 2013) (available at http://www.crtc.gc.ca/eng/archive/2013/2013-271.htm). 4 See “The Wireless Code, Simplified,” Canadian Radio-television and Telecommunications Commission (hereafter “Wireless Code Simplified”) (available at http://crtc.gc.ca/eng/phone/mobile/codesimpl.htm). 5 “Digital Single Market – Access & Connectivity – Roaming,” European Commission (available at https://ec.europa.eu/digital-single-market/en/roaming). 6 Telecom Regulatory Policy CRTC 2015-177, Canadian Radio-television and Telecommunications Commission (May 5, 2015) (available at http://www.crtc.gc.ca/eng/archive/2015/2015-177.pdf). Spectrum license conditions imposed by Innovation, Science and Economic Development Canada also mandate roaming and are not limited to regional carriers and entrants. See Spectrum Management and Telecommunications Client Procedures Circular, CPC-2-0-17, “Conditions of License for Mandatory Roaming and Antenna Tower and Site Sharing and to

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

the EU, which apply only to roaming on networks outside the country of the subscriber’s

home network,7 the CRTC’s rules impose wholesale price regulation on domestic roaming.

14. In January 2015, the CRTC found that Bell Canada and Videotron violated subsection 27(2)

of the Telecommunications Act by exempting their mobile television offerings Bell Mobile

TV and illico.tv (respectively) from data charges (i.e., engaging in zero-rating). The decision

stated, “Bell Mobility and Videotron have given an undue preference in favour of subscribers

of their respective mobile TV services, as well as in favour of their own services, and have

subjected consumers of other audiovisual content services, and other services, to a

corresponding undue disadvantage.”8 Subsequently, the CRTC launched Telecom Notice of

Consultation 2016-192 examining differential pricing practices related to mobile wireless

data plans.9 In April 2017, the Commission issued Telecom Regulatory Policy CRTC 2017-

104, which placed significant limits on differential pricing by all ISPs, including WSPs.10

The rules are among the most restrictive in the western world. In issuing the decision, based

in part on the finding that differential pricing generally harms competition, the CRTC placed

Prohibit Exclusive Site Arrangements,” Industry Canada (March 2013) (available at http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf09081.html). 7 “End of Roaming Charges: EU Negotiators Agreed on Wholesale Prices, the Final Piece to Make it Happen,” European Commission (February 1, 2017) (available at http://europa.eu/rapid/press-release_IP-17- 193_en.htm). 8 See Broadcasting and Telecom Decision CRTC 2015-26, Canadian Radio-television and Telecommunications Commission (January 29, 2015) (available at http://www.crtc.gc.ca/eng/archive/2015/2015- 26.htm). 9 See Telecom Notice of Consultation CRTC 2015-192, Canadian Radio-television and Telecommunications Commission (May 18, 2016) (available at http://www.crtc.gc.ca/eng/archive/2016/2016- 192.htm). 10 See Telecom Regulatory Policy CRTC 2017-104, Canadian Radio-television and Telecommunications Commission (April 20, 2017) (available at http://crtc.gc.ca/eng/archive/2017/2017-104.htm).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

itself at odds with regulators in most other jurisdictions, which have generally found that

differential pricing is, in most circumstances, pro-competitive.11

15. Canadian regulators also continue to see mergers as vehicles for regulatory intervention. For

example, when Rogers Communications purchased bankrupt entrant Mobilicity in June 2015

(while at the same time acquiring spectrum from Shaw Communications),12 regulators agreed

to approve the deal based on Rogers’ agreement to divest significant amounts of spectrum to

another entrant, WIND.13 Having agreed to the divestiture, Rogers received swift approval

from Innovation, Science and Economic Development Canada and the Competition Bureau.14

16. Similarly, when Bell Canada sought to purchase Manitoba Telecom Services (MTS) in

2016,15 it voluntarily offered to divest approximately one-third of MTS’ post-paid subscribers

to TELUS. 16 In order to obtain regulatory approval, however, the Competition Bureau

insisted on additional requirements, including the transfer of spectrum and 24,700 wireless

11 See e.g., Zero-Rating Practices in Broadband Markets, European Commission (February 2017) (available at http://www.dotecon.com/assets/images/kd0217687enn.pdf) (hereafter Zero-Rating Practices). 12 See “Rogers Inks Deals to Immediately Boost Speed and Quality for Wireless Customers in BC, Alberta and Southern Ontario,” Rogers (June 24, 2015) (hereafter “Rogers-Mobilicity Press Release”) (available at http://about.rogers.com/cnwposts/rogers-inks-deals-to-immediately-boost-speed-and-quality-for-wireless-customers- in-bc-alberta-and-southern-ontario/). 13 See Rogers-Mobilicity Press Release. See also Christina Pellegrini, “The Inside Story of How Rogers Communications Inc Acquired Mobilicity: ‘Everybody Won but TELUS’,” Financial Post (July 10, 2015) (available at http://business.financialpost.com/fp-tech-desk/how-rogers-blindsided-telus-by-acquiring-mobilicity). 14 See Christina Pellegrini “Rogers Communications Inc Gets Green Lights on Mobilicity Deal from Courts,” Financial Post (June 25, 2015) (available at http://business.financialpost.com/fp-tech-desk/rogers- communications-inc-gets-green-lights-on-mobilicity-deal?__lsa=f6b8-22ff). 15 See “BCE Announces Agreement to Acquire Manitoba Telecom Services (MTS),” BCE News Releases (May 2, 2016) (available at http://www.bce.ca/news-and-media/releases/show/BCE-announces-agreement-to- acquire-Manitoba-Telecom-Services-MTS--1?page=1&month=&year=). 16 See “BCE to Sell a Portion of MTS Wireless Subscribers and Assign Certain Dealer Locations to TELUS,” BCE News Releases (May 2, 2016) (available at http://www.bce.ca/news-and-media/releases/show/BCE- to-sell-a-portion-of-MTS-wireless-subscribers-and-assign-certain-dealer-locations-to-TELUS-1).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

customers to Xplornet Communications as well as the provision of operational services to

Xplornet in Manitoba on an interim temporary basis.17

17. The conditions placed on both transactions demonstrate the continued determination of

Canadian policymakers to increase the number of competitors in the marketplace – despite,

as discussed further below, the absence of evidence that doing so increases market

performance or benefits consumers.

B. United States

18. In recent years, regulatory policy in the US has also moved generally in the direction of

greater intervention, but nevertheless has remained significantly more market oriented than in

either Canada or the EU.

19. First, unlike Canada and the EU, the US does not regulate retail roaming fees (unlike the

EU), overage fees (unlike in Canada, where fees are subject to a cap), or other contract terms.

US carriers operate under a voluntary consumer code created by the Cellular

Telecommunications Industry Association (CTIA) that does not regulate rates or fees.18

20. Wholesale roaming is also only lightly regulated in the US. While the FCC requires that

mobile wireless carriers enter into commercial roaming agreements upon “reasonable

request,” 19 and to do so on “commercially reasonable” rates and terms, 20 it does not set

17 See “Bell Acquisition of MTS receives final regulatory approvals from ISED and Competition Bureau, Transaction Set to Close on March 17,” Bell Canada (February 15, 2017) (available at http://www.bce.ca/news-and- media/releases/show/Bell-acquisition-of-MTS-receives-final-regulatory-approvals-from-ISED-and-Competition- Bureau-transaction-set-to-close-on-March-17-1). 18 “Consumer Code for Wireless Service,” CTIA (available at http://ctia.org/initiatives/voluntary- guidelines/consumer-code-for-wireless-service). For a list of carriers and industry participants that are members of the CTIA see “Our Members,” CTIA (available at http://ctia.org/about/our-members). 19 See In the Matter of Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers, WT Docket No. 05-265, “Report and Order and Further Notice of Proposed Rulemaking,” Federal Communications Commission (August 16, 2007) at ¶5 (available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-07-143A1.pdf).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

specific caps on the rates charged nor dictate the specific terms of roaming contracts among

carriers. In adopting its 2011 roaming Order, the FCC specifically found “there are pro-

competitive benefits that flow from providers differentiating themselves on the basis of

coverage in their licensed service areas, including in rural and remote areas,” emphasized

that the commercial reasonableness standard “will give host providers appropriate discretion

in the structure and level of such rates that they offer,” and found that “the relatively high

price of roaming” that would result from its light-touch approach would “often be sufficient

to counterbalance the incentive to ‘piggy back’ on another carrier's network.”21 As discussed

in the Expert Report of Dr. Chris Dippon, public Wi-Fi providers do not have access to

mandated roaming in the US.

21. The most significant recent regulatory developments in the US have revolved around the

FCC’s issuance, in February 2015, of its Open Internet Order, which declared both wireline

and wireless broadband services to be “telecommunications services” subject to common

carrier regulation under Title II of the Communications Act.22 The rule was challenged in

court by broadband providers, and while initially upheld23 may face review by the Supreme

Court.24 Shortly after being appointed, current FCC Chairman Ajit Pai announced plans to

20 See In the Matter of Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers and Other Providers of Mobile Data Services, WT Docket No. 05-265, “Second Report and Order,” Federal Communications Commission (April 7, 2011) (available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-11-52A1.pdf). 21 Ibid. at ¶21. 22 In the Matter of Protecting and Promoting the Open Internet, GN Docket No. 14-28, “Report and Order on Remand, Declaratory Ruling, and Order,” Federal Communications Commission (February 26, 2015) 5607-5610 (available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-24A1_Rcd.pdf). 23 United States Telecom Association, et al. v. Federal Communications Commission and United States of America, DC Cir., No. 15-1063 (June 14, 2016) at 8 (hereafter “USTA v. FCC (2016)”) (available at https://apps.fcc.gov/edocs_public/attachmatch/DOC-339799A1.pdf). 24 Brian Fung, “The Future of Net Neutrality in Trump’s America,” Washington Post (April 5, 2017) (available at https://www.washingtonpost.com/news/the-switch/wp/2017/04/05/the-future-of-net-neutrality-in- trumps-america/?utm_term=.c6dc49fc4ff2).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

review the rule, 25 and on April 27, 2017 the Commission issued a Notice of Proposed

Rulemaking to reverse the prior rule’s reclassification of broadband services as a common

carrier service.26

22. Even under the prior administration’s more regulatory approach, however, the Open Internet

Order was not used to prohibit “zero rating” practices. While the prior Administration

conducted an investigation into a variety of zero rating programs, and expressed concerns

about some of them, it chose to forbear from actual regulation.27 On February 3, 2017,

Chairman Pai announced that he was closing the FCC’s investigation into such practices,

explaining that “free-data plans have proven to be popular among consumers, particularly

low-income Americans, and have enhanced competition in the wireless marketplace.” 28

Shortly thereafter, AT&T and Verizon joined Sprint and T-Mobile in offering unlimited data

plans, which obviate concerns about “differential pricing” by effectively “zero rating” all

forms of mobile data.29

23. US regulators have recently taken a relatively interventionist approach to consolidation. In

2011, the FCC and Department of Justice (DOJ) denied AT&T’s effort to acquire T-Mobile

25 USTA v. FCC (2016) at 29; John McKinnon, “FCC Shift on Net Neutrality Is Readied,” Wall Street Journal (April 7, 2017) (available at https://www.wsj.com/articles/fcc-chief-ajit-pai-develops-plans-to-roll-back-net- neutrality-rules-1491527590). 26 In the Matter of Restoring Internet Freedom, WC Docket No. 17-108, “Notice of Proposed Rulemaking,” Federal Communications Commission (April 27, 2017) (available at https://apps.fcc.gov/edocs_public/attachmatch/DOC-344614A1.pdf). 27 “Wireless Telecommunications Bureau Report: Policy Review of Mobile Broadband Operators’ Sponsored Data Offerings for Zero-Rated Content and Services,” Federal Communications Commission (January 11, 2017) (available at http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0111/DOC-342982A1.pdf). 28 “Chairman Statement on Free Data Programs,” Federal Communications Commission (February 3, 2017) (available at https://apps.fcc.gov/edocs_public/attachmatch/DOC-343345A1.pdf). 29 See “Get Unlimited Data on the Network you Deserve: Verizon,” Verizon (February 12, 2017) (available at http://www.verizon.com/about/news/get-unlimited-data-network-you-deserve-verizon); see also “AT&T Expands Access to Unlimited Data,” AT&T (February 16, 2017) (available at http://about.att.com/story/att_expands_access_to_unlimited_data.html).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

after a lengthy and contentious review. 30 Three years later, in 2014, Sprint (owned by

Softbank) announced plans to acquire T-Mobile, but abandoned the effort after then-FCC

Chairman Wheeler indicated he would oppose the deal.31 However, during the same period,

the agencies signed off on several smaller acquisitions, including the combination of T-

Mobile and MetroPCS in 2013 and AT&T’s acquisition of Leap Wireless in 2014. Both

mergers were approved without significant delays or overly burdensome conditions.32 As

with net neutrality regulation, it is widely expected that the trend will now swing towards a

less interventionist approach when it comes to consolidation, though any proposed

transaction will still be scrutinized under traditional competition standards.

C. Europe

24. Over the past few years, European regulatory authorities have enacted significant new

regulatory burdens on the mobile wireless market, effectively maintaining the EU’s position

as the most heavily regulated of the three jurisdictions. As explained further in the Expert

Report of Dr. Serentschy, excessive regulation in Europe has harmed investment and

innovation.

30 Michael de la Merced, “AT&T Ends $39 Billion Bid for T-Mobile,” New York Times (December 19, 2011) (available at https://dealbook.nytimes.com/2011/12/19/att-withdraws-39-bid-for-t-mobile/). 31 James O’Toole, “FCC Chief Says No to Mobile Mergers,” CNN Tech (September 9, 2014) (available at http://money.cnn.com/2014/09/09/technology/fcc-mobile-ctia-wheeler/). On US merger policy in high-tech industries, see Jeffrey A. Eisenach, “US Merger Enforcement in the Information Technology Sector,” in Roger Blair and Daniel Sokol, eds., Handbook of Antitrust, Intellectual Property and High Tech (Cambridge University Press, 2017) 445-466 (hereafter “Eisenach 2017”). 32 See In the Matter of Applications of Deutsche Telekom AG, T-Mobile USA, Inc., and MetroPCS Communications, Inc., For Consent to Transfer of Control of Licenses and Authorizations, WT Docket No. 12-301, “Memorandum Opinion and Order and Declaratory Ruling,” Federal Communications Commission (March 12, 2013) (available at https://apps.fcc.gov/edocs_public/attachmatch/DA-13-384A1.pdf) and In the Matter of Applications of Cricket License Company, LLC, et al., Leap Wireless International, Inc., and AT&T Inc. for Consent To Transfer Control of Authorizations, WT Docket No. 13-193, “Memorandum Opinion and Order,” Federal Communications Commission (March 13, 2014) (available at https://apps.fcc.gov/edocs_public/attachmatch/DA-14- 349A1.pdf). See also Eisenach 2014 at ¶59.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

25. The European Union has adopted multiple regulations to cap international wireless roaming

rates. Effective June 15, 2017, the EU prohibited all carriers from charging retail

international roaming fees altogether. 33 Additionally, as noted above, the EU has also

recently established wholesale roaming rate caps on international roaming for all carriers

operating within the EU. 34 Beginning June 15, 2017, wholesale roaming rates for

international roaming were set at 3.2 cents per minute of voice and 1 cents per SMS.

Additionally, data caps will decline over a five year span from €7.7 per GB to €2.5. In sharp

contrast with Canada, however, domestic wholesale roaming rates are not generally regulated

in the EU.35

26. In November 2015 the European Parliament adopted EU-wide net neutrality rules, which

apply as of April 30, 2016. The regulation generally grants a right for users to access the

information and use the applications and devices of their choice, 36 but gives National

Regulatory Authorities (NRAs) a certain amount of discretion in enforcing the rules.37 The

bounds of that discretion were tested in a Netherlands court in early 2017. The court found

33 “Digital Single Market – Access & Connectivity – Roaming Tariffs,” European Commission (available at https://ec.europa.eu/digital-single-market/en/roaming-tariffs). 34 “End of Roaming Charges: EU Negotiators Agreed on Wholesale Prices, the Final Piece to Make it Happen,” European Commission (February 1, 2017) (available at http://europa.eu/rapid/press-release_IP-17- 193_en.htm). 35 In isolated cases, national regulatory authorities have imposed roaming requirements on a targeted and/or temporary basis, such as in connection with certain spectrum auctions. See OECD, Digital Economy Outlook 2015 (OECD Publishing, 2015) at 202. 36 See Regulation (EU) 2015/2120 of the European Parliament and of the Council (November 25, 2015) at 8 (available at http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32015R2120&from=EN). 37 In August 2016 the Body of European Regulators for Electronic Communications (BEREC) issued guidelines designed to promote consistency. See BEREC Guidelines on the Implementation by National Regulators of European Net Neutrality Rules (August 30, 2017) (available at http://berec.europa.eu/eng/document_register/subject_matter/berec/regulatory_best_practices/guidelines/6160- berec-guidelines-on-the-implementation-by-national-regulators-of-european-net-neutrality-rules).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

that the Netherlands’ ban on zero rating violated the EU’s net neutrality rules.38 A recent

study for the European Commission found that more than half of European mobile network

operators offer some form of zero-rating plan.39 Thus, the EU’s approach to zero-rating is

significantly less interventionist than Canada’s.

27. Despite public statements by European regulators acknowledging the need for industry

consolidation, as a practical matter they have not hesitated to block mergers or, for those they

approve, to impose significant conditions, often including divestitures to new entrants

designed –as in Canada – to artificially increase the number of competitors.

28. As shown in Table 1, there have been six major proposed mobile wireless mergers in Europe

since 2012, five of which would reduce the number of national mobile network operators

from four to three. Of these six, the European Commission blocked two: TeliaSonera and

Telenor in Denmark and Three (Hutchison) and O2 (Telefónica) in the UK.

38 See “Dutch Court Strikes Down Ban on ‘Zero Rating’ – a Win for Uncapped Music Streaming,” Lexology (May 31, 2017) (available at http://www.lexology.com/library/detail.aspx?g=68740ef8-61e0-44d7-ba27- 900d1cde3870). 39 See Zero-Rating Practices at 11.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Table 1: European Mobile Wireless Transactions (2012-Present)40 Transaction Year CountryConsolidation Outcome Three/Orange 2012-2013 Austria Four-to-Three Approved Three/O2 2013-2014 Ireland Four-to-Three Approved Telefónica/E-Plus 2013-2014 Germany Four-to-Three Approved TeliaSonera/Telenor 2014-2015 Denmark Four-to-Three Withdrawn Three/O2 2015-2016 UK Four-to-Three Disapproved Three/Wind 2015-2016 Italy Four-to-Four Approved

29. The proposed merger of Three and O2 in the UK is a good example of EU regulators’

aversion to consolidation. In 2016 the European Commission rejected the merger, arguing

that it would decrease competition in the UK market. Three proposed remedies to address

these concerns, but the Commission did not find them sufficient.41

30. As noted, the Commission imposes significant regulation and conditions on mergers that are

approved. For example, the approved joint venture of Three and Wind (VimpelCom) was

40 Christos Genakos, Tommaso Valletti, and Frank Verboven, "Evaluating Market Conditions in Mobile Communications," Centre on Regulation in Europe (September 15, 2015) at 30 (available at http://cerre.eu/sites/cerre/files/150915_CERRE_Mobile_Consolidation_Report_Final.pdf); "Mergers: Commission Clears Acquisition of Austrian Mobile Phone Operator Orange by H3G, Subject to Conditions," European Commission (December 12, 2012) (available at http://europa.eu/rapid/press-release_IP-12-1361_en.htm); European Commission Decision, Case No. COMP/M.6992 – Hutchison 3G UK / Telefónica Ireland (May 28, 2014) at 51-52, 211-212 (available at http://ec.europa.eu/competition/mergers/cases/decisions/m6992_20140528_20600_4004267_EN.pdf); Kevin O'Brien, "Telefónica to Buy E-Plus of Germany from KPN," New York Times (July 23, 2013) (available at http://dealbook.nytimes.com/2013/07/23/telefonica-to-buy-germanys-e-plus-from-kpn/?_r=1); "Mergers: Commission Clears Acquisition of E-Plus by Telefónica Deutschland, Subject to Conditions," European Commission (July 2, 2014) (available at http://europa.eu/rapid/press-release_IP-14-771_en.htm); Chad Bray, "Telenor and TeliaSonera Call Off Merger of Danish Operations," New York Times (September 11, 2015) (available at http://www.nytimes.com/2015/09/12/business/dealbook/telenor-teliasonera-call-off-merger.html); Foo Yun Chee, "EU Regulators to Block Telefónica's Sale of O2 UK to Hutchison: Sources," Reuters (April 25, 2016) (available at http://www.reuters.com/article/us-telefonica-m-a-ckh-holdings-eu-idUSKCN0XM1WZ); "Mergers: Commission Prohibits Hutchison's Proposed Acquisition of Telefónica UK," European Commission (May 11, 2016) (available at http://europa.eu/rapid/press-release_IP-16-1704_en.htm); Daniele Lepido, Ilya Khrennikov, and Elco van Groningen, "Hutchison, VimpelCom to Merge Italy Assets in $24 Billion Deal," Bloomberg (August 6, 2015) (available at http://www.bloomberg.com/news/articles/2015-08-06/vimpelcom-hutchison-agree-to-merge-italian- mobile-phone-units); "Mergers: Commission Approves Hutchison/VimpelCom Joint Venture in Italy, Subject to Conditions," European Commission (September 1, 2016) (available at http://europa.eu/rapid/press-release_IP-16- 2932_en.htm). 41 Mergers: Commission Prohibits Hutchison's Proposed Acquisition of Telefónica UK," European Commission (May 11, 2016) (available at http://europa.eu/rapid/press-release_IP-16-1704_en.htm).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

required to divest enough assets for a new fourth mobile network operator (MNO), Iliad, to

enter the market.42

31. To receive approval for the German merger of Telefónica and E-Plus, the merged company

had to commit to divest up to 30 percent of its network capacity to up to three mobile virtual

network operators (MVNOs), divest spectrum to a new MNO or the MVNOs that bought

network capacity, and extend existing wholesale agreements and offer wholesale 4G services

to all interested parties in the future.43 The merged entity of Three and O2 in Ireland was

required to divest up to 30 percent of its network capacity to two MVNOs and to offer to

continue the network sharing agreement between Eircom and O2 on improved terms.44 For its

purchase of Orange in Austria, Three had to commit to divest spectrum to a new mobile

network operator (an “interested new entrant”) in the Austrian mobile telephony market and

to provide wholesale access for up to 30 percent of its network capacity to up to sixteen

MVNOs.45

32. To summarize, mobile markets in the European Union remain much more heavily regulated

than those in the US. Canadian regulation has traditionally fallen somewhere in the middle,

but in recent years has moved in a more interventionist direction. Specifically, Canadian

roaming regulation has moved towards the more intervention approach of the European

42 "Mergers: Commission Approves Hutchison/VimpelCom Joint Venture in Italy, Subject to Conditions," European Commission (September 1, 2016) (available at http://europa.eu/rapid/press-release_IP-16-2932_en.htm). 43 "Mergers: Commission Clears Acquisition of E-Plus by Telefónica Deutschland, Subject to Conditions," European Commission (July 2, 2014) (available at http://europa.eu/rapid/press-release_IP-14-771_en.htm). 44 “Mergers: Commission Clears Acquisition of Telefónica Ireland by Hutchison 3G, Subject to Conditions,” European Commission (May 28, 2014) (available at http://europa.eu/rapid/press-release_IP-14- 607_en.htm). 45 “Mergers: Commission Clears Acquisition of Austrian Mobile Phone Operator Orange by H3G, Subject to Conditions,” European Commission (December 12, 2012) (available at http://europa.eu/rapid/press-release_IP- 12-1361_en.htm).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Union, and Canada’s approach to net neutrality has placed it outside the regulatory

mainstream.

IV. Performance of the Canadian Mobile Wireless Market

33. Mobile wireless markets are characterized by dynamic competition, in which firms offer

highly differentiated and constantly changing sets of products,46 and compete on the basis of

innovation and service quality as well as price. Such markets are also characterized by

economies of scale and scope, such that larger firms offering broader packages of services

are able to meet diverse customer demands at lower cost. Costs can also be affected by

market conditions, including weather, topography and population density.

34. All of these factors complicate the task of assessing market performance both over time and

across jurisdictions. For example, economists are still struggling to develop effective ways of

adjusting price indices to reflect improvements in product quality and functionality.

Especially in industries like mobile wireless which are experiencing rapid technological

progress, it is generally agreed that inflation-adjusted prices overstate inflation (or understate

the rate at which prices are falling).47 Comparisons across jurisdictions are also problematic

for a number of reasons, including differences in usage patterns, product characteristics,

underlying factors affecting costs and, where prices are concerned, exchange rates.

35. With these qualifications in mind, this section presents data relevant to assessing the

performance of the Canadian mobile wireless market. The first section focuses on quality and

innovation – i.e., the extent to which Canadians have access and utilize the most

46 For example, I understand from TELUS that it currently offers 48 plans on its web site and that there are many more plans available to customers who call in. The wide variety of plans available to consumers is evidence of vigorous competition, as carriers seek to offer plans that best meet the differentiated needs of customers in order to win and retain subscribers. 47 See e.g., Martin Feldstein, “Underestimating the Real Growth of GDP, Personal Income, and Productivity,” Journal of Economic Perspectives 31;2 (Spring 2017) at 145-164.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

technologically advanced networks and services. The next section reviews information on

output (i.e., usage) and revenues. The third section looks at factors affecting costs, including

capital spending, the ability to exploit economies of scale, and the effects of population

density. Finally, the fourth section discusses industry structure and competition and explains

why the evidence demonstrates that the Canadian market is highly competitive. Taken

together, the data show that Canadians benefit from one of the most technologically

advanced mobile wireless ecosystems in the world, with high levels of adoption and usage,

and prices which reflect a highly competitive marketplace.

A. Innovation and Service Quality

36. The most salient measures of mobile wireless market performance relate to the pace of

innovation and the increasing quality of service that results. Indeed, it is widely agreed that

the pace of mobile network innovation – ultimately embodied in the pace of adoption of

successive generations of technology – has a significant impact on a nation’s overall

economic growth and prosperity.48 It is significant, therefore, that Canadian mobile networks

have been at the forefront of innovation.

37. As shown in Figure 1, higher rates of investment in North America have led to a more rapid

pace of LTE deployment than in the European Union. In 2012, only about 19 percent of the

European homes were covered by LTE, compared with 57 percent for Canada and 77 percent

for the US. Although the gap has decreased, the EU has still not caught up to North America:

48 See e.g., Michael Minges, Exploring the Relationship Between Broadband and Economic Growth, World Bank (January 2015) (available at http://pubdocs.worldbank.org/en/391452529895999/WDR16-BP-Exploring-the- Relationship-between-Broadband-and-Economic-Growth-Minges.pdf); see also Chris Williams et al, The Economic Impact of Next-Generation Mobile Services: How 3G Connections and the Use of Mobile Data Impact GDP Growth, Deloitte (2013) (available at http://www3.weforum.org/docs/GITR/2013/GITR_Chapter1.6_2013.pdf).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

In 2016, 97 percent of Canadians and 99 percent of Americans had LTE coverage, compared

with 93 percent of Europeans.

Figure 1: 4G LTE Coverage (2012–2016) 120 Canada US EU

98 99 97 99 100 95 95 93 85 85 80 77 76 70

60 57 48

40 Population Covered Population (%) 19 20

0 2012 2013 2014 2015 2016

Source: GSMA Intelligence. Note: Figures show the four quarter average of 4G LTE coverage for each year.

38. Not surprisingly given the greater availability of LTE networks in North America, the uptake

of LTE services in the US and Canada has outpaced uptake in the EU. As shown in Figure 2,

as of the end of 2016, about 62 percent of US and Canadian wireless connections were on

LTE networks compared with less than 34 percent in the EU. As the figure shows, the LTE

gap between the US and Canada, on the one hand, and the EU, on the other, has persisted

since 2012; and, while Canada initially lagged slightly behind the US, in 2015 the proportion

of connections on LTE networks in Canada caught up to the US.49

49 See Ericsson Mobility Report, Ericsson (June 2017) at 9 (available at https://www.ericsson.com/assets/local/mobility-report/documents/2017/ericsson-mobility-report-june-2017.pdf) (showing 70 percent of North American mobile subscriptions in 2016 were LTE enabled compared with less than 40

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Figure 2: LTE Connections as Percentage of Connections (2012–2016) 70

Canada 62 62 60 US 54 54 EU 50 44 41 40 34

30 28 23 23

12 12 LTE Connections as % Connections (%) % Connections as Connections LTE 10 9 3 0 0 2012 2013 2014 2015 2016

Source: GSMA Intelligence. Note: Figures show LTE Connections as a percentage of all connections for the fourth quarter of each year.

39. The more advanced deployment of LTE networks in North America has resulted in faster

average connection speeds. As seen in Figure 3, Cisco reports that the average smartphone

connection speed in Canada in 2016 was 24.2 Mbps, the highest of all countries surveyed. A

recent report by OpenSignal affirms this result, finding that the average LTE connection

speed in the first quarter of 2017 was 30.6 Mbps in Canada compared with 22.7 Mbps in the

UK and 15.0 Mbps in the US.50

percent in Western Europe and less than 20 percent in Eastern and Central Europe); and Martin Masse and Paul Beaudry, “The State of Competition in Canada’s Telecommunications Industry – 2016,” MEI (May 2016) at 9 (available at http://www.iedm.org/files/cahier0116_en.pdf). 50“The State of LTE,” OpenSignal (June 2017) (available at https://opensignal.com/reports/2017/06/state- of-lte?pdf).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Figure 3: Average Smartphone Connection Speed (2016) 30

25 24.2 22.8

19.5 20.1 20 18.2 18.6 17.1 17.3

10.3 10 Average Connection Speed (Mbps) Speed Connection Average 5

0 Italy US Germany UK Spain France Sweden Rest of Canada Western Europe

Source: “VNI Mobile Forecast Highlights, 2016-2021,” Cisco (available at http://www.cisco.com/assets/sol/sp/vni/forecast_highlights_mobile/#~Country).

40. Given the greater availability of LTE networks and more rapid connection speeds, it is also

not surprising that North American consumers are more likely to own smartphones than their

EU counterparts. As shown in Figure 4, as of 2016, 75 percent of Canadian mobile wireless

subscribers (and 76 percent of US subscribers) used smart phones, compared with 63 percent

in the EU.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Figure 4: Smartphone Adoption by Jurisdiction (2012-2016) 90 Canada

80 US 75 76 73 75 EU 69 70 67 63 59 60 60 56 49 50 48 48

40 37 31 30 Smartphone Adoption (%) Smartphone Adoption 20

0 2012 2013 2014 2015 2016

Source: GSMA Intelligence. Note: Figures show the four quarter average of smartphone adoption for each year.

41. The more intensive usage of mobile data services in North America as compared with the EU

is directly reflected in the overall health of the mobile wireless ecosystem, which includes the

markets for content, applications, and devices. For example, as shown in Figure 5, North

America leads the world in mobile advertising revenue, which in turn supports free mobile

content and contributes to the growth of the entire ecosystem.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Figure 5: Mobile Advertising Revenue per Subscriber (by Region, 2014-2015)

Source: GSMA Intelligence; Global Mobile Advertising Revenue 2015, The State of Mobile Advertising Around the World, IAB and IHS (September 2016) (available at http://www.iab.it/wp-content/uploads/2016/09/IAB-Europe_Global-Mobile- Advertising-Revenue-report-2015_September-2016.pdf); Yearly Average Currency Exchange Rates, IRS (available at https://www.irs.gov/individuals/international-taxpayers/yearly-average-currency-exchange-rates).

B. Revenues and Usage

42. Consumption of mobile wireless services is growing rapidly throughout the world, especially

in terms of the amount of data consumed.51 Growth in data usage is highly correlated with

technology: the dramatically faster download (and upload) speeds associated with 4G LTE

networks have led to rapid increases in data usage compared with 3G networks,52 as has the

spread of 4G enabled smartphones and other wireless devices such as tablets. Thus,

51 Ericsson Mobility Report, Ericsson (June 2017) at 2 (available at https://www.ericsson.com/assets/local/mobility-report/documents/2017/ericsson-mobility-report-june-2017.pdf). 52 Globally, the average connection speeds for LTE networks are 16.2 Mbps, compared with just 4.4 Mbps for 3G networks. See “The State of LTE,” OpenSignal (June 2017) (available at https://opensignal.com/reports/2017/06/state-of-lte?pdf).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

differences in data consumption across markets are a powerful indicator of market

performance.53

43. As shown in Figure 6, while data usage per mobile-connected end-user device is highest in

the US, data show that Canadian mobile wireless customers use over 60 percent more data

per connection than Europeans.

Figure 6: Megabytes of Data Traffic per Mobile-Connected End-User Device per Month (2015-2016)

Source: “VNI Mobile Forecast Highlights, 2016-2021,” Cisco (available at http://www.cisco.com/assets/sol/sp/vni/forecast_highlights_mobile/#~Country). Note : Europe includes Andorra, Austria, Belgium, Cyprus, Denmark, Faroe Islands, Finland, France, Germany, Gibraltar, Greece, Greenland, Holy See (Vatican City State), Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Malta, Monaco, Netherlands, Norway, Portugal, San Marino, Spain, South Georgia and the South Sandwich Islands, Svalbard and Jan Mayen, Sweden, Switzerland and the United Kingdom.

53 Measures of output are especially powerful indicators of market performance in markets with differentiated products and difficult-to-measure prices. See e.g., Robert W. Crandall, Jeffrey A. Eisenach and Allan T. Ingraham, “The Long-Run Effects of Copper Loop Unbundling and the Implications for Fiber,” Telecommunications Policy 37 (2013) 262-281 at 266.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

44. These higher rates of data usage are highly correlated with average monthly spending

(“average revenue per unit,” or “ARPU”). As shown in Figure 7, consumers in Canada and

the US spend more per month on mobile wireless services than consumers in Europe.

Figure 7: Monthly Mobile Revenue per Subscriber (Q4 2016) $70

58 $60 56 53

$50 45 40 $40 3738 34 32 30 $30 2627272728 24252526 21222223 192021 $20 17 11121213

Monthly Revenue perMonthly Subscriber $10

$0 US EU UK Italy Spain Malta Latvia France Poland Greece Ireland Cyprus Croatia Austria Estonia Canada Finland Sweden Portugal Bulgaria Belgium Hungary Slovakia Slovenia Romania Germany Denmark Lithuania Netherlands Luxembourg

Czech Republic Source: GSMA Intelligence.

45. Revenues are, by definition, not a measure of price, and they are even less a measure of

quality-adjusted price. The revenue per subscriber figures in Figure 7 fail to take into account

differences in usage (“quantity”), but also ignore differences in network quality, coverage

and a multitude of other factors that affect demand (i.e., the value received by consumers)

and supply (i.e., the costs of providing service). Those factors vary significantly across

countries in predictable ways: Countries in which carriers offer more capable, higher quality

services and where consumers use mobile services more intensively tend to have higher

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

levels of spending on mobile services than countries with less advanced networks and lower

levels of use.

46. One example of this relationship is depicted in Figure 8 below, which shows the proportion

of connections occurring on LTE networks and average revenue per subscriber for Canada,

the EU and the US. As indicated by the trend line, there is a strong (if far from perfect)

relationship between ARPU and LTE penetration, with countries having the lowest revenues

also being more likely to still be relying on 3G networks. The figure also shows that the US

and Canada both lie well above the trend line – that is, both enjoy higher rates of LTE

penetration than would be predicted based on what consumers pay per month.

Figure 8: Percentage of LTE Connections and Revenues per Subscriber (Q4 2016) 70% US Canada 60%

50%

40% EU Average

30%

20%

10%

0% $10 $20 $30 $40 $50 $60

Source: GSMA Intelligence.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

C. Factors Affecting Costs

47. As noted above, mobile wireless market performance is also affected by underlying cost

factors, including the level of capital expenditures, the ability to exploit economies of scale,

underlying cost factors such as population density, and cost factors driven by government

regulations.

48. Historically, Canadian and US mobile operators have invested more heavily in their networks

(as measured on a per connection basis) than those in the EU. While there is no question that

these high levels of investment have paid off in the rapid pace and extent of LTE deployment

and associated high levels of network performance detailed above, they also reflect the

higher cost of building mobile wireless networks in Canada relative to more densely

populated, less topographically challenging countries.

49. As seen in Figure 9, wireless carriers in Canada invested approximately $75 per connection

in 2016, less than in the US ($103), but well above the $44 per connection spent by EU

carriers. Over the past five years, Canadian carriers have invested an average of $80 per

connection, compared with $43 per connection per year in Europe. However, the data also

show a significant drop in Canadian investment for 2016, declining by nearly 25 percent

from its 2015 level (and about seven percent below 2014). Investment in the US also

declined from 2015 to 2016, and there is growing evidence that the decline in the US was

attributable to increased regulation, including specifically the FCC’s 2015 decision to declare

mobile broadband to be a “Title II” service subject to common carrier-style regulation.54

54 See e.g., Anna-Maria Kovacs, The Effect of Title II Classification on Wireless Investment, Georgetown Center for Business and Public Policy (July 2016) (available at http://cbpp.georgetown.edu/sites/cbpp.georgetown.edu/files/Kovacs%20- %20Title%20II%20and%20wireless%20investment.pdf).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Despite these declines, investment in both Canada and the US remained well above the EU in

2016.

Figure 9: Wireless Capex per Connection in Canada, EU and US (2010-2016)

$120 $113 Canada $109 $105 EU $103 $100 US $97 $99 $79 $80 $75 $78 $81 $75 $75 $71 $60 $64 $44 $47 $42 $44 $37 $40 $36 $31 Capex perCapex Connection(USD)

$20

$0 2010 2011 2012 2013 2014 2015 2016

Source: GSMA Intelligence. Note: Data are limited to carriers that have both connections and capex data for all quarters of a given year. Data indicate capital expenditures exclusive of spectrum purchases.

50. A second factor affecting underlying costs which is of particular significance in Canada is

population density. As shown in Figure 10 below, Canada has the lowest population density

of any major Western country, with just 17 wireless connections per square km of wireless

network coverage, far below the EU average of 146 and the US average of 48 connections

per square km.55

55 It has been argued incorrectly that Canadian population density does not affect wireless prices because mobile networks do not cover the entire country (see, e.g., Catherine Hart, “Why Your High Cell Phone Bills Have Nothing To Do With the Size of Canada,” Openmedia.ca (April 18, 2013) (available at http://openmedia.ca/blog/why-your-high-cell-phone-bills-have-nothing-do-size-canada). This criticism does not apply to the data in Figure 10, which are adjusted (for Canada and the United States) to reflect only areas with

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Figure 10: Wireless Connections per Square Kilometer of Wireless Network Coverage (2016) 600

500

400

300

200

Connections per Square Kilometer Square per Connections 100

0 US EU UK Italy Spain Latvia France Poland Greece Ireland Cyprus Croatia Austria Estonia Canada Finland Sweden Portugal Bulgaria Belgium Slovakia Hungary Slovenia Romania Germany Denmark Lithuania Netherlands Luxembourg Czech Republic

Source notes: GSMA Intelligence; CIA World Factbook (available athttps://www.cia.gov/library/publications/the-world- factbook/fields/2147.html#LowBand). Note: [1] Wireless connections based on four quarter average of 2016. [2]Figures reflect total wireless connections as reported by GSMA Intelligence divided by geographic land area as reported by the CIA World Factbook, adjusted for network coverage. Canada land area was adjusted based on 20 percent coverage and the United States was adjusted based on 81.4 percent coverage. Coverage in European Countries conservatively assumed to be 100 percent. For Canada land area coverage see Communications Monitoring Report 2016, Canadian Radio- television and Telecommunications Commission (October 2016) at 280 (hereafter “CRTC CMR 2016”) (available at www.crtc.gc.ca/eng/publications/reports/policymonitoring/2016/cmr.htm). (“Wireless networks cover approximately 20% of Canada’s geographic land mass and reach 99% of Canadians”). For United States coverage see In the Matter of Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993: Annual Report and Analysis of Competitive Market Conditions with Respect to Mobile Wireless, Including Commercial Mobile Services, WT Docket No. 16-137, “Nineteenth Report,” Federal Communications Commission (September 23, 2016) at Chart III.A.i (hereafter “FCC Annual Wireless Report”) (available at https://apps.fcc.gov/edocs_public/attachmatch/DA-16-1061A1.pdf).

51. Third, as noted above, economies of scale and scope also play an important role in mobile

wireless markets. Other things being equal, larger operators can exploit scale and scope

economies to reduce costs and ultimately charge lower quality-adjusted prices. Such mobile wireless service. Indeed, these data understate network densities in the other countries shown, which (due to the unavailability of consistent data on network coverage) show connections per km of total land area, including areas without mobile coverage.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

economies can result from lower overhead and operating costs and also from the ability to

negotiate lower prices for key inputs such as network equipment and, especially, handsets,

where the market is dominated by just two suppliers, Apple and Samsung.56

52. Figure 11 presents data on one relevant measure of scale – the number of subscribers served

by each firm in major markets in Europe and North America. As the figure shows, each of

the major US carriers serves far more connections than either their Canadian or EU

counterparts. Indeed, even the smallest national US carrier (Sprint with 47 million

subscribers) is more than four times as large as the largest Canadian carrier (Rogers, with 10

million) and, indeed, larger by itself than the entire Canadian market. Thus, in addition to the

high costs associated with low population density, even the largest Canadian carriers suffer

from significant diseconomies of scale relative to both their EU and US counterparts. (The

largest mobile operator in the world, China Mobile, with over 850 million subscribers, is not

shown in the figure.)57

56 Economies of scale and scope may be present at several levels, including the firm, the geographic market, the infrastructure sector, and the entire mobile wireless ecosystem. Also, the ability to exploit economies of scale and scope depends on a variety of factors, e.g., the extent of network sharing. 57 See “China Mobile 4G Subscriber Base Surges in Jan 2017,” TelecomLead (February 20, 2017) (available at http://www.telecomlead.com/telecom-statistics/china-mobile-4g-subscriber-base-surges-jan-2017- 74510).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Figure 11: Mobile Connections by Carrier, National Markets (Selected Carriers, Q4 2016)

Verizon Wireless, USA 121 AT&T, USA 104 T-Mobile, USA 65 Sprint, USA 47 O2, DEU 44 Telekom, DEU 36 Wind Tre, ITA 31 Vodafone, DEU 31 Orange, FRA 25 EE, GBR 24 Vodafone, ITA 23 O2, GBR 22 TIM, ITA 22 SFR, FRA 18 Vodafone, GBR 18 Orange, ESP 17 Orange, POL 16 Movistar, ESP 15 Vodafone, ESP 15 Play, POL 14 Free Mobile, FRA 13 Plus, POL 12 T-Mobile, POL 11 Bouygues Telecom, FRA 11 Rogers, CAN 10 Orange, ROU 10 3, GBR 9 Vodafone, ROU 9 Telus, CAN 9 Bell, CAN 8 04080120 Connections (MM)

Source: GSMA Intelligence. Note: Data shown for EU, US and Canadian carriers only.

53. As noted above, Canadian regulators, including Innovation, Science and Economic

Development Canada (ISED) and the Competition Bureau, have consistently pursued

policies designed to promote market fragmentation, thereby limiting the ability for all market

participants to achieve economies of scale and scope. In addition to using antitrust

enforcement (e.g., forced divestitures) to achieve this goal, they have also utilized set-asides

and similar mechanisms in spectrum auctions to subsidize less efficient smaller firms at the

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

expense of larger ones.58 The effect of such policies is to artificially raise the price of

spectrum to the carriers which need it most – that is, the competitors that have the largest and

fastest growing subscriber bases and thus the most urgent need to expand capacity to meet

demand.

54. A recent report commissioned by GSMA found that government policies which raise

spectrum costs reduce incentives for investment and lead to higher consumer prices for

mobile broadband data, finding that consumer welfare was reduced by $250 billion in

countries with spectrum prices above the global median. The study analyzed spectrum

auction prices in 60 countries from 2008 through 2016 for both coverage spectrum (spectrum

used to extend coverage to outlying areas) and capacity spectrum (spectrum primarily used to

increase capacity in high-demand areas). The analysis showed that Canadian spectrum prices

are among the highest in the world. Indeed, the study declared Canada to be an “extreme

outlier” in multiple auctions, with prices (as measured by dollars per megahertz/pop) in some

cases more than 10 times the global median.59 One of the most notable examples was the

AWS-1 auction, where the average price of $1.55 per MHZ/pop was three times the average

price for AWS spectrum in the US.60

58 See Bohlin et al 2013 at 34-44. 59 See Richard Marsden, Bruno Soria and Hans-Martin Ihle, Effective Spectrum Pricing: Supporting Better Quality and More Affordable Mobile Services (GSMA and NERA Economic Consulting February 2017) at 3, 23-24. 60 See e.g., Robert Earle and David W. Sosa, Spectrum Auctions Around the World: An Assessment of International Experiences with Auction Restrictions (Analysis Group, July 2013) at 19; see also Christian Dippon, Regulatory Policy Goals and Spectrum Auction Design: Lessons from the Canadian AWS Auction (NERA Economic Consulting, April 2009).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

D. The Role of Competition

55. Question 8 in the Notice seeks input regarding the competitiveness of the Canadian mobile

wireless market.61 This is an issue I have examined previously, including in both my Direct

and Supplemental Reports in CRTC 2014-76, Review of Wholesale Mobile Wireless

Services.62 In those reports, I concluded that both retail and wholesale markets for mobile

wireless services are robustly competitive,63 and specifically rebutted evidence put forward

by the Competition Bureau and other intervenors indicating that Canadian mobile network

operators (MNOs) have significant market power.64 In preparing this report, I have reviewed

and, where possible, updated my analysis, and it continues to be my opinion that the

Canadian mobile wireless market benefits from robust, dynamic competition among multiple

facilities-based carriers, which is reflected in falling prices, increasing output and high levels

of innovation and investment.

56. As I noted in my prior reports, concerns about market power in mobile wireless markets are

often founded in the misconception that the existence of market power can be inferred from

high levels of market concentration, as measured (for example) by the Herfindahl-Hirschman

Index (HHI).65 But such concerns are both misplaced and anachronistic: In dynamic markets

like the market for mobile wireless services, which are characterized by high fixed costs,

61 See CRTC Notice at ¶7. 62 See Eisenach 2014; see also Jeffrey A. Eisenach, “Supplemental Expert Report on Behalf of TELUS Communications Company,” Canadian Radio-television and Telecommunications Commission, Review of Mobile Wireless Services (CRTC 2014-76) (August 20, 2014) (hereafter “Eisenach 2014 Supplemental”). 63 See e.g., Eisenach 2014 at ¶6; 64 See e.g., Eisenach 2014 Supplemental at ¶¶ 42-107. 65 The HHI is calculated as the sum squared market shares. Thus, for example, a two-firm market in which each firm had a 50 percent market share has an HHI of 5,000 = 502 + 502.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

network effects and economies of scale and scope, high levels of concentration are expected,

and do not imply the existence of market power.66

57. In my 2014 Report I analyzed the relationship between market concentration and

performance by using a multivariate regression analysis to compare market concentration (as

measured by the HHI for facilities-based providers) with price and revenue metrics in

Canada, the U.S., and EU member states. My analysis found that there is no statistically

significant relationship between HHI levels and the amounts paid by subscribers for mobile

broadband. As shown in Table 2, I have updated that analysis based on current data, again

using a multivariate regression specification to assess the relationship between market

structure and revenues per user and per connection.67 Unlike some simple-minded bi-variate

approaches, which simply compare levels of concentration to some measure of price,68 my

approach controls for multiple factors likely to affect supply and demand conditions across

countries, including the number of wireless subscribers in each country (economies of scale),

population density (costs), gross national income per capita (demand) and median age

(demand for high usage applications).

58. The “P-value” columns in Table 2 show the result of the two-tail p-value associated with the

t-test that the coefficient is zero, indicating the statistical significance of the coefficient. A P-

value of 0.05 or less indicates the coefficient is different from zero at a 95 percent level of

statistical confidence, which is the usual minimum level required to consider a result

66 See 2014 Report at ¶¶ 15-17. See also Eisenach 2017 at 448. 67 In my 2014 Report, I modeled the effects of concentration, as represented by the HHI, and market size, as measured by the number of subscribers. The regressions reported below include additional explanatory variables, which increase the explanatory power of the model overall. However, I also replicated the results of my 2014 model using current data, which also show that concentration has no statistically significant effect. 68 See e.g., Rewheel, “Tight Oligopoly Mobile Markets in EU 28 in 2015,” January 2016 (available at http://dfmonitor.eu/downloads/Tight_oligopoly_mobile_markets_EU28_04012016_PUBLIC.pdf).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

statistically significant. As indicated by the P-values of 0.59 (for the regression on average

revenues per connection) and 0.76 (for the regression on average revenues per subscriber),

for the coefficients on the HHI variable, the regression analysis confirms the findings of my

2014 analysis that there is no statistically significant relationship between concentration and

either revenues per user or revenues per connection. Simply put, holding other factors

constant, the level of market concentration has no measurable effect on what consumers pay

for mobile wireless service.69

Table 2: Results of Regression Analyses of Impact of Concentration on Revenues Dependent Variables Average Revenue per Connection Average Revenue per Subscriber Variable Coefficient P-value Coefficient P-value HHI -0.0017 0.59 0.0011 0.76 Subscribers 2.58E-08 0.36 3.29E-08 0.30 Population Density 7.22E-04 0.89 1.73E-04 0.98 GNI per Capita 5.11E-04 0.00 6.35E-04 0.00 Median Age -1.15 0.05 -1.84 0.01 Constant 51.78 0.05 76.66 0.01 F-Test 9.52 11.91 Prob > F 0.00 0.00 Observations 30 30 R-Squared 0.66 0.71 Source: GSMA Intelligence; World Bank; CIA World Factbook. Note: Average revenue per connection, average revenue per subscriber, HHI and subscriber data are for Q4 2016. Median age data are for 2016. Population Density and GNI per Capita data are for 2015.

59. While these results clearly show that high levels of market concentration are prima facie not

a basis for inferring market power, it is nevertheless noteworthy that the Canadian market is

among the least concentrated mobile broadband markets in the world. Figure 12 shows the

HHI at the national level for EU countries as well as for Canada and the US. As the figure

69 These results are confirmed by other analyses. For example, one recent study examined mobile markets in 21 developed countries and found that in three markets where consolidation occurred (from four facilities-based carriers to three), prices actually declined by 15-40 percent. See Mike Dano, “Analysts: Sprint/T-Mobile Must Merge or One Will Fail,” Fierce Wireless (April 11, 2014) (available at http://www.fiercewireless.com/story/analysts-sprintt-mobile-must-merge-or-one-will-fail/2014-04-11).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

shows, most EU markets are more concentrated than either the US or Canada. Furthermore,

the level of concentration in the Canadian market is actually declining, having fallen to an

HHI of 2,537 at the end of 2016 from 2,674 at the beginning of 2014.70

Figure 12: Herfindahl-Hirschman Indices by Country (Q4 2016) 4,500

4,000

3,500

3,000 2,537 2,625 2,500

HHI 2,000

1,500

1,000

500

0 US UK Italy Spain Malta Latvia France Poland Ireland Greece Cyprus Croatia Austria Canada Estonia Finland Sweden Portugal Bulgaria Belgium Hungary Slovenia Slovakia Romania Denmark Germany Lithuania Netherlands Luxembourg

Czech Republic Source: GSMA Intelligence.

60. The best evidence of the competitiveness of the Canadian market, however, lies in the market

performance data discussed elsewhere in this report. First, a lack of competition is generally

associated with restrictions on output – yet the amount of mobile wireless data utilized by

Canadians is growing at an explosive rate. Second, a market experiencing inadequate

competition is likely to produce low rates of innovation and inferior quality products and

services, yet Canada has one of the highest quality mobile broadband infrastructures in the

70 See Eisenach 2014 at ¶54.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

world. Third, as noted above, markets lacking in competition typically do not display the

extent of product differentiation and consumer choice evidenced by the literally hundreds of

service plans available in the Canadian market. Last, markets characterized by significant

monopoly power are unlikely to experience protracted, rapid price declines – yet, as

discussed immediately below, the price for a typical mobile wireless service package in

Canada has declined at a compound annual rate of roughly six percent for the past eight years.

In my opinion, these factors indicate that the market is performing well as a result of

competitive incentives that cause suppliers to improve service offerings and lower prices in

order to grow or maintain their market shares. This is the essence of a competitive market.

V. The Nordicity Report, Affordability and Adoption

61. The Order expresses concern that “Canadians continue to pay high rates for mobile wireless

telecommunications services,” that Canada has “among the lowest adoption rates” among

industrialized countries and that Canadians with low household incomes “face challenges

related to the affordability of telecommunications services.” 71 Together, these concerns

appear to be the primary basis for asking the CRTC to consider imposing still more

regulation on the mobile wireless industry. In my opinion, these concerns are neither

supported by nor consistent with the available evidence.

62. The only evidence of which I am aware for the Order’s assertion that “Canadians pay high

rates” for mobile wireless services is the CRTC-commissioned Nordicity Report. In my

opinion, the Nordicity Report does not support the Order’s concerns about mobile wireless

prices, adoption or affordability. In the first section below I explain why the Nordicity

Report methodology for assessing Canadian mobile wireless prices is flawed and its results

71 Order at 2.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

are biased. In the second section I present evidence relating to adoption and affordability,

including showing that the price information for low-end service plans reported in the

Nordicity Report is factually incorrect.

A. The Nordicity Report’s Methodology Is Flawed and its Results Are Biased

63. The Nordicity Report’s methodology is to collect and compare data on prices charged for

specific bundles or baskets of service offered by carriers in different countries. Specifically,

Nordicity collected information on prices charged for six different mobile telephone service

plans (Level 1 through Level 6) by multiple carriers for multiple cities in Canada and the US

and for a single city in each of five other countries surveyed: Australia (Sydney), France

(Paris), Germany (Berlin), Italy (Rome), Japan (Tokyo) and the United Kingdom (London).

Each plan was defined by particular levels of usage for voice calling, text messages, and

mobile data services.72

72 See Nordicity Report at Section 4. The survey also covers bundles that include television and wireline voice and data services as well as bundles for stand-alone mobile wireless internet. My analysis focuses on the comparisons for the six mobile wireless telephone plans, but my overall conclusions apply equally to the stand-alone data plan comparisons.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Table 3: Nordicity Report Mobile Wireless Service Baskets

Source: Nordicity Report at 75.

64. While the approach of comparing service baskets has the apparent advantage of “holding

constant” certain product characteristics (e.g., monthly data usage limits or the number of

text messages), it completely ignores other product characteristics which consumers may find

equally or more salient, such as network speed, the extent of coverage, and reliability. It also

fails to capture differences in consumer buying patterns, meaning that there is no way to be

certain the baskets being compared are actually purchased by a significant number of

consumers. And, of course, no allowance is made for differences in cost factors, such as

those discussed in Section IV(C) above. Comparisons which fail to take account of these

factors provide little if any meaningful insight into comparative market performance or even

relative price levels.

65. To its credit, the Nordicity Report forthrightly and prominently acknowledges many of these

shortcomings. Specifically, in a section titled “Caveats to the Interpretation of the Findings of

this Study,” the Report makes the following disclaimers:

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

The price comparisons are based on price data collected through a survey conducted in January and February of this year. As prices for telecommunications services are constantly evolving, the prices cited in this Study represent a ‘snapshot’ of prices in time.

The Canadian prices are based on a survey of service providers in 6 cities, the American prices on 4 cities and prices in the other 6 foreign jurisdictions are based on service providers found in their principal cities. Thus, the prices cited for Canada, US or the international jurisdictions are not meant to be statistically representative of the individual countries as a whole.

Prices in Canada and international jurisdictions are driven by a complex mix of a number of factors: cost of service, competitive positioning, technological advances, consumer behaviour and regulatory frameworks. As wireless technology is constantly improving and consumers demand ever more bandwidth and data caps, service providers are constantly increasing features. In the Study, these changes are reflected by the need to regularly update the definition of service baskets. Hence, price increases in those baskets may in part, simply reflect better service levels offered to consumers.

This Study did not take into account the network technologies deployed in the networks nor the speed or quality of service of those networks.

Finally, this Study did not account for any cost of service or socio-economic factors that may be relevant for price differences across different domestic and international jurisdictions. Thus, factors such as population density, terrain and climate have significant impacts on the cost of service. Similarly, socio- economic factors such as affordability indicators (i.e. mobile prices in relation to disposable income), number of handsets per subscriber, number of minutes of usage per subscriber and other factors were not within the scope of this Study.73

66. Thus, to summarize, the Report itself acknowledges that: the data reported – now nearly two

years old – represent only a “snapshot” of “constantly evolving” prices; that its results do not

account for differences in costs, levels of actual usage, network technologies, or quality of

service; and, that its results “are not meant to be statistically representative” of prices charged

in each country. In my opinion, these disclaimers by themselves mean that the study cannot

be relied upon to support any meaningful comparison of prices across jurisdictions or as the

basis for making significant regulatory changes.

73 Nordicity Report at 12 (emphasis added).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

67. Further, the Nordicity Report also contains other methodological weaknesses which are not

directly acknowledged. The most important of these, in my view, is its weighting of service

prices by each carrier’s overall market share, irrespective of the prices charged for specific

service baskets.74 That is, as I understand Nordicity’s methodology, if incumbent carriers

with an overall 80 percent market share charge $40 for a low-end “Level 1” basket, and new

entrants and flanker brands with an overall 20 percent market share charge $30 for the same

Level 1 basket, the Nordicity Report calculates the average price for the Level 1 basket to be

to be $38 (= 80% * $40 + 20% * $30).

68. The flaw behind this approach is self-evident: It assumes that 80 percent of consumers are

sufficiently inattentive or insensitive to prices that they choose to buy the more expensive

plan from the incumbent rather than getting the same service from a flanker or a new entrant

for half the price. It is far more likely that most consumers buy the $30 plan from the less

expensive carriers – and that the average price paid in the marketplace for Level 1 baskets is

closer to $30 than to $40.

69. While I have used round numbers for purposes of exposition, this is not a hypothetical issue.

Table 8 of the Nordicity Report shows average prices, by city, for incumbents, flanker brands

and new entrants. For the Level 1 basket, new entrants charge an average price of $30.63

and incumbents charge an average (unweighted) price of $40.92. Yet the Nordicity Report,

after weighting for market shares, reports that the average price in Canada for the Level 1

basket is $41.08.75 In my opinion, this result is simply incorrect and inaccurate.76

74 Nordicity Report at 16, n. 8. 75 See Nordicity Report at 37, Figure 7. The overall average of $41.08 reported for the Level 1 in Figure 7 seems high compared with the data for individual cities and operator types reported in Table 8 (which shows the averages ranging from a maximum of $40.92 for incumbents to a minimum of $30.63 for new entrants. The Nordicity Report does not provide sufficient information to permit replication of its results. When my staff asked

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

70. A second substantial methodological flaw lies in the Report’s reliance on a very small

number of observations for its international comparisons – just seven countries and, for six of

those (the European and Pacific Rim countries), observations for just a few carriers in a

single, non-representative city. While Nordicity does not (as noted above) make available

sufficient information to replicate or conduct sensitivity testing on its results, it does provide

an example of how small sample size can affect its results when it acknowledges that the 45

percent year-over-year decline in Level 1 mobile Internet basket prices it reports for

Australia is an artifact of the fact that the number of carriers offering such a plan in Sydney

dropped from two in 2015 to just one in 2016.77 As noted above, the Report is to be credited

for acknowledging in a general way that its results do not represent a statistically significant

sample. Less creditable is its failure to conduct sensitivity analyses or to make available to

third parties the ability to do so.

71. A third major flaw is the Report’s failure to include pre-paid plans, which are especially

significant with respect to the affordability of mobile services to low-income Canadians.

Nordicity justifies this omission by noting that pre-paid plans represent a relatively small

fraction of total mobile wireless revenues, which it concludes is an indication that post-paid

plans are “the preferred option for Canadian consumers.”78 But this rationalization misses the

point, which is that pre-paid plans are available and are relied upon by many consumers,

especially those seeking a low-cost option.

Nordicity to provide the necessary data, we were told they would not do so unless we would attest that “NERA isn’t working for any Canadian operator.” 76 While new entrants and flanker brands may also charge lower rates for higher level baskets, in my opinion the consumers of these baskets are likely more conscious of service quality differentials and less sensitive to price than consumers of the least expensive plans, and thus more likely to purchase from incumbents. 77 Nordicity Report at 62. 78 Nordicity Report at 41.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

72. The Nordicity Report’s methodological flaws, particularly its focus on price to the exclusion

of quality characteristics like network technology, coverage, speed, and usage result in a

fundamentally misleading picture of the Canadian mobile wireless market. Comparing

Canadian prices for each service basket to those of the other countries surveyed, it typically

finds that Canada’s prices are among the top two or three for each basket, with Japan and the

US also tending to be near the top. The European countries surveyed – France, Germany,

Italy and the UK – tend to be at the bottom.79

73. What the Report ignores is that while service in these countries is often inexpensive, it is also

in many respects inferior. For example:

 Canadian consumers benefit from much higher levels of 4G LTE coverage than those in the “low price” countries surveyed in the report. More than 62 percent of Canadian connections are over 4G connections, compared with just 45 percent for France and 31 percent for Germany.80

 Canadian LTE networks deliver some of the fastest average connection speeds in the world. Canadian LTE connections average 24 Mbps, compared with 20 Mbps in France, 18 Mbps in the UK and 17 Mbps in the US.81

 Canadians average 2.2 GB/month in data usage compared with 1.3 GB/month in the EU.82

74. Similarly, the Nordicity Report fails to take account of cost factors, including the far higher

population densities of the comparison countries. As discussed above, there are just 17

79 See Nordicity Report at 37-38. For example, Level 3 prices are $89.72 for Japan, $74.67 for Canada, $73.00 for the US, $56.20 for Germany, $38.08 for France, $34.79 for Italy, $30.91 for Australia and $30.13 for the UK. 80 GSMA Intelligence. 81 “VNI Mobile Forecast Highlights, 2016-2021,” Cisco (available at http://www.cisco.com/assets/sol/sp/vni/forecast_highlights_mobile/#~Country). 82 “VNI Mobile Forecast Highlights, 2016-2021,” Cisco (available at http://www.cisco.com/assets/sol/sp/vni/forecast_highlights_mobile/#~Country).

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

mobile connections per square kilometer of wireless coverage in Canada compared with 313

in Germany, 303 in the UK and 103 in France.83

75. A more valid approach to comparing network performance is to compare consumer costs

with value received. For example, Figure 13 below compares the proportion of LTE

connections with average revenues per subscriber in the eight countries surveyed by

Nordicity. As the figure shows, Canada’s performance is comparable to that of Japan and the

US, both of which are also high-quality, high-usage markets. Overall, the two variables are

highly correlated, with a correlation coefficient of 0.709, meaning that there is a strong and

unsurprising relationship between higher ARPUs and better, faster networks in these eight

countries.

83 See Figure 10 infra.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Figure 13: Revenues per Subscriber and Percentage of Connections on LTE (Nordicity Countries, Q4 2016)

Source: GSMA Intelligence.

76. Another view of network quality is shown in Figure 14 below, which plots the availability of

LTE connections against LTE network speeds for a large sample of countries surveyed by

Open Signal. The vertical axis indicates the proportion of the population in each country

covered by LTE networks while the horizontal axis indicates LTE network speeds. As

shown in the figure, Canada has both high availability and high speeds. No Nordicity

Country performs better on both measures, and the low-cost/low-performance European

countries perform much worse.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Figure 14: 4G Speed and Availability (Nordicity Countries, Q1 2017)

Source: "The State of LTE," OpenSignal (June 2017) (available at https://opensignal.com/reports/2017/06/state-of- lte?pdf).

77. In summary, by failing to account for differences in service quality and usage, as well as

underlying cost factors, the Nordicity Report ignores the fact that Canadians are getting more

for their mobile broadband dollar than consumers in low-price/low-performance countries in

Europe. To say, based on the Nordicity Report, that Canadians “pay high rates for mobile

wireless” is like saying that someone who pays $400 a month to drive a brand new utility

vehicle to and from work every day is getting a worse deal than someone who pays $300 a

month for a beat-up junker they only drive on weekends. Simply put, the Nordicity Report’s

finding that “Canadian Mobile Wireless Telephony prices are, on average, higher than those

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

in other international jurisdictions” 84 is factually unsupported, statistically invalid and

economically meaningless.

B. Affordability and Adoption

78. The Order also expresses concerns about adoption and affordability, stating that “Canada has

among the lowest adoption rates” for mobile wireless services among industrialized countries

and that “Canadians with low household income in particular face challenges related to the

affordability of telecommunications services.”85 In my opinion, neither of these conclusions

is consistent with the available evidence.

79. First, with respect to adoption, it is factually correct – but economically uninformative – that

some reported data on mobile wireless adoption show Canada with a relatively low adoption

rate. For example, the latest data from analyst firm Telegeography shows Canada with an 84

percent mobile wireless adoption rate, lower than in many European countries. 86 The

problem with this data is that it is based on the number of connections per capita, where a

connection represents an individual SIM card.87 In areas like Europe with substantial cross-

border travel and international roaming fees, it is commonplace for consumers to purchase

multiple SIM cards, meaning that a single subscriber with a single mobile device may be

counted multiple times. Similarly, in low-income countries, many consumers own multiple

SIM cards in order to take advantage of “on-net” calling discounts.88 Thus, when one sees

data indicating (as reported by Telegeography) that Macau has a population penetration rate

84 Nordicity Report at 37. 85 Order at 2. 86 See TeleGeography, GlobalComms Database, Canada (March 2017) at 1. 87 See TeleGeography, GlobalComms Database, Subscriber Definition (August 2017) (available at https://www.telegeography.com/products/globalcomms/help/index.html#k). 88 For a more extensive discussion, see Eisenach 2014 at ¶30.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

of 330 percent, this should not be construed to mean that the typical Macauan has 3.3 cell

phones.89 (Nor, if they did, would this be a desirable outcome.)

80. To assess the affordability of Canadian wireless services, I analyzed current product

offerings for a variety of low-cost plans currently available from Canadian carriers. My

analysis shows that the data reported in the Nordicity Report for low-priced service baskets

significantly overstates prices actually available in the marketplace.90

81. As shown in Table 3 above, the Nordicity Report divides mobile wireless services into six

service baskets, each defined by different levels of usage for voice calling, text messages,

and mobile data services. The Level 1 service basket is defined as plans which provide for

150 incoming and outgoing minutes of voice calling per month, with 10 percent of outgoing

minutes treated as domestic long distance, and no optional features. The Level 2 service

basket is defined as plans which provide 450 minutes of incoming and outgoing minutes per

month, with 10 percent of outgoing minutes treated as domestic long distance, plus two

optional features (such as voice mail and call display), plus 300 text messages.91

82. Figure 15 compares the Nordicity Report’s average price for the Canadian Level 1 service

basket to low-price plans currently available in the marketplace. The plans for which prices

are reported are those which most closely match, but in all cases exceed, the criteria used by

Nordicity to define the Level 1 service basket.92 The average price of these plans is $31.79,

89 See TeleGeography, GlobalComms Database, Macau (March 2017) at 1. 90 Neither the prices reported by Nordicity nor the prices I examined for plans currently available in the marketplace include promotional rates and terms. Because many consumers take advantage of such promotions, the prices reported here overstate the prices actually paid by Canadians for a given level of service. 91 Nordicity Report at 26. 92 Prices for plans that do include nationwide talk (i.e., domestic long-distance) are adjusted upward by the domestic long distance price per minute for those plans times nine minutes. This approach conforms to the method I understand was applied by the Nordicity Report. See Nordicity Report at 75. For purposes of comparability, I also considered emergency service fees, which Nordicity says are included in its averages. See Nordicity Report at 27

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

23 percent below the Nordicity average of $41.08, even though all of these plans offer higher

levels of usage than those defined by the Level 1 service basket. The lowest priced plans, at

$25.21, are 39 percent below the Nordicity average.

Figure 15: Canadian Low-Price Plans vs. Nordicity Level 1 Average Price

Source: TELUS Competitive Intelligence; TELUS Internal Pricing Documents; "TELUS Plans & Services - Long Distance," Smart Cell Communications (available at http://www.smartcell.ca/en/telus-plans-and-services/long- distance.asp); "Mobile Plans," Videotron (available at http://www.videotron.com/residential/mobile/mobile- plans#tab/cat2380084); Nordicity Report at Figure 7; "Population by Year, by Province and Territory," Statistics Canada (available at http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/demo02a-eng.htm); "Plans - Terms and Conditions," TELUS (available at http://www.telus.com/en/ab/mobility/plans/).

83. Figure 16 compares the Nordicity Report’s average price for the Canadian Level 2 service

basket to low-price plans currently available in the marketplace. Again, the plans for which

prices are reported are those which most closely match, but in all cases exceed, the criteria

used by Nordicity to define the Level 2 service basket.93 The average price of these plans is

$42.95, 12 percent below the Nordicity average of $48.77. The lowest priced plans, at and 37. I calculated an average provincial 9-1-1 fee of $0.21 (weighted based on province population), which does not materially affect the results. See “Plans - Terms and Conditions," TELUS (available at http://www.telus.com/en/ab/mobility/plans/); "Population by Year, by Province and Territory," Statistics Canada (available at http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/demo02a-eng.htm). 93 Prices for plans without nationwide talk are adjusted upward to reflect charges for 27 long distance minutes. The $0.21 emergency charge is applied here as well.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

$40.21, are 18 percent below the Nordicity average. As before, all of these plans offer higher

levels of usage than those defined by the Nordicity Level 2 parameters.

Figure 16: Canadian Low-Price Plans vs. Nordicity Level 2 Average Price

Source: TELUS Competitive Intelligence; TELUS Internal Pricing Documents; "Rogers Long Distance Rates & Information - Ontario," Compare Cellular (available at http://www.comparecellular.com/rogers-plans-and- essentials/ontario/long-distance.asp); "Basic Phone Plans," Bell (available at http://www.bell.ca/Mobility/Cell_phone_plans/Talk-and-Text-plans); "Phone Plans," Virgin (available at http://www.virginmobile.ca/en/plans/postpaid.html#!/TIER4); "Monthly Plans," PC Mobile (available at http://www.pcmobile.ca/monthly_plans_features.jsp); Nordicity Report at Figure 7; "Population by Year, by Province and Territory," Statistics Canada (available at http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/demo02a- eng.htm); "Plans - Terms and Conditions," TELUS (available at http://www.telus.com/en/ab/mobility/plans/).

84. The average prices reported by Nordicity primarily represent post-paid plans, and all of the

comparable offerings shown in Figures 15 and 16 are also post-paid. 94 Because many

Canadian consumers rely on pre-paid plans, especially for lower-cost services, I also

examined pre-paid offerings currently in the marketplace which meet the criteria for the

Level 1 and Level 2 service baskets, shown in Table 4 below. As the table shows, there are

94 The Nordicity Report includes pre-paid plans only if no post-paid plans are available from a particular service provider for a particular service basket. Where pre-paid prices are included, Nordicity includes an imputed monthly device cost to reflect the implicit device cost present in post-paid plans. (Nordicity Report at 41.) This cost is “comparable to the particular service provider’s least expensive lite device amortized over a twenty-four month period.” (Nordicity Report at 27.) However, the Nordicity Report does not indicate which of its observations represent pre-paid plans, nor does it separately report prices for any pre-paid plans.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

multiple pre-paid plans currently available to Canadian consumers at prices well below the

average prices reported by Nordicity for the Level 1 and Level 2 service baskets.95

95 These amounts do not include imputed costs for devices which are incorporated in the prices of the post- paid plans. Nordicity does not provide sufficient information to calculate imputed values for these amounts.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Table 4: Selected Canadian Pre-Paid Plans

Sources: TELUS Competitive Intelligence; TELUS Internal Pricing Documents; "Long Distance," Chatr Mobile (available at https://www.chatrwireless.com/web/content/long_distance); "Prepaid Plans," PC Mobile (available at http://www.pcmobile.ca/prepaid_plans_features.jsp); "Plans," Public Mobile (available at https://www.publicmobile.ca/en/qc/plans); "Population by Year, by Province and Territory," Statistics Canada (available at http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/demo02a-eng.htm); "Plans - Terms and Conditions," TELUS (available at http://www.telus.com/en/ab/mobility/plans/).

85. One possible explanation for the inaccuracy of the Nordicity Report’s Level 1 and Level 2

price estimates is that they are more than 18 months old. As shown in Figure 17, for example,

the inflation-adjusted price for the Level 3 service basket declined at a cumulative average

rate of six percent annually between 2008 and 2016. 96 I note, however, that Nordicity

reported that Level 1 and Level 2 prices were essentially stable in recent years. Thus, it is

96 Nordicity reports data for the Level 4 and Level 5 service baskets only for 2014-16 (for Level 4) and for 2015-2016 (for Level 5). Level 4 prices declined by an average annual rate of 5.28 percent between 2014 and 2016, and Level 5 prices dropped 5.90 percent from 2015 to 2016.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

also possible that its failure to accurately report current prices for these baskets stems at least

in part from methodological flaws in addition to simply being out of date.

Figure 17 Nordicity Report Canadian Mobile Wireless Prices, 2008-2016 (2016 $CAN) 120

100

60 Avg Annual Price Change Level 1 1.37% 40 Level 2 -4.15% Level 3 -6.37% 20 Indexed Wireless Prices (2016 $CAN) (2016 Indexed Wireless Prices

0 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: Nordicity Report at Tables D 2.1 - D 2.6 (available at http://www.crtc.gc.ca/eng/publications/reports/compar/compar2016.htm); “Consumer Price Index, Historical Summary,” Statistics Canada (Last Modified January 20, 2017) (available at http://www.statcan.gc.ca/tables- tableaux/sum-som/l01/cst01/econ46a-eng.htm).

86. While low income citizens everywhere face affordability challenges for many products and

services, there is no credible evidence that low-income Canadians are less able to afford

mobile wireless services than in other countries. To the contrary, as shown in Figure 18

below, data from the Pew Global Research Project shows that the gap between the proportion

of high income citizens and low income consumers using smartphones (the “smartphone

gap”) is lower in Canada than in any of the Nordicity countries surveyed with the exception

of Germany, where it is the same. These data suggest that, when it comes to the affordability

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

of high quality mobile broadband connections for low income citizens, Canada is a leader,

not a laggard.

Figure 18: “The Smartphone Gap” in the Eight Nordicity Countries 35 33

30 28 26 25 25 22 20 20 19 19

10 Smartphone Adoption (%) Adoption Smartphone

5 Difference betweenDifference High and Low Income 0 Canada Germany US France UK Australia Italy Japan

Source: Jacob Poushter, “Smartphone Ownership and Internet Usage Continues to Climb in Emerging Economies,” Pew Research Center (February 22, 2016) (available at http://www.pewglobal.org/2016/02/22/smartphone- ownership-and-internet-usage-continues-to-climb-in-emerging-economies/).

87. To summarize, neither the Nordicity Report nor any other evidence of which I am aware

suggests that the Canadian market is underperforming with respect to either affordability or

adoption.

VI. Conclusions

88. Canadian citizens traditionally have benefited from widely available, high quality

communications services at reasonable, declining prices. Those results have been achieved

through policies which, to a greater extent than in most other areas of the world, have relied

upon market forces supplemented by light-touch regulations. In recent years, policy has

moved in the direction of more intrusive regulation, and there are troubling signs that market

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

performance – including specifically investment in mobile wireless infrastructure – may be

adversely affected as a result. Nevertheless, the Canadian market continues to perform well.

In particular, concerns about high prices, low adoption rates and the affordability of mobile

wireless services for low-income households are not supported by the evidence. Going

forward, improvements in market performance depend on returning to a light-touch approach

while instituting reforms, especially with respect to spectrum policy, that would lower the

costs of network deployment and allow market participants to achieve economies of scale

and scope.

Before the Canadian Radio-television and Telecommunications Commission Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service

Annex A

September 2017

JEFFREY A. EISENACH, PH.D. Managing Director Co-Chair Communications, Media and Internet Practice

Dr. Eisenach is a Managing Director and Co-Chair of NERA's Communications, Media, and Internet Practice. He is also an Adjunct Professor at George Mason University Law School, where he teaches Regulated Industries, and a Visiting Scholar at the American Enterprise Institute. Previously, Dr. Eisenach has served in senior policy positions at the US Federal Trade Commission and the White House Office of Management and Budget, and on the faculties of Harvard University's Kennedy School of Government and Virginia Polytechnic Institute and State University. Dr. Eisenach's consulting practice focuses on economic analysis of competition, regulatory, intellectual property and consumer protection issues. He has submitted expert reports and testified in US federal court as well before the Antitrust Division of the U.S. Department of Justice, the Federal Trade Commission, the Copyright Royalty Board, the Federal Communications Commission, US Tax Court, several state public utility commissions, and courts and regulatory bodies in Australia, Canada, the United Kingdom, the Caribbean, and South America. He has also advised clients in some of the world’s largest information technology sector mergers. He has written or edited 19 books and monographs, including Broadband Competition in the Internet Ecosystem and Competition, Innovation and the Microsoft Monopoly: Antitrust in the Digital Marketplace. His writings have also appeared in scholarly journals such as The Review of Network Economics, as well as in popular outlets like Forbes, The New York Times, and The Wall Street Journal. Prior to joining NERA, Dr. Eisenach was a managing director and principal at Navigant Economics, and before that he served as Chairman of Empiris LLC, Criterion Economics, and CapAnalysis, LLC. Among his other previous affiliations, Dr. Eisenach has served as President and Senior Fellow at The Progress & Freedom Foundation; as a scholar the Heritage Foundation, and the Hudson Institute; as a member of the 1980-81 Reagan-Bush Transition Team on the Federal Trade Commission, the 2000-2001 Bush-Cheney Transition Team on the Federal Communications Commission, the Virginia Governor's Commission on E-Communities, and the Virginia Attorney General's Task Force on Identity Theft. In 2016-2017 he led the Trump-Pence Transition Team for the Federal Communications Commission. Dr. Eisenach received his PhD in economics from the University of Virginia and his BA in economics from Claremont McKenna College. Jeffrey A. Eisenach, Ph.D.

Education 1985 Ph.D. in Economics, University of Virginia 1979 B.A. in Economics, Claremont McKenna College

Professional Experience Jan 2014-present Managing Director/Senior Vice President NERA Economic Consulting Jan 2010-Jan 2014 Managing Director and Principal, Navigant Economics Sept 2008-Jan 2010 Chairman and Managing Partner, Empiris LLC June 2006-Sept 2008 Chairman, Criterion Economics, LLC July 2005-May 2006 Chairman, The CapAnalysis Group, LLC Feb 2003-July 2005 Executive Vice Chairman, The CapAnalysis Group, LLC June 1993-Jan 2003 President, The Progress & Freedom Foundation July 1991-May 1993 Executive Director, GOPAC Mar 1988-June 1991 President, Washington Policy Group, Inc. Sept 1986-Feb 1988 Director of Research, Pete du Pont for President, Inc. 1985-1986 Executive Assistant to the Director, Office of Management and Budget 1984-1985 Special Advisor for Economic Policy and Operations, Office of the Chairman, Federal Trade Commission 1983-1984 Economist, Bureau of Economics, Federal Trade Commission 1981 Special Assistant to James C. Miller III, Office of Management and Budget/Presidential Task Force on Regulatory Relief 1979-1981 Research Associate, American Enterprise Institute 1980 Consultant, Economic Impact Analysts, Inc. 1978 Research Assistant, Potomac International Corporation

Teaching Experience 2000-present Adjunct Professor, George Mason University School of Law, (Courses Taught: Regulated Industries; Perspectives on Government Regulation; The Law and Economics of the Digital Revolution) 1995-1999 Adjunct Lecturer, Harvard University, John F. Kennedy School of Government, (Course Taught: The Role of Government in the 21st Century) 1989 Adjunct Professor, George Mason University, (Course Taught: Principles of Economics)

NERA Economic Consulting 2

Jeffrey A. Eisenach, Ph.D.

1985, 1988 Adjunct Professor, Virginia Polytechnic Institute and State University, (Courses Taught: Graduate Industrial Organization, Principles of Economics) 1983-1984 Instructor, University of Virginia, (Courses Taught: Value Theory, Antitrust Policy) 1982-1983 Teaching Assistant, University of Virginia, (Courses Taught: Graduate Microeconomics, Undergraduate Macroeconomics)

Honors & Professional Activities 2016-2017 Leader, Trump-Pence Presidential Transition Team on the Federal Communications Commission 2012-present Visiting Scholar, American Enterprise Institute 2011-present Member, Board of Directors, Information Technology & Innovation Foundation 2011-present Member of the Board, Economic Club of Washington (Vice President for Education, 2012-2017) 2010-2011 Member, World Bank ICT Broadband Strategies Toolkit Advisory Group 2009-present Member, Economic Club of Washington 2008-2009 Member, Board of Directors, PowerGrid Communications 2008-2012 Member, Board of Advisors, Washington Mutual Investors Fund 2002-2014 Member, Board of Advisors, Pew Project on the Internet and American Life 1993-2009 Member, Board of Directors, The Progress & Freedom Foundation 2002 Member, Attorney General’s Identity Theft Task Force, Virginia 2002-2003 Member of the Board of Directors, Privacilla.com 2001-2004 Member, Executive Board of Advisors, George Mason University Tech Center 2001-2002 Contributing Editor, American Spectator 2001 Member, Transition Advisory Committee on the FCC 2000-2001 Member, Governor's Task Force on E-Communities, State of Virginia 1999-2001 Member, 2000-2001 Networked Economy Summit Advisory Committee 1998-2003 Member, Board of Directors, Internet Education Foundation 1998-2003 Member, Internet Caucus Advisory Committee 1996-2002 Member, American Assembly Leadership Advisory Committee 1995-2000 Member, Commission on America's National Interests 1988-1991 Adjunct Scholar, Hudson Institute

NERA Economic Consulting 3

Jeffrey A. Eisenach, Ph.D.

1988-1991 Visiting Fellow, Heritage Foundation 1981-1984 President's Fellowship, University of Virginia 1981-1983 Earhart Foundation Fellowship, University of Virginia 1981 Member, Presidential Transition Team on the Federal Trade Commission 1979 Henry Salvatori Award, Claremont Men's College 1978 Frank W. Taussig Award, Omicron Delta Epsilon

Testimony, Declarations and Expert Reports Testimony on Addressing the Risk of Waste, Fraud, and Abuse in the Federal Communications Commission’s Lifeline Program, Before the Committee on Commerce, Science and Transportation, United States Senate (September 6, 2017)

Effects of the AT&T-Time Warner Transaction on Competition in the Premium Channels Industry, Expert Report (with T. Watts) on behalf of Starz, Inc. (July 2017)

In Re: Determination of Royalty Rates and Terms of Making and Distributing Phonorecords (Phonorecords III), United States Copyright Royalty Judges, Written Supplemental Report of Jeffrey A. Eisenach on behalf of National Music Publishers Association and National Songwriters Association International (March 1, 2017)

In Re: Determination of Royalty Rates and Terms of Making and Distributing Phonorecords (Phonorecords III), United States Copyright Royalty Judges, Written Rebuttal Report of Jeffrey A. Eisenach on behalf of National Music Publishers Association and National Songwriters Association International (February 13, 2017)

SESAC Inc., SESAC LLC, and SESAC Holdings, Inc. Claimants vs. Radio Music Licensing Committee, Arbitration Before the Hon. Vaughn R. Walker, Kenneth R. Feinberg, Esq. and Lee A. Freeman, Esq., Expert Rebuttal Report of Jeffrey A. Eisenach on Behalf of SESAC (January 23, 2017)

SESAC Inc., SESAC LLC, and SESAC Holdings, Inc. Claimants vs. Radio Music Licensing Committee, Arbitration Before the Hon. Vaughn R. Walker, Kenneth R. Feinberg, Esq. and Lee A. Freeman, Esq., Expert Report of Jeffrey A. Eisenach on Behalf of SESAC (December 23, 2016)

In Re: Determination of Royalty Rates and Terms of Making and Distributing Phonorecords (Phonorecords III), United States Copyright Royalty Judges, Written Direct Report of Jeffrey A. Eisenach on behalf of National Music Publishers Association and National Songwriters Association International (October 31, 2016)

Examination of Differential Pricing Practices Related to Internet Data Plans, Canadian Radio- Television and Telecommunications Commission CRTC 2016-192, Supplemental Expert Report on Behalf of TELUS Communications Company (September 21, 2016)

NERA Economic Consulting 4

Jeffrey A. Eisenach, Ph.D.

Balancing Efficient Pricing and Investment Incentives in the Migration from Copper to Fibre Networks: Assessing the Feasibility of a Temporary Copper Wedge, Expert Report on Behalf of Vodaphone (July 13, 2016)

Examination of Differential Pricing Practices Related to Internet Data Plans, Canadian Radio- Television and Telecommunications Commission, CRTC 2016-192, Expert Report on Behalf of TELUS Communications Company (June 28, 2016)

The Canadian Market for Wireless: Understanding the Bell-MTS Transaction, Expert Report on Behalf of Bell Canada (June 2, 2016)

Analysis of Online Music Copyright Issues; Copyright Tribunal of Australia CT 3 of 2013 – Reference by Phonographic Performance Company of Australia Limited (ACN 000 680 704) Under section 154 (1) of the Copyright Act of 1968, Fifth Expert Report on Behalf of Phonographic Performance Company of Australia Ltd. (March 9, 2016)

Analysis of Online Music Copyright Issues; Copyright Tribunal of Australia CT 3 of 2013 – Reference by Phonographic Performance Company of Australia Limited (ACN 000 680 704) Under section 154 (1) of the Copyright Act of 1968, Fourth Expert Report on Behalf of Phonographic Performance Company of Australia Ltd. (February 8, 2016)

Review of the Consultation Paper on Differential Pricing for Data Services (Consultation Paper No. 8/2015), Telecom Regulatory Authority of India, Expert Declaration on Behalf of Facebook, Inc. (December 30, 2015)

In the Matter of the Joint Application of Frontier Communications Corporation, Verizon California Inc. (U 1002 C), Verizon Long Distance, LLC (U 5732 C), and Newco West Holdings LLC for Approval of Transfer of Control Over Verizon California Inc. and Related Approval of Transfer of Assets and Certifications, California Public Service Commission, Expert Declaration on Behalf of Verizon Communications (August 24, 2015)

Broadband Market Performance in Canada: Implications for Policy, Canadian Radio- Television and Telecommunications Commission Notice of Consultation 15-134, Expert Report on Behalf of Bell Canada (July 2015)

Analysis of Online Music Copyright Issues; Copyright Tribunal Proceeding CT 3 of 2013 – Reference by Phonographic Performance Company of Australia Ltd. Under s 154 of the Copyright Act of 1968, Third Expert Report on Behalf of Phonographic Performance Company of Australia Ltd. (February 26, 2015)

Analysis of Online Music Copyright Issues; Copyright Tribunal Proceeding CT 3 of 2013 – Reference by Phonographic Performance Company of Australia Ltd. Under s 154 of the Copyright Act of 1968, Second Expert Report on Behalf of Phonographic Performance Company of Australia Ltd. (December 9, 2014)

Testimony on Open Internet Rules, Before the Committee on the Judiciary, United States Senate (September 17, 2014)

NERA Economic Consulting 5

Jeffrey A. Eisenach, Ph.D.

Review of Wholesale Mobile Wireless Services, Canadian Radio-Television and Telecommunications Commission Notice of Consultation CRTC 2014-76, Supplemental Expert Report on Behalf of TELUS Communications Company (August 20, 2014)

Analysis of Online Music Copyright Issues; Copyright Tribunal Proceeding CT 3 of 2013 – Reference by Phonographic Performance Company of Australia Ltd. Under s 154 of the Copyright Act of 1968, Expert Report on Behalf of Phonographic Performance Company of Australia Ltd. (August 5, 2014)

The Economics of Pick-and-Pay, Canadian Radio-Television and Telecommunications Commission Broadcasting Notice of Consultation CRTC 2014-190, Expert Report on Behalf of Bell Canada (June 27, 2014)

Review of Wholesale Mobile Wireless Services, Canadian Radio-Television and Telecommunications Commission Notice of Consultation CRTC 2014-76, Expert Report of Jeffrey A. Eisenach on Behalf of TELUS Communications Company (May 15, 2014)

In the Matter of Special Access for Price Cap Local Exchange Carriers, AT&T Corporation Petition for Rulemaking to Reform Regulation of Incumbent Local Exchange Carrier Rates for Interstate Special Access Services, Federal Communications Commission, WC Docket No. 05- 25, RM-10593 Expert Declaration (with Kevin W. Caves) on Behalf of Verizon Communications and Verizon Wireless (March 12, 2013)

In the Matter of Expanding the Economic and Innovation Opportunities of Spectrum Through Incentive Auctions, Federal Communications Commission, Docket No. 12-268, Expert Reply Declaration on Behalf of the Expanding Opportunities for Broadcasters Coalition (March 10, 2013)

In the Matter of Expanding the Economic and Innovation Opportunities of Spectrum Through Incentive Auctions, Federal Communications Commission, Docket No. 12-268, Expert Declaration on Behalf of the Expanding Opportunities for Broadcasters Coalition (January 24, 2013)

Testimony on the Digital Sound Performance Right, Before the Subcommittee on Intellectual Property, Competition and the Internet, Committee on the Judiciary, United States House of Representatives (November 28, 2012)

Response to Pre-Consultation Document PC12/03: Comments on Market Review Process (Part B), Before the Bermuda Telecommunications Regulatory Authority, Expert Report of Jeffrey A. Eisenach on Behalf of Bermuda Digital Communications Ltd. (November 21, 2012)

Order Instituting Rulemaking to Evaluate Telecommunications Corporations Service Quality Performance and Consider Modification to Service Quality Rules, Before the California Public Service Commission, Rulemaking 11-12-001, Reply Declaration of Jeffrey A. Eisenach on Behalf of Verizon Communications (March 1, 2012)

NERA Economic Consulting 6

Jeffrey A. Eisenach, Ph.D.

Order Instituting Rulemaking to Evaluate Telecommunications Corporations Service Quality Performance and Consider Modification to Service Quality Rules, Before the California Public Service Commission, Rulemaking 11-12-001, Expert Declaration of Jeffrey A. Eisenach on Behalf of Verizon Communications (January 31, 2012)

In the Matter of Howard Ferrer et al vs. Puerto Rico Telephone Company, Before the Telecommunications Regulatory Board of Puerto Rico, Case No. JRT: 2009-Q-0014, Expert Declaration of Jeffrey A. Eisenach on Behalf of the Puerto Rico Telephone Company (December 1, 2011)

Joint Declaration of Jeffrey A. Eisenach and Wayne A. Leighton before the Tribunal de Defensa de la Libre Competencia, Santiago, Chile, on behalf of Telefónica Chile S.A. (July 22, 2011)

In the Matter of Amendment of the Commission’s Rules Related to Retransmission Consent, Federal Communications Commission, MB Docket No. 10-71, Expert Reply Declaration (with Kevin W. Caves) on Behalf of the National Association of Broadcasters (June 27, 2011)

In the Matter of an Application by Way of a Reference to the Federal Court of Appeal Pursuant to Sections 18.3(1) and 28(2) of the Federal Courts Act, R.S.C. 1985, C.F-7, Between: Cogeco Cable Inc. et al Applicants and Bell Canada et al Respondents, In the Supreme Court of Canada (on appeal from the Federal Court of Appeal), Affidavit and Expert Report on Behalf of Bell Media Inc. and V Interactions Inc. (May 27, 2011)

In the Matter of Amendment of the Commission’s Rules Related to Retransmission Consent, Federal Communications Commission, MB Docket No. 10-71, Expert Declaration (with Kevin W. Caves) on Behalf of the National Association of Broadcasters (May 27, 2011)

In the Matter of Section 36 of the Public Utilities Commission Act, Proposal to Establish a New Interconnection Agreement Between Digicel and GT&T, Expert Oral Testimony on Behalf of Guyana Telephone and Telegraph Company, Guyana Public Utilities Commission (July 13, 2010)

In the Matter of International Comparison and Consumer Survey Requirements in the Broadband Data Improvement Act, Federal Communications Commission GN Docket No. 09-47, Supplemental Declaration Regarding the Berkman Center Study (NBP Public Notice 13) (with R. Crandall, E. Ehrlich and A. Ingraham), on Behalf of Verizon Communications (May 10, 2010)

Testimony on Deployment of Broadband Communications Networks, Before the Subcommittee on Communications, Technology and the Internet, Committee on Energy and Commerce, United States House of Representatives (April 21, 2010)

Net Neutrality: The Economic Evidence, Expert Declaration in the Matters of Preserving the Open Internet and Broadband Industry Practices, GN Docket No. 09-191 and WC Docket No. 07-52 (with Brito et al) (April 12, 2010)

NERA Economic Consulting 7

Jeffrey A. Eisenach, Ph.D.

In the Matter of the Constitution of the Co-Operative Republic of Guyana and In the Matter of the Application for Redress Under Article 153 for the Contravention of the Applicant’s Fundamental Rights Guaranteed by Articles 20, 146, and 149D of the Constitution of the Republic of Guyana and In the Matter of the Telecommunications Act No. 27 of 1990, U-Mobile (Cellular) Inc., v. The Attorney General of Guyana, “International Exclusivity and the Guyanese Telecommunications Market: A Further Response to DotEcon,” Expert Report on Behalf of Guyana Telephone and Telegraph Company (March 9, 2010)

Universal Service Subsidies to Areas Served by Cable Telephony: Supplemental Report, Expert Report Submitted to the Federal Communications Commission, on Behalf of the National Cable and Telecommunications Association (January 2010)

Policy Proceeding on a Group-Based Approach to the Licensing of Television Services and on Certain Issues Relating to Conventional Television, Canadian Radio-Television and Telecommunications Commission, Broadcasting Notice of Consultation CRTC 2009-411, Oral Testimony on Behalf of CTVgm (November 16, 2009)

In the Matter of International Comparison and Consumer Survey Requirements in the Broadband Data Improvement Act, Federal Communications Commission GN Docket No. 09-47, Declaration Regarding the Berkman Center Study (NBP Public Notice 13) (with R. Crandall and E. Ehrlich) on behalf of the National Cable and Telecommunications Association and the United States Telecom Association (November 16, 2009)

Universal Service Subsidies to Areas Served by Cable Telephony, Expert Report Submitted to the Federal Communications Commission, on behalf of the National Cable and Telecommunications Association (November 2009)

Policy Proceeding on a Group-based Approach to the Licensing of Television Services and on Certain Issues relating to Conventional Television, Canadian Radio-Television and Telecommunications Commission Broadcasting Notice of Consultation CRTC 2009-411, Expert Report on the Economics of Retransmission Consent Negotiations in the U.S. and Canada, (with S. Armstrong) on Behalf of CTVgm (September 19, 2009)

Virginia State Corporation Commission, Second Order for Notice and Hearing In Re: Revisions of Rules for Local Exchange Telecommunications Company Service Quality Standards, Comments on Behalf of Verizon Virginia (March 13, 2009)

In the Matter of Review of the Commission’s Program Access Rules and Examination of Programming Tying Arrangements, Federal Communications Commission Docket MB 07-198, Supplemental Report on Behalf of the Walt Disney Company (December 11, 2008)

In re: Investigation of Rates of Virgin Islands Telephone Corporation d/b/a Innovative Communications, PSC Docket 578, Rebuttal Testimony on Behalf of Virgin Islands Telephone Corporation (October 31, 2008)

Evidence Relating to the ACCC’s Draft Decision Denying Telstra’s Exemption Application for the Optus HFC Footprint, Australian Consumer and Competition Commission, Expert Report on Behalf of Telstra Corporation Ltd. (October 13, 2008)

NERA Economic Consulting 8

Jeffrey A. Eisenach, Ph.D.

In re: Investigation of Rates of Virgin Islands Telephone Corporation d/b/a Innovative Communications, PSC Docket 578, Direct Testimony on Behalf of Virgin Islands Telephone Corporation (September 26, 2008)

In the Matter of the Appropriate Forms of Regulating Telephone Companies, Maryland Public Service Commission, Case No. 9133, Rebuttal Testimony on Behalf of Verizon Maryland (September 24, 2008)

Virginia State Corporation Commission, Proposed Service Quality Rules for Traditional Landline Telecommunications, Comments on Behalf of Verizon Virginia (August 21, 2008)

In re: Complaint and Request for Emergency Relief against Verizon Florida, LLC for Anticompetitive Behavior in Violation of Sections 364.01(4), 364.3381, and 364.10, F.S., and for Failure to Facilitate Transfer of Customers' Numbers to Bright House Networks Information Services (Florida), LLC, and its Affiliate, Bright House Networks, LLC, Florida Public Service Commission, Docket No. 070691-TP, Rebuttal Testimony on Behalf of Verizon Florida LLC (July 25, 2008)

In the Matter of the Appropriate Forms of Regulating Telephone Companies, Maryland Public Service Commission, Case No. 9133, Direct Testimony on Behalf of Verizon Maryland (July 8, 2008)

Comparative Analysis of Communications Markets as it Relates to the Economic Viability of Optus’ HFC Network and Telstra’s Proposed HFC Exemption, Australian Consumer and Competition Commission, Expert Report on Behalf of Telstra Corporation Ltd. (June 23, 2008)

In the Matter of the Constitution of the Co-Operative Republic of Guyana and In the Matter of the application for redress under Article 153 for the contravention of the Applicant’s fundamental rights guaranteed by Articles 20, 146, and 149D of the Constitution of the Republic of Guyana and In the Matter of the Telecommunications Act No. 27 of 1990, U-Mobile (Cellular) Inc., v. The Attorney General of Guyana, Expert Report on Behalf of Guyana Telephone and Telegraph Company (June 19, 2008)

In the Matter of Bright House Networks LLC et al v. Verizon California et al, Federal Communications Commission File No. EB-08-MD-002, Expert Declaration on Behalf of Verizon Communications (February 29, 2008)

In the Matter of Review of the Commission’s Program Access Rules and Examination of Programming Tying Arrangements, Federal Communications Commission Docket MB 07-198, Reply Report on Behalf of the Walt Disney Company (February 12, 2008)

In the Matter of Verizon’s 2007 Price Cap Plan for the Provision of Local Telecommunications Services in the District Of Columbia, District of Columbia Public Service Commission, Formal Case No. 1057, Rebuttal Testimony on Behalf of Verizon (January 31, 2008)

In the Matter of Review of the Commission’s Program Access Rules and Examination of Programming Tying Arrangements, Federal Communications Commission Docket MB 07-198, Expert Report on Behalf of the Walt Disney Company (January 4, 2008)

NERA Economic Consulting 9

Jeffrey A. Eisenach, Ph.D.

In the Matter of Verizon’s 2007 Price Cap Plan for the Provision of Local Telecommunications Services in the District Of Columbia, District of Columbia Public Service Commission, Formal Case No. 1057, Direct Testimony on Behalf of Verizon (December 7, 2007)

In the Matter of the Commission’s Investigation Into Verizon Maryland, Inc.’s Affiliate Relationships, Maryland Public Service Commission, Case No. 9120, Rebuttal Testimony on Behalf of Verizon (November 19, 2007)

On Petition for a Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit, Pacific Bell Telephone Company d/b/a AT&T California, et al., Petitioners, v. Linkline Communications, Inc., et al., Respondents, Brief of Amici Curiae Professors and Scholars in Law and Economics in Support of the Petitioners (with R. Bork, G. Sidak, et al) (November 16, 2007)

In the Matter of the Commission’s Investigation Into Verizon Maryland, Inc.’s Affiliate Relationships, Maryland Public Service Commission, Case No. 9120, Direct Testimony on Behalf of Verizon (October 29, 2007)

Application of Verizon Virginia, Inc. and Verizon South for a Determination that Retail Services Are Competitive and Deregulating and Detariffing of the Same, State Corporation Commission of Virginia, Case No. PUC-2007-00008, Rebuttal Report on Behalf of Verizon (July 16, 2007)

Testimony on Single Firm Conduct, “Understanding Single-Firm Behavior: Conduct as Related to Competition,” United States Department of Justice and United States Federal Trade Commission, Sherman Act Section 2 Joint Hearing (May 8, 2007)

Testimony on Communications, Broadband and U.S. Competitiveness, Before the Committee on Commerce, Science and Transportation, United State Senate (April 24, 2007)

Application of Verizon Virginia, Inc. and Verizon South for a Determination that Retail Services Are Competitive and Deregulating and Detariffing of the Same, State Corporation Commission of Virginia, Case No. PUC-2007-00008, Expert Testimony and Report on Behalf of Verizon (January 17, 2007)

In re: ACLU v. Gonzales, Civil Action No. 98-CV-5591, E.D. Pa., Rebuttal Report on Behalf of the U.S. Department of Justice (July 6, 2006)

In re: ACLU v. Gonzales, Civil Action No. 98-CV-5591, E.D. Pa., Expert Report on Behalf of the U.S. Department of Justice (May 8, 2006)

In re: Emerging Communications Shareholder Litigation, “The Valuation of Emerging Communications: An Independent Assessment” (with J. Mrozek and L. Robinson), Court of Chancery for the State of Delaware (August 2, 2004)

In the Matter of Review of the Commission’s Rules Regarding the Pricing of Unbundled Network Elements and the Resale of Service by Incumbent Local Exchange Carriers, WC Docket No. 03- 173, Declaration of Jeffrey A. Eisenach and Janusz R. Mrozek, Federal Communications Commission (December 2003)

NERA Economic Consulting 10

Jeffrey A. Eisenach, Ph.D.

In the Matter of Disposition of Down Payments and Pending Applications Won During Auction No. 35 for Spectrum Formerly Licensed to NextWave Personal Communications, Inc., NextWave Power Partners, Inc. and Urban Comm – North Carolina, Inc., Federal Communications Commission, (October 11, 2002)

In the Matter of Echostar Communications Corporation, General Motors Corporation, and Hughes Electronics Corporation, Federal Communications Commission (February 4, 2002)

In the Matter of United States v. Microsoft Corp. and New York State v. Microsoft Corp., Proposed Final Judgment and Competitive Impact Statement (with T. Lenard), U.S. Department of Justice, Civil Action No. 98-1232 and 98-1233 (January 28, 2002)

In the Matter of Implementation of Section 11 of the Cable Television Consumer Protection and Competition Act of 1992 (with R. May), Federal Communications Commission (January 4, 2002)

In the Matter of Request for Comments on Deployment of Broadband Networks and Advanced Telecommunications (with R. May), National Telecommunications and Information Administration (December 19, 2001)

In the Matter of Implementation of the Telecommunications Act of 1996, Telecommunications Carriers’ Use of Customer Proprietary Network Information and Other Consumer Information; Implementation of the Non-Accounting Safeguards of Sections 271 and 272 of the Communications Act of 1934, As Amended (with T. Lenard and J. Harper), Federal Communications Commission (November 16, 2001)

In the Matter of Flexibility for Delivery of Communications by Mobile Satellite Service Providers (with W. Adkinson), Federal Communications Commission (October 22, 2001)

In the Matter of Deployment of Advanced Telecommunications Capability (with R. May), Federal Communications Commission (October 5, 2001)

In the Matter of Deployment of Advanced Telecommunications Capability (with R. May), Federal Communications Commission (September 24, 2001)

In the Matter of Nondiscrimination in Distribution of Interactive Television Services Over Cable (with R. May), Federal Communications Commission (March 19, 2001)

In the Matter of High-Speed Access to the Internet Over Cable and Other Facilities, Reply Comments (with R. May), Federal Communications Commission (December 1, 2000)

Testimony on Federal Communications Commission Reform, Before the Committee on Government Reform, Subcommittee on Government Management, Information and Technology, United States House of Representatives (October 6, 2000)

In the Matter of Public Interest Obligations of TV Broadcast Licensees (with R. May), Federal Communications Commission (March 27, 2000)

NERA Economic Consulting 11

Jeffrey A. Eisenach, Ph.D.

Testimony on Truth in Billing Legislation, Before the Subcommittee on Telecommunications, Trade and Consumer Protection, Committee on Commerce, United States House of Representatives (March 9, 2000)

In the Matter of GTE Corporation, Transferor and Bell Atlantic, Transferee for Consent to Transfer of Control, (with R. May), Federal Communications Commission (February 15, 2000)

Testimony on Reforming Telecommunications Taxes in Virginia, Governor’s Commission on Information Technology (October 26, 1999)

Testimony on Telecommunications Taxes, Advisory Commission on Electronic Commerce (September 14, 1999)

In the Matter of GTE Corporation, Transferor and Bell Atlantic, Transferee for Consent to Transfer of Control, Federal Communications Commission (December 23, 1998)

In the Matter of Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996 (with C. Eldering), Federal Communications Commission (September 14, 1998)

Testimony on Section 706 of the Telecommunications Act of 1996 and Related Bandwidth Issues, Before the Subcommittee on Communications Committee on Commerce, Science, and Transportation, United States Senate (April 22, 1998)

Testimony on the Impact of the Information Revolution on the Legislative Process and the Structure of Congress, Before the Subcommittee on Rules and Organization of the House of the Committee on Rules, United States House of Representatives (May 24, 1996)

Testimony on Efforts to Restructure the Federal Government, Before the Committee on Governmental Affairs, United States Senate (May 18, 1995)

Testimony on the Role of the Department of Housing and Urban Development and the Crisis in America’s Cities, Before the Committee on Banking and Financial Services, United States House of Representatives (April 6, 1995)

Academic Publications and White Papers Balancing Incentives for the Migration to Fibre Networks (with B. Soria), NERA Economic Consulting for Vodafone Group PLC (March 2017) Impacts of Potential Aluminum Tariffs on the U.S. Economy (with David Harrison), NERA Economic Consulting for Emirates Group Aluminium (June 2017) “US Merger Enforcement in the Information Technology Sector,” Handbook of Antitrust, Intellectual Property and High Tech (Roger Blair and Daniel Sokol, eds.) Cambridge University Press, 2017 Making America Rich Again: The Latino Effect on Economic Growth, NERA Economic Consulting, December 2016

NERA Economic Consulting 12

Jeffrey A. Eisenach, Ph.D.

“The Economics of Zero Rating,” in Net Neutrality Reloaded: Zero Rating, Specialised Service, Ad Blocking and Traffic Management (L. Belli, ed.) Annual Report of the UN IGF Dynamic Coalition on Net Neutrality, December 2016 The Long-Run Effects of Employment Regulation on California’s Economy, U.S. Chamber of Commerce, July 2016

A New Regulatory Framework for the Digital Ecosystem (with B. Soria), GSMA and NERA Economic Consulting, February 10, 2016

Broadband Market Performance in Canada: Implications for Policy, NERA Economic Consulting, October 2015

“Looking Ahead: The FTC’s Role in Information Technology Markets” (with I.K. Gotts), George Washington University Law Review 83;6, November 2015

Right-to-Work Laws: The Economic Evidence, NERA Economic Consulting, June 18, 2015

The Economics of Zero Rating, NERA Economic Consulting, March 2015

“In Search of a Competition Doctrine for Information Technology Markets: Recent Antitrust Developments in the Online Sector” (with I. K. Gotts), in Competition and Communications Law: Key Issues in the Telecoms, Media and Technology Sectors, Kluwer Law International, 2014.

Economic Effects of Imposing Third-Party Liability on Payment Processors, NERA Economic Consulting, July 2014

Delivering for Television Viewers: Retransmission Consent and the U.S. Market for Video Content, NERA Economic Consulting, July 2014

The ABCs of “Pick-and-Pay,” NERA Economic Consulting, June 2014

“Mobile Wireless Performance in the EU and the US: Implications for Policy” (with E. Bohlin and C. Caves), Communications and Strategies 93, 2014

“The Sound Recording Performance Right at a Crossroads: Will Market Rates Prevail?” Commlaw Conspectus 22, 20132014

An Empirical Analysis of the Value of Information Sharing in the Market for Online Content (with H. Beales), Navigant Economics, February 2014

The Equities and Economics of Property Interests in TV Spectrum Licenses, Navigant Economics, January 2014

Mobile Wireless Market Performance in Canada: Lessons from the EU and the US (with E. Bohlin and C. Caves), Navigant Economics, September 2013

NERA Economic Consulting 13

Jeffrey A. Eisenach, Ph.D.

“Avoiding Rent-Seeking in Secondary Market Spectrum Transactions,” (with H. Singer), Federal Communications Law Journal 65;3, June 2013

Understanding Webcaster Royalties, Navigant Economics, June 2013

Mobile Wireless Performance in the EU and the US (with E. Bohlin and C. Caves), GSMA and Navigant Economics, May 2013

“The Long-Run Effects of Copper-Loop Unbundling and the Implications for Fiber” (with R. Crandall and A. Ingraham), Telecommunications Policy 37, 2013

Putting Consumers First: A Functionality-Based Approach to Online Privacy (with H. Beales), Navigant Economics, January 2013

“What Happens When Local Phone Service is Deregulated?” (with K. Caves), Regulation, September 2012

“Economic and Legal Aspects of FLSA Exemptions: A Case Study of Companion Care” (with K. Caves), Labor Law Journal, September 2012

The Long-Run Impact of Copper Unbundling and the Implications for Fiber (with R. Crandall and A. Ingraham), Navigant Economics, March 2012

Estimating the Economic Impact of Repealing the FLSA Companion Care Exemption (with K. Caves), Navigant Economics, March 2012

The Impact of Liberalizing Price Controls on Local Telephone Service: An Empirical Analysis (with K. Caves), Navigant Economics, February 2012

“Spectrum Reallocation and the National Broadband Plan,” Federal Communications Law Journal 64;1, December 2011

The Rural Utilities Service Should Reassess its Reliance on Universal Service High-Cost Support to Leverage Broadband Loans, Navigant Economics, September 2011

The Effects of Regulation on Economies of Scale and Scope in TV Broadcasting, Navigant Economics, June 2011

Evaluating the Cost-Effectiveness of RUS Broadband Subsidies: Three Case Studies, Navigant Economics, April 2011

Revenues from a Possible Spectrum Incentive Auction: Why the CTIA/CEA Estimate is Not Reliable, Navigant Economics, April 2011

Competition in the New Jersey Communications Market: Implications for Reform, Navigant Economics, March 2011

The Role of Independent Contractors in the U.S. Economy, Navigant Economics, December 2010

NERA Economic Consulting 14

Jeffrey A. Eisenach, Ph.D.

“Vertical Separation of Telecommunications Networks: Evidence from Five Countries” (with R. Crandall and R. Litan), Federal Communications Law Journal 62;3, June 2010

Video Programming Costs and Cable TV Prices: A Reply to CRA, (with K. Caves), Navigant Economics, June 2010

Video Programming Costs and Cable TV Prices, Navigant Economics, April 2010

Retransmission Consent and Economic Welfare: A Reply to Compass Lexecon, Navigant Economics, April 2010

The Benefits and Costs of Implementing ‘Return-Free’ Tax Filing In the U.S. (with R. Litan and C. Caves), Navigant Economics, March 2010

“The Impact of Regulation on Innovation and Choice in Wireless Communications” (with E. Ehrlich and W. Leighton), Review of Network Economics 9;1, 2010

Uncollected Sales Taxes on Electronic Commerce (with R. Litan), Empiris LLC, February 2010

The Economics of ESPN360.com, Empiris LLC, November 2009

“Net Neutrality versus Consumer Welfare,” in The Consequences of Net Neutrality Regulations on Broadband Investment and Consumer Welfare: A Collection of Essays, American Consumer Institute, November 2009

The Economics of Retransmission Consent, Empiris LLC, March 2009

Economic Effects of Tax Incentives for Broadband Infrastructure Deployment (with H. Singer and J. West), Empiris LLC, January 5, 2009

“An Event Analysis Study of the Economic Implications of the FCC’s UNE Decision: Backdrop For Current Network Sharing Proposals,” (with P. Lowengrub and J.C. Miller III), Commlaw Conspectus 17;1, 2008

“Broadband Policy: Does the U.S. Have It Right After All?” in Telecommunications Policy & Regulation, Practicing Law Institute, December 2008

“Broadband in the U.S. – Myths and Facts,” in Australia’s Broadband Future: Four Doors to Greater Competition, Committee for Economic Development of Australia, 2008

The Benefits and Costs of I-File, (with R. Litan and K. Caves), Criterion Economics, LLC, April 14, 2008

“Irrational Expectations: Can a Regulator Credibly Commit to Removing an Unbundling Obligation?” (with Hal J. Singer), AEI-Brookings Joint Center Related Publication 07-28, December 2007

Due Diligence: Risk Factors in the Frontline Proposal, Criterion Economics, LLC, June 28, 2007

NERA Economic Consulting 15

Jeffrey A. Eisenach, Ph.D.

The Effects of Providing Universal Service Subsidies to Wireless Carriers (with K. Caves), Criterion Economics, LLC, June 13, 2007

Assessing the Costs of the Family and Medical Leave Act, Criterion Economics, LLC, February 16, 2007

Improving Public Safety Communications: An Analysis of Alternative Approaches (with P. Cramton, T. Dombrowsky, A. Ingraham, H. Singer) Criterion Economics, LLC, February 6, 2007

Economic and Regulatory Implications of Unregulated Entry in the Canadian Mortgage Insurance Market, Criterion Economics, LLC, June 20, 2006

The FCC’s Further Report on A La Carte Pricing of Cable Television (with R. Ludwick) The CapAnalysis Group, LLC, March 6, 2006

The EX-IM Bank’s Proposal to Subsidize the Sale of Semiconductor Manufacturing Equipment to China: Updated Economic Impact Analysis (with J.C. Miller III, R. Ludwick), The CapAnalysis Group, LLC, November 2005

Retransmission Consent and Cable Television Prices (with D. Trueheart), The CapAnalysis Group, LLC, March 2005

The EX-IM Bank’s Proposal to Subsidize the Sale of Semiconductor Manufacturing Equipment to China: An Economic Impact Analysis (with J.C. Miller III, R. Ludwick, O. Grawe), The CapAnalysis Group, LLC, January 2005.

Peer-to-Peer Software Providers’ Liability under Section 5 of the FTC Act (with J.C. Miller III, L. Fales, C. Webb), The CapAnalysis Group, LLC and Howrey LLP, April 2004

Mandatory Unbundling: Bad Policy for Prison Payphones (with D. Trueheart, J. Mrozek), The CapAnalysis Group, LLC, March 2004

UNE Rates Do Not Reflect Underlying Costs: A Rebuttal to Ekelund and Ford (with J. Mrozek), The CapAnalysis Group, LLC, January 30, 2004

Do UNE Rates Reflect Underlying Costs? (with J. Mrozek), The CapAnalysis Group, LLC, December 2003

Rising Cable TV Rates: Are Programming Costs the Villain? (with D. Trueheart), The CapAnalysis Group, LLC, October 2003

Economic Implications of the FCC’s UNE Decision: An Event Analysis Study (with J.C. Miller III, P. Lowengrub, The CapAnalysis Group, LLC, April 2003

“Telecom Deregulation and the Economy: The Impact of ‘UNE-P’ on Jobs, Investment and Growth” (with T. Lenard), Progress on Point 10.3, The Progress & Freedom Foundation, January 2003.

NERA Economic Consulting 16

Jeffrey A. Eisenach, Ph.D.

“The CLEC Experiment: Anatomy of a Meltdown” (with L. Darby and J. Kraemer) Progress on Point 9.23, The Progress & Freedom Foundation, September 2002

“The Debate Over Digital Online Content: Understanding the Issues” (with W. Adkinson, Jr.) Progress on Point 9.14, The Progress & Freedom Foundation, April 2002

“Electricity Deregulation after Enron,” Progress on Point 9.11, The Progress & Freedom Foundation, April 2002

“Political Privacy: Is Less Information Really Better?” Progress on Point 9.2, The Progress & Freedom Foundation, January 2002

“Communications Deregulation and FCC Reform: Finishing the Job” (with R. May), in Communications Deregulation and FCC Reform: What Comes Next? (ed., with R. May) Kluwer Academic Publishers, 2001

“Does Government Belong in the Telecom Business?” Progress on Point 8.1, The Progress & Freedom Foundation, January 2001

“Critics Fear Surveillance of Web Surfers Compromising Personal Privacy,” Progress on Point 7.11, The Progress & Freedom Foundation, July 2000

“Access Charges and The Internet: A Primer,” Progress on Point 7.9, The Progress & Freedom Foundation, June 2000

“The Need for a Practical Theory of Modern Governance,” Progress on Point 7.7, The Progress & Freedom Foundation, May 2000

“The Microsoft Monopoly: The Facts, the Law and the Remedy” (with T. Lenard) Progress on Point 7.4, The Progress & Freedom Foundation, April 2000

“Regulatory Overkill: Pennsylvania’s Proposal to Breakup Bell Atlantic” (with C. Eldering, R. May) Progress on Point 6.13, The Progress & Freedom Foundation, December 1999

“Is There a Moore's Law for Bandwidth?” (with C. Eldering, M. Sylla), IEEE Communications Magazine, October 1999

“The High Cost of Taxing Telecom,” Progress on Point 6.6, The Progress & Freedom Foundation, September 1999

“Creating the Digital State: A Four Point Program,” Progress on Point 6.4, The Progress & Freedom Foundation, August 1999

“How to Recognize a Regulatory Wolf in Free Market Clothing: An Electricity Deregulation Scorecard,” (with T. Lenard) Progress on Point 6.3, The Progress & Freedom Foundation, July 1999

NERA Economic Consulting 17

Jeffrey A. Eisenach, Ph.D.

“Into the Fray: The Computer Industry Flexes Its Muscle on Bandwidth,” Progress on Point 5.9, The Progress & Freedom Foundation, December 1998

“Surprise: Even in Electricity, the Market Works,” The Progress & Freedom Foundation, Nov. 1998

“Finally! An ‘Electricity Deregulation’ Bill That Deregulates,” Progress on Point 5.7, The Progress & Freedom Foundation, October 1998

“Time to Walk the Walk on Telecom Policy,” Progress on Point 4.3, The Progress & Freedom Foundation, July 1997

“The FCC and the Telecommunications Act of 1996: Putting Competition on Hold?" (with G. Keyworth), Progress on Point 2.1, The Progress & Freedom Foundation, October 1996

“Forebearance, Self-Certification and Privatization” (with J. Gattuso, et al) Future Insight No. 3.2, The Progress & Freedom Foundation, May 1996

“Privatizing the Electromagnetic Spectrum” (with R. Crandall, et al) Future Insight No. 3.1, The Progress & Freedom Foundation, April 1996

“Broadcast Spectrum: Putting Principles First” (with R. Crandall et al) Progress on Point 1.9, The Progress & Freedom Foundation, January 1996

“How (Not) to Solve the Liability Crisis,” in P. McGuigan, ed., Law, Economics & Civil Justice Reform: A Reform Agenda for the 1990’s, Free Congress Foundation, 1995

“The Future of Progress,” Future Insight 2.3, The Progress & Freedom Foundation, May 1995

“American Civilization and the Idea of Progress,” in D. Eberly, ed., Building a Community of Citizens: Civil Society in the 21st Century, University Press of America, 1994

“Fighting Drugs in Four Countries: Lessons for America?” Backgrounder 790, The Heritage Foundation, Washington, DC, September 24, 1990

“Drug Legalization: Myths vs. Reality,” Heritage Backgrounder 122, The Heritage Foundation, January 1990

“How to Ensure A Drug-Free Congressional Office,” The Heritage Foundation, January 1990

“A White House Strategy for Deregulation,” in Mandate for Leadership III, The Heritage Foundation, 1989

“From George Bush, A Convincing Declaration of War on Drugs,” Executive Memorandum No. 250, The Heritage Foundation, September 14, 1989

“Winning the Drug War: What the States Can Do,” Heritage Backgrounder 715/S, July 7, 1989

“Why America is Losing the Drug War,” Heritage Backgrounder 656, June 9, 1988

NERA Economic Consulting 18

Jeffrey A. Eisenach, Ph.D.

“Selectivity Bias and the Determinants of SAT Scores,” (with A. Behrendt and W. Johnson) Economics of Education Review 5;4, 1986

“Review of Banking Deregulation and the New Competition in the Financial Services Industry,” Southern Economic Journal 52;3, January 1986

“Warranties, Tie-ins, and Efficient Insurance Contracts: A Theory and Three Case Studies,” (with R. Higgins and W. Shughart II), Research in Law and Economics 6, 1984

“Regulatory Relief under Ronald Reagan," (with James C. Miller III), in Wayne Valis, ed., The Future Under President Reagan, Arlington House, 1981

Books and Monographs An American Strategy for Cyberspace: Advancing Freedom, Security, and Prosperity, (with C. Barfield, et al) American Enterprise Institute for Public Policy Research, June 2016

Broadband Competition in the Internet Ecosystem, AEI Economic Studies, American Enterprise Institute for Public Policy Research, October 2012

The Impact of State Employment Policies on Job Growth: A 50-State Review (with David S. Baffa, et al), U.S. Chamber of Commerce, March 2011

The Digital Economy Fact Book 2002, (with W. Adkinson Jr. and T. Lenard) The Progress & Freedom Foundation, August 2002

Privacy Online: A Report on the Information Practices and Policies of Commercial Web Sites, (with W. Adkinson, Jr., T. Lenard) The Progress & Freedom Foundation, March 2002

The Digital Economy Fact Book 2001, (with T. Lenard, S. McGonegal) The Progress & Freedom Foundation, August 2001

Communications Deregulation and FCC Reform: What Comes Next? (ed., with R. May) Kluwer Academic Publishers, 2001

The Digital Economy Fact Book 2000, (with T. Lenard, S. McGonegal) The Progress & Freedom Foundation, August 2000

Digital New Hampshire: An Economic Factbook, (with R. Frommer, T. Lenard) The Progress & Freedom Foundation, December 1999

The Digital Economy Fact Book, (with A. Carmel and T. Lenard), The Progress & Freedom Foundation, August 1999

Competition, Innovation and the Microsoft Monopoly: Antitrust in the Digital Marketplace, (ed., with T. Lenard), Kluwer Academic Publishers, 1999

The People’s Budget, (with E. Dale, et al), Regnery Publishing, 1995

NERA Economic Consulting 19

Jeffrey A. Eisenach, Ph.D.

The Telecom Revolution: An American Opportunity, (with G. Keyworth, et al) The Progress & Freedom Foundation, 1995

Readings in Renewing American Civilization, (ed. with S. Hanser) McGraw-Hill, Inc., 1993

America's Fiscal Future 1991: The Federal Budget's Brave New World, Hudson Institute, 1991

Winning the Drug War: New Challenges for the 1990’s, (ed.) The Heritage Foundation, Washington, DC, 1991

Drug-Free Workplace Policies for Congressional Offices, (ed.) The Heritage Foundation, Washington, DC, 1991

America's Fiscal Future: Controlling the Federal Deficit in the 1990’s, Hudson Institute, 1990

The Five-Year Budget Outlook, Hudson Institute, 1988

The Role of Collective Pricing in Auto Insurance, Federal Trade Commission, Bureau of Economics Staff Study, 1985

Selected Short Articles and Op-Eds “Spectrum Favoritism is Bad Economics,” Forbes, April 28, 2015

“Competition is the Only Way to Preserve an Open Internet,” Real Clear Markets, December 18, 2014

“End the Internet Blackout on Airplanes,” The Hill, December 12, 2013

“Trolling for a Patent Policy Fix,” Roll Call, September 19, 2013

“A Good News Story: The Internet,” AEIdeas, May 31, 2013

“Should You Let the IRS Do Your Taxes for You?” The Daily Caller, May 1, 2013

“Net Neutrality as ‘Crony Capitalism,’” AEIdeas, November 2, 2012

“Broadband Competition in the Internet Ecosystem: A Conflict of Visions,” AEIdeas, October 18, 2012

“The Internet Doesn’t Need More Regulation,” The American: The Journal of the American Enterprise Institute, September 25, 2012

“Follow Obama’s Lead on Wireless,” The Australian, February 7, 2011

“The Radicalism of Net Neutrality,” The Hill, September 2, 2010

“Net Neutrality Rules Threaten Telecom Détente,” Law360.com, August 10, 2010

“Don’t Drag Broadband Into the Net Neutrality Morass,” The Daily Caller, July 13, 2010

NERA Economic Consulting 20

Jeffrey A. Eisenach, Ph.D.

“Coase vs. the Neo-Progressives,” (with A. Thierer), The American: The Journal of the American Enterprise Institute (October 28, 2009)

“The U.S. Abandons the Internet,” (with J. Rabkin), The Wall Street Journal, October 3, 2009

“A La Carte Regulation of Pay TV: Good Intentions vs. Bad Economics,” (with A. Thierer) Engage, June 2008

“A New Takings Challenge to Access Regulation,” American Bar Association, Section on Antitrust Law, Communications Industry Committee Newsletter, Spring 2007

“Reagan’s Economic Policy Legacy,” (with J.C. Miller III), The Washington Times, August 8, 2004

“Do Right by Minority Farmers,” The Washington Times, July 17, 2003

“Pruning the Telecom Deadwood,” The Washington Times, November 1, 2002

“The Real Telecom Scandal,” The Wall Street Journal, September 30, 2002

“Ensuring Privacy’s Post-Attack Survival,” (with Peter P. Swire) CNET News.com, September 11, 2002

“One Step Closer to 3G Nirvana,” CNET News.com, August 6, 2002

“Reviving the Tech Sector,” The Washington Times, July 10, 2002

“Broadband Chickens in Age of the Internet,” The Washington Times, March 11, 2002

“Watching the Detectives,” The American Spectator, January/February 2002

“Can Civil Liberties Survive in a Society Under Surveillance?” Norfolk Virginian-Pilot, November 18, 2001

“Microsoft Case: There Are Still Antitrust Laws,” Newport News Daily Press, July 6, 2001

“Dear Diary: There’s Still an Antitrust Law,” Los Angeles Times, June 29, 2001

“Lost in Cyberspace? Does the Bush Administration Get the New Economy?” The American Spectator, June 2001

“Local Loop: NASDAQ Noose, Al Gore’s Internet Socialism is Choking the Technology Sector,” The American Spectator, April 2001

“Local Loop, High-Tech Noose,” The American Spectator, March 2001

“Rescue Opportunity at the FCC,” The Washington Times, February 4, 2001

“Economic Anxieties in High-Tech Sector,” The Washington Times, December 12, 2000

NERA Economic Consulting 21

Jeffrey A. Eisenach, Ph.D.

“Nation’s Conservatives Should Support a Breakup of Microsoft,” The Union Leader & New Hampshire Sunday News, February 22, 2000

“Benefits Riding on a Breakup,” The Washington Times, November 14, 1999

“Still Wondering What Cyberspace is All About?” Insight on the News, Vol. 15, No. 11, March 22, 1999

“Computer Industry Flexes Its Muscle,” Intellectual Capital.com, January 28, 1999

“Ira Magaziner Targets the Internet,” The Washington Times, March 26, 1997

“Revolution – or Kakumei” Forbes ASAP, December 1996

“Digital Charity,” Intellectual Capital.com, November 28, 1996

“Time to Junk the Telecom Act,” Investor’s Business Daily, July 23, 1998

“Consumers Win in Mergers,” Denver Post, July 5, 1998

“Microsoft’s Morality Play,” News.com, March 11, 1998

“California Will Soon Be Eating Dust,” Forbes Magazine, August 1997

“Watch Out for Internet Regulation,” The Washington Times, July 9, 1997

“Those GOP Blockheads Just Don’t Get It; Block Grants are Merely another Bogus Solution,” The Washington Post, September 3, 1995

“Replace, Don’t Reinvent, HUD,” The Wall Street Journal, May 11, 1995

“Poor Substitute,” (with P. du Pont), National Review, December 31, 1994

“Just Say No to More Drug Clinics,” St. Louis Post-Dispatch, June 14, 1991

“Drug Rehab Funding is No Panacea,” Chicago Tribune, June 7, 1991

“The Vision Thing, Conservatives Take Aim at the ‘90’s,” Policy Review 52, Spring 1990

“What States Can Do To Fight the Drug War,” The Washington Times, September 4, 1989

“Congress: Reform or Transform,” (with P. McGuigan), Washington Times, June 12, 1989

“How to Win the War on Drugs: Target the Users,” USA Today, January 1989

“Invest Social Security Surplus in Local Project Bonds,” Wall Street Journal, January 4, 1989

“The Government Juggernaut Rolls On,” Wall Street Journal, May 23, 1988

NERA Economic Consulting 22

Jeffrey A. Eisenach, Ph.D.

“Is Regulatory Relief Enough?” (with M. Kosters), Regulation 6, March/April 1982

“Price Competition on the NYSE,” (with J.C. Miller III), Regulation 4, Jan./Feb. 1981

Selected Presentations “A New Regulatory Framework for the Internet Ecosystem,” GSMA Mobile World Congress, Ministerial Program, February 22, 2016

“Regulatory Benefit-Cost Analysis: Applications Under Dodd/Frank,” Second Annual Attorney General Public Policy Institute Conference on Financial Services Regulation, Law & Economics Center, George Mason University School of Law, June 4, 2012

“Exploring Developments in the Communications Sector,” National Regulatory Conference, May 17, 2012

“Platform Competition in the Internet Ecosystem: Implications for Regulation,” Mercatus Institute, November 8, 2011

“Competition in the Internet Ecosystem,” American Consumer Institute, June 30, 2011

“The Future of Mobile Broadband: Platform Competition in the Internet Ecosystem,” Informa Telecoms and Media North America Broadband Traffic Management Conference, June 21, 2011

“The Communications Sector and Economic Growth,” Innovation Policy Institute, March 2, 2011

“The Benefits and Costs of I-File,” Council for Electronic Revenue Communications Advancement, May 2008

“Sell Globally, Sue Locally: The Growing Perils of Global ‘Dominance,’” Antitrust Section, Ohio State Bar Association, October 27, 2006

“The Growing Global Perils of ‘Dominance,’” Aspen Summit Conference, August 21, 2006

“Telecoms in Turmoil: What We Know and (Mostly) Don’t Know About the Telecom Marketplace in 2006,” National Regulatory Conference, May 11, 2006

“Mandatory Unbundling in the U.S.: Lessons Learned the Hard Way,” Telstra Corporation, November 25, 2005

“The Fourth ‘S’: Digital Content and the Future of the IT Sector,” Federal Communications Bar Association, May 2, 2003

“Restoring IT Sector Growth: The Role of Spectrum Policy in Re-Invigorating ‘The Virtuous Circle,’” National Telecommunications and Information Administration Spectrum Summit, April 2, 2002

NERA Economic Consulting 23

Jeffrey A. Eisenach, Ph.D.

“Restoring IT Sector Growth-Why Broadband, Intellectual Property and Other E-Commerce Issues Are Key to a Robust Economy,” August 2001

“Remarks at the 2000 Global Internet Summit,” March 14, 2000

“The Digital State: Remarks on Telecommunications Taxes,” Address Before the Winter Meeting of the National Governors Association, February 21, 1999

“The Digital Economy,” Address at the George Mason University Conference on The Old Dominion and the New Economy, November 1998

“A Convergence Strategy for Telecommunications Deregulation,” Remarks at the United States Telephone Association’s Large Company Meeting, September 1998

NERA Economic Consulting 24