Before the Competition Bureau Canada EXPERT REPORT OF

Market Study Notice: TELUS Communications Inc. Competition in Broadband Services November 2, 2018 ABRIDGED Appendix B - REVISED

Before the Competition Bureau Canada

EXPERT REPORT OF CHRISTIAN M. DIPPON, Ph.D. On Behalf of TELUS Communications Inc.

Market Study Notice: Competition in Broadband Services

Redacted Version

August 31, 2018

Market Study Notice: TELUS Communications Inc. Competition in Broadband Services November 2, 2018 ABRIDGED Appendix B - REVISED Before the Competition Bureau Canada Market Study Notice: Competition in Broadband Services

Table of Contents

I. QUALIFICATIONS ...... 4 II. PURPOSE OF THE REPORT ...... 6 III. SUMMARY OF FINDINGS ...... 6 IV. INTRODUCTION ...... 13 V. THE BUREAU MUST FOCUS ON MARKET PERFORMANCE ...... 17 A. Market Failure Is a Necessary but Not Sufficient Condition for Preventing Resellers from Fulfilling Their Competitive Roles ...... 17 B. The Canadian Broadband Market Is Competitive ...... 18 VI. RESELLERS HAVE BEEN ABLE TO DEPLOY COMPETITIVELY EFFECTIVE SERVICES ...... 22 A. The Bureau Misinterpreted the Resellers Performances ...... 22 1. There are not 550 resellers ...... 23 2. The reseller’s alleged lower price point is unreliable ...... 27 3. The 87 percent market share figure is misleading ...... 31 B. Canadian Resellers Have Been Able to Succeed ...... 33 1. Other service providers represent the fastest growing type of ISP ...... 34 2. A 13 percent market share is evidence of market success ...... 35 C. Plan Choices Underscore the Robustness of the Broadband Market ...... 38 1. Resellers pursue different marketing strategies ...... 39 2. Resellers offer different plan choices ...... 41 3. Resellers pursue different pricing strategies ...... 41 VII. CONSUMERS HAVE REACTED POSITIVELY TO RESELLER OFFERINGS ...... 44 A. Canadian Consumers Are Aware of Resellers ...... 44 B. The Resellers’ Limited Service Offerings Limit Their Attractiveness ...... 47 C. Industry Contractual Practices Do Not Prevent Reseller Success ...... 48 VIII. CONCLUSION AND SUMMARY RESPONSES ...... 48 APPENDIX A: CURRICULUM VITAE OF CHRISTIAN M. DIPPON, PH.D...... 52

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List of Figures

Figure 1. Market Share of Non-Facilities-Based Providers After Wholesale Access Was Allowed (2003-2016)...... 37 Figure 2. Advertising Example – Distributel ...... 46

List of Tables

Table 1. Residential ARPU per Month by Type of Fixed Service Provider ...... 15 Table 2: Weighted Residential ARPU per Month by Type of Fixed Service Provider ...... 16 Table 3. Wall and Nordicity Demand Levels Fixed Broadband Access ...... 29 Table 4. US Broadband Cable Subscribers by Type of Purchase ...... 33 Table 5. Incumbent Shares as of 271 Application Filings ...... 38 Table 6. The Reseller Is Less Expensive (Example 1) ...... 42 Table 7. Facilities-based Provider Is Less Expensive (Example 2) ...... 42 Table 8. Facilities-based Provider and Reseller Offer Different Plans (Example 3) ...... 43

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Expert Report of Christian M. Dippon, Ph.D.

I. QUALIFICATIONS

1. My name is Christian M. Dippon. I am an economist and Managing Director at NERA

Economic Consulting (NERA) where I chair NERA’s Global Energy, Environment,

Communications, and Infrastructure (EECI) Practice. NERA provides expert economic

and financial analysis for firms and government bodies on a wide variety of issues.

Founded in 1961, NERA serves clients from more than 25 offices across North America,

Europe, and Asia. My business address is 1255 23rd Street NW, Suite 600, Washington,

DC 20037.

2. I hold a Ph.D. in Economics from Curtin University (Perth, Australia), an M.A. in

Economics from the University of California, and a B.A. with honors in Business

Administration from California State University. I have specialized in telecommunications

economics for over 22 years, especially in wireline, wireless, cable, and emerging

technologies. I serve on the Board of Directors of the International Telecommunications

Society (ITS), and I am a member of the Federal Communications Bar Association

(FCBA), the American Bar Association (ABA), and the American Economics Association

(AEA). I have authored and edited several books as well as book chapters in anthologies

and have written numerous articles on telecommunications competition and strategies. I

also frequently lecture in these areas at industry conferences, continuing education

programs for lawyers, and universities. National and international newspapers and

magazines, including the Financial Times, Business Week, Forbes, the Chicago Tribune,

and the Sydney Morning Herald, have cited my work.

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3. My experience in telecommunications and media includes assessing the competitive

impact of mergers and acquisitions, the need (or lack thereof) for state and federal

regulatory intervention and reform, the industry impact of competition policy, reviews of

alleged anticompetitive conduct, the analysis of economic damages in complex business

disputes, and the allocation of radio spectrum. I also have assessed the level of competition

in the telecommunications sector of several countries and consulted on cases involving

industry standards.

4. I have testified on telecommunication matters before the U.S. Federal Communications

Commission (FCC), the International Trade Commission (ITC), U.S. federal and state

courts, arbitration panels, international competition and regulatory authorities, and

numerous U.S. state regulatory commissions. In Canada, I have testified before the Ontario

Superior Court of Justice; the Superior Court, Province of Quebec, District of Montreal;

the Supreme Court of British Columbia, Vancouver Registry; the Canadian Radio-

television and Telecommunications Commission (CRTC); and Innovation, Science and

Economic Development (ISED). In 2012, the Bureau retained me to provide expert

testimony in a false advertising investigation against Chatr Wireless.

5. Relevant to this consultation, I have testified, published, and consulted on wholesale local

access, last-mile cost modeling, and non-facilities-based entry and their effects on

competition. I have also extensively studied and testified on the competitive forces in the

Canadian telecommunications sector. Appendix A of this report contains my curriculum

vitae.

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II. PURPOSE OF THE REPORT

6. This report was prepared at the request of TELUS Communications Inc. (TELUS) in

response to the Competition Bureau Canada’s “Market Study Notice: Competition in

Broadband Services” (the Notice).1 TELUS has requested that I review and respond to the

Bureau’s questions related to the impact of resellers of residential broadband Internet

services on competition. Specifically, my report responds to topics pertaining to resellers

raised in questions (a) and (b) in the Bureau’s Notice.

7. The structure of this report is as follows. Section III provides a summary of my findings,

which highlights that the competitive dynamics of the Canadian broadband market is

working properly and that the resellers’ share of this market correctly reflects consumer

value for these services. Section IV provides a short introduction. In Section V, I address

the need, or lack thereof, of additional regulatory intervention by examining the

competitive dynamics of the Canadian broadband market. Section VI responds to question

(a) Have resellers been able to deploy competitively effective service offers? Section VII

addresses question (b) How have consumers reacted to new competitive alternatives?

Section VIII presents my conclusions and summarizes my responses to the Bureau’s

questions (a) and (b).

III. SUMMARY OF FINDINGS

8. Canada is one of the most connected nations in the world with 97 percent of Canadian

households having access to wireline broadband services at 5 Mbps or higher download

1 See Government of Canada, Competition Bureau Canada, “Market Study Notice: Competition in Broadband Services,” modified May 10, 2018 (hereafter Notice). NERA Economic Consulting Page 6 of 62

speeds and an average fixed wireline connection speed of 78.6 Mbps. Moreover, Canadians

have a choice of Internet Service Providers (ISPs), including telephone companies, cable

companies, mobile wireless companies, other facilities-based companies, satellite

companies, fixed wireless companies, and resellers that gain wholesale access to the

incumbent telephone or cable providers’ networks via regulated wholesale pricing and

terms and conditions.

9. Against this backdrop, the Canadian Radio-television and Telecommunications

Commission (CRTC) reports that as of 2016 telephone and cable providers served 87

percent of the nation’s fixed broadband subscribers. Other service providers, including

fixed wireless, satellite, facilities based non-incumbent providers, and resellers reportedly

served the remaining 13 percent. The Bureau understands (although incorrectly so) that

over 550 resellers are attempting to serve Canadian residential broadband subscribers, and

that resellers are offering discounts up to 30 percent relative to the incumbent telephone

and cable providers. The Bureau seeks to understand this alleged outcome where the

incumbent telephone and cable providers continue to serve most Canadian consumers when

there are seemingly so many resellers with lower prices out there vying for the business.

10. Before addressing the Bureau’s questions, it is important to understand that regulators must

be agnostic to the competitive outcome, including who benefits from the competitive

process and the distribution of market shares. Rather, the Bureau’s function is to ensure

that the wholesale access market is working properly, which, in turn, ensures that the retail

market is performing optimally. Thus, although the Bureau’s observations (which are

incorrect) might serve as its motivation to examine wholesale market performance, the

discussion must not evolve around reseller performance or potential regulations that would

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benefit these providers. Under competitive market conditions, consumer choice, not

regulation, must determine the success, or lack thereof, of resellers.

11. Competition for broadband access is vigorous and dynamic with multiple ISPs from which

consumers can select. Dr. Jeffrey Eisenach of NERA came to this conclusion when he

thoroughly examined competition in the Canadian broadband market.2 Dr. Robert Crandall

confirms this assessment, finding that market forces in the relevant market work properly.3

Furthermore, the creation of the regulated wholesale market in the late 1990s removed

entry barriers into the retail market making the latter fully contestable. This, in turn,

enabled resellers to enter the retail market and compete with incumbents and other service

providers. Considering these important findings, the answers to the Bureau’s questions are:

(a) The broadband market functions optimally, and relatedly (b) The performance of

resellers reflects the value that consumers attribute to the services offered by these ISPs.

No further regulatory intervention is required.

12. The CRTC appears to have reached a similar conclusion because to date it has relied on

market forces to further deploy broadband services and set retail prices. More importantly,

the CRTC has not found that the broadband market does not work optimally. To the

contrary, it has found that regulation would not be more effective in making broadband

access services available to Canadians than competition would be.

13. Notwithstanding the compelling evidence of market competition, there are specific reasons

that explain the Bureau’s observations. First, the Bureau misinterprets the data with respect

2 See Review of Basic Telecommunications Services, Telecom Notice of Consultation CRTC 2015-134, Jeffrey A. Eisenach, Ph.D., “Broadband Market Performance in Canada: Implications for Policy,” NERA Economic Consulting, October 2015, on behalf of Bell Canada (hereafter Eisenach Broadband Report). 3 See Competition Bureau Canada, Market Study Notice: Competition in Broadband Services, Expert Report of Robert W. Crandall,” August 24, 2018, pp. 22-23 (hereafter Crandall Report). NERA Economic Consulting Page 8 of 62

to the resellers’ performances. Three verifiable observations underlie the Bureau’s

questions: (1) there are over 550 resellers, (2) resellers offer prices that are up to 30 percent

lower than those of facilities-based incumbent providers, and (3) the resellers have a market

share of 13 percent. Fact checking these observations reveals that the first two are factually

incorrect, whereas the third observation incorrectly assumes that resellers attempt to serve

all Canadian households and is thus insufficient to draw any conclusions about

competition.

14. With respect to the 550 resellers, the Bureau’s Notice concerns market performance as it

pertains to residential broadband services. However, many ISPs on the CRTC’s reseller list

do not provide residential broadband service. The Canadian Network Operators

Consortium (CNOC), the alternative service providers’ trade association, only lists 34

members. To establish a more accurate list of resellers in Canada, I examined the 2017

CRTC’s Communications Monitoring Report (CMR). 4 It makes no mention of 550

resellers and lists only four resellers, three of which remain in business and serve residential

broadband subscribers – Distributel Communications Limited (Distributel), Primus

Telecommunications Canada Inc (Primus), and TekSavvy Solutions Inc. (TekSavvy). #

4 The limited portion of the 2018 CMR that was released August 16, 2018 only consists of general household subscription and expenditure data, these data extend to 2016, as does the data in the 2017 CMR. (Canadian Radio- television and Telecommunications Commission, “Communications Monitoring Report 2018, Communications Services in Canadian Households: Subscriptions and Expenditures 2012-2016,” (hereafter CMR 2018). NERA Economic Consulting Page 9 of 62

# Thus, as a first

explanation to the Bureau’s understanding, there are a limited number of major resellers

that are actively competing for Canadian broadband subscribers. Hence, to answer the

Bureau’s questions, it must look to the service offerings by these providers.

15. The Bureau also errs in its understanding that resellers offer discounts of up to 30 percent

relative to facilities-based providers. The Bureau relied on a 2015 Wall Communications

study that purports to compare the prices of wireline, wireless, and Internet services in

Canada and select foreign jurisdictions.5 A similar, more recent study conducted by the

Nordicity Group Limited (Nordicity) reported similar differences.6 Unfortunately, neither

of these studies has been subject to public scrutiny by experts in the field. These studies

are conceptually deeply flawed, and they should not serve as the basis for reaching

conclusions about market performance. Both the Wall Study and the Nordicity Study

ignore important differences in plans, such as varying monthly data caps, quality of service,

and upload/download speeds, and both studies treat these plans as though they were

identical in all aspects to those of facilities-based providers, which they are not. This

apples-to-oranges comparison is meaningless because it attributes all price differences to

higher price levels (and thus causing the reader to incorrectly conclude that there is a lack

of competition) rather than different (e.g., richer) service plans. In fact, by Nordicity’s own

admission, the study is not meant to assess market performance.

5 See Wall Communications, “Price Comparisons of Wireline, Wireless and Internet Services in Canada and with Foreign Jurisdictions: 2015 Edition,” 2015 (hereafter the 2015 Wall Study). 6 See NGL Nordicity Group Ltd., “2017 Price Comparison Study of Telecommunications Services in Canada and Select Foreign Jurisdictions,” October 5, 2017 (hereafter the 2017 Nordicity Study). NERA Economic Consulting Page 10 of 62

16. By noting that facilities-based providers serve 87 percent of fixed broadband subscribers,

the Bureau implicitly assumes that the remaining 13 percent compete for the same

subscribers as fixed telephone and cable companies do. This is wrong. Many resellers focus

their broadband plans on relatively low download/upload speeds, which decreases the

number of subscribers that resellers attempt to serve. Resellers often also do not offer triple-

play bundles, which further decreases their potential subscriber base. These are

predominately strategic choices made by the resellers because through wholesale access

they can generally offer plans at the same speeds as their host networks.

17. Second, the Bureau seems to find the reported 87 percent segment share by facilities-based

providers excessive. This raises the question as to what the proper threshold is, if any, for

evaluating the competitive effectiveness of alternative providers. This question is not new.

In the United States with the breakup of AT&T, the FCC faced the same task in deciding

whether to allow the Bell Operating Companies (BOCs) to enter the long-distance market.

The regulator granted the request only if a BOC could show that alternative providers had

been sufficiently established in its local serving territory. Unlike the concerns raised by the

Bureau, the FCC specifically refrained from a market share test in examining whether the

wholesale market worked optimally. Moreover, at the time of the FCC’s state-specific

approvals for incumbents to enter the long-distance market, the providers had market

shares like the levels observed by the Bureau for the Canadian incumbents. This

international precedent confirms that reseller market shares are not sufficient to assess the

competitive impact of resellers on incumbent providers, and relatively low reseller market

shares do not imply that the market is not working optimally.

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18. Third, many resellers elect to offer services to a limited consumer base in selected

geographic regions. They distinguish themselves by offering different plan choices than

their competitors. Interestingly, despite having access to comparable download/upload

rates as their host networks, resellers generally elect to offer their subscribers lower speeds.

Lower speeds are correlated with lower prices, thereby giving the artificial appearance of

a cheaper offering. There are also geographic distinguishers that come into play. Resellers

generally focus on specific aspects of the Canadian broadband market, such as subscribers

dissatisfied with facilities-based providers with respect to price, customer service, term

contracts, and other fees. Other resellers focus on specific customer groups. The wide

variety of the market provides first-hand proof that resellers have been able to deploy

competitive services. The present regulatory regime removes all network-related barriers

to entry and allows resellers to pursue a broad range of marketing strategies.

19. Finally, reseller performance is also a function of price offerings. As expected in a

competitive retail market, resellers offer different pricing strategies that result in some

reseller plans being priced lower than the telephone and/or cable provider prices, whereas

other reseller plans are more expensive than their facilities-based peers. However, the plans

are usually very different, and there is no easy way to ascertain which plan is more

expensive. For instance, resellers frequently require customers to purchase or rent a

modem, whereas facilities-based providers often include the network equipment in the

monthly price. Many resellers also charge for installation whereas most facilities-based

providers often do not. In most cases, price perception depends on the value that the

consumer places on the plan differences.

20. Thus, the explanation for the Bureau’s observations is a combination of:

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. an incorrect count of resellers; . reliance on an unscientific pricing comparison study; . the mistaken assumption that resellers intend to serve all Canadian households; . an overreliance on incumbent market shares to judge competitive effectiveness; and . the unique pricing strategies pursued by resellers. 21. In response to the Bureau’s question of whether Canadian consumers are aware of their

choices, service providers build consumer awareness through their reputation and

marketing efforts. There is no reason to believe that resellers do not have access to

marketing channels and the opportunity to offer high service quality.

22. Thus, in response to the Bureau’s questions with respect to resellers, it is my expert opinion

that:

. the Canadian broadband market is functioning optimally and requires no additional regulatory interventions; . resellers have been able to deploy competitively effective services; . resellers offer competitively distinguished services that focus mainly on single-play subscribers with lower speed requirements; and . consumers have reacted accordingly to the resellers’ value propositions.

IV. INTRODUCTION

23. Broadband services allow consumers to access the Internet at “high speeds.” The CRTC

has established a universal service objective for fixed broadband service of download

speeds of at least 50 Mbps and upload speeds of at least 10 Mbps.7 This compares to the

FCC’s choice in 2018 to retain the “existing speed benchmark of 25 Mbps download/3

Mbps upload for fixed services and [to examine] the deployment of mobile services with

7 See Canadian Radio-television and Telecommunications Commission, “Communications Monitoring Report 2017,” p. 254 https://crtc.gc.ca/eng/publications/reports/PolicyMonitoring/2017/cmr2017.pdf (hereafter CRTC CMR 2017).

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minimum advertised speeds of 5 Mbps/1 Mbps, and those with a median speed of 10

Mbps/3 Mbps or higher.”8

24. The CRTC reports that 84 percent of Canadian households had access to broadband

services as defined by the Commission’s universal service object for fixed broadband

services as of December 2016. 9 As recognized by the FCC, speeds lower than these

thresholds are also valuable to the digital economy. This is also true in Canada, as noted

by the CRTC, “[T]he majority of Canadians do not subscribe to a plan meeting the

Commission’s target speeds.” 10 In fact, the most data intensive applications, such as

streaming high definition (HD) and ultra-high definition (UHD), require merely 5 Mbps

and 25 Mbps, respectively.11 Ninety-seven percent of Canadian households have access to

broadband services at 5 Mbps or higher download speeds in 2016.12 The average subscriber

consumed over 116 GB per month in 2016, which is up from 18 GB just five years earlier.13

Further, Canada had an average fixed download connection speed of 78.6 Mbps in June

2018, which places Canada among the top 20 countries in the world.14

25. Per the Notice, “Most Canadian homes are served by two networks capable of providing

broadband internet services: one owned by the local telephone company, and the other

owned by the local cable company.”15 However, Canadians can access broadband services

8 Federal Communications Commission, “2018 Broadband Deployment Report,” February 2, 2018, https://www.fcc.gov/reports-research/reports/broadband-progress-reports/2018-broadband-deployment-report. 9 See CRTC CMR 2017, p. 254. 10 Ibid. 11 See Netflix, “Internet Connection Speed Recommendations,” accessed July 17, 2018, https://help.netflix.com/en/node/306. 12 See CRTC CMR 2017, p. 67. 13 See Canadian Radio Television Telecommunications Commission, “Communications Monitoring Report 2012,” p. 147; CRTC CMR 2017, p. 254. 14 See Speedtest, “Global Index,” accessed, August 6, 2018, http://www.speedtest.net/global-index 15 Notice, ¶ 4. NERA Economic Consulting Page 14 of 62

via not only the incumbent telephone and cable networks but also via other facilities-based

providers (e.g., mobile wireless companies, other facilities-based companies, fixed

wireless companies, and satellite companies) and non-facilities-based resellers that gain

wholesale access to the incumbent telephone or cable providers’ networks via regulated

wholesale pricing and terms and conditions.

26. As of 2016, the CRTC reported that of the wireline network (i.e., telephone and cable)

connections, the incumbent telephone providers had a subscriber segment share of 38

percent, whereas the cable providers’ segment share was 49 percent. Other service

providers, consisting of resellers, fixed wireless and satellite providers, served the

remaining 13 percent of Canadian residential broadband subscribers.16

27. As shown in Table 1, resellers attracted the lowest average revenue per user (ARPU) per

month (CAD 45.59) followed by cable providers (CAD 54.83) and incumbent telephone

providers (CAD 56.08), and the other facilities-based service providers.

Table 1. Residential ARPU per Month by Type of Fixed Service Provider Type of TSP 2016 Incumbent TSPs $ 56.08 Cable-based Providers 54.83 Other Facilities-based Service Providers 66.26 Resellers 45.59 Average: $ 55.13 Source: CRTC CMR 2017, Table 5.3.7.

28. Table 1 reports simple averages. Weighting the ARPU by the number of subscribers and

reporting the alternative providers together (which is how their share is measured) produces

a different picture. Specifically, as shown in Table 2, using CRTC aggregate data reveals

16 See CRTC CMR 2017, Figure 5.3.1. NERA Economic Consulting Page 15 of 62

that on (weighted) average, Other Service Providers (which includes resellers) attracted

ARPUs comparable to those of the incumbent fixed telephone and cable providers.

Table 2: Weighted Residential ARPU per Month by Type of Fixed Service Provider Other as a Provider Type ARPU % of ARPU Incumbent TSPs $ 55.26 93 % Cable-based Providers 54.63 95 Other Service Providers 51.63 -- Average: $ 54.49 95 %

Source: CRTC CMR 2017, Tables 5.3.2., 5.3.4.

29. Understanding (although incorrectly so) that there are over 550 resellers that are allegedly

offering prices up to 30 percent less than some of their facilities-based competitors, the

Bureau seeks to understand why incumbent facilities-based telephone and cable providers

reportedly serve 87 percent of Canadian broadband residential consumers. Specifically, the

Bureau “plans to examine four broad questions.”17 The first question concerns a reseller’s

ability to deploy competitive services. The second question examines the consumer

response to these services. In its third question, the Bureau intends to study the correlation

between regulation and the “economic behavior” of ISPs. In its fourth question, the Bureau

requests information on how other countries regulate broadband services.

30. In the following sections, I address the Bureau’s request to better understand the

“competitive dynamics of Canadian Broadband markets” and then turn to the Bureau’s

quest to better understand its observations with respect to resellers, which are the subjects

of the Bureau’s first two questions. Specifically, I respond to the Bureau’s questions (a)

and (b) that concern the competitive performance of resellers. Addressing the competitive

17 Ibid., ¶ 8. NERA Economic Consulting Page 16 of 62

dynamics before turning to the Bureau’s observations is critical. If the relevant market is

competitive, then the market is performing optimally, and the observations with respect to

resellers reflects consumer value.

V. THE BUREAU MUST FOCUS ON MARKET PERFORMANCE

A. Market Failure Is a Necessary but Not Sufficient Condition for Preventing Resellers from Fulfilling Their Competitive Roles

31. A regulator’s role is to protect the public interest by ensuring competitive markets. Such

markets, in turn, offer consumers innovative and high-quality services at competitive

prices. A regulator must focus on the competitive process and be agnostic to the

competitive outcome, including who benefits from the competitive process and the

distribution of market shares. The regulatory process is not permitted to pick winners and

losers. In a competitive environment, these are selected through consumer choice.

32. Although the Bureau’s Notice is motivated by its observation with respect to resellers, its

inquiry must not become one of whether resellers should be entitled to more regulatory aid

but one that examines the competitive forces in the relevant market. If there is no evidence

of market failure, then the Bureau’s questions become moot as “the market has spoken”

and assigned the resellers a market position corresponding to their consumer value

propositions.

33. Conversely, a finding of imperfect competition does not necessarily imply that resellers

cannot thrive. This is because the CRTC’s regulatory mandate has removed entry barriers

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for Internet services resellers,18 which rendered the market fully contestable.19 This, in turn,

allows resellers to exploit profit opportunities as they perceive them through relatively

instantaneously risk-free, cost-based wholesale access.

34. Thus, to justify additional regulatory intervention that benefits resellers requires both a

showing of market failure and evidence that resellers cannot succeed under the current

regulatory regime. As the remainder of this report demonstrates, neither of these conditions

is met.

B. The Canadian Broadband Market Is Competitive

35. The Canadian broadband market and the wholesale access market are under the supervision

of the CRTC. For instance, in 2011, the CRTC established universal target speeds for retail

broadband Internet access in Canada.20 “The Commission established target speeds of 5

megabits per second (Mbps) download and 1 Mbps upload, which it expected should be

available to all Canadians, through a variety of technologies, by the end of 2015.”21 The

Commission also “determined that regulatory intervention was not appropriate at that time,

choosing instead to rely on market forces and targeted government funding for the

continued deployment of broadband Internet access services.”22

18 See, for instance, Canadian Radio-television and Telecommunications Commission, Telecom Decision CRTC99-8, “Regulation Under the Telecommunications Act of Cable Carriers’ Access Services,” July 6, 1999. 19 Contestable markets are ones where other firms are capable of entering the market; there is free entry and exit, thus “no firm is able to earn more than the normal level of profits in the long run.” (Dennis W. Carlton and Jeremy M. Perloff, Modern Industrial Organization, 4th ed. (Pearson, Addison Wesley, 2005), p. 76.) 20 See Canadian Radio-television and Telecommunications Commission, Telecom Regulatory Policy CRTC 2011-291, “Obligation to serve and other matters,” May 3, 2011, https://crtc.gc.ca/eng/archive/2011/2011-291.htm. 21 Canadian Radio-television and Telecommunications Commission, Telecom Notice of Consultation CRTC 2015-134, “Notice of hearing,” April 9, 2015, ¶ 24, https://crtc.gc.ca/eng/archive/2015/2015-134.pdf. 22 Canadian Radio-television and Telecommunications Commission, Telecom Regulatory Policy CRTC 2016-496, “Modern telecommunications services – The path forward for Canada’s digital economy,” December 21, 2016, ¶ 8, https://crtc.gc.ca/eng/archive/2016/2016-496.pdf.

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36. The Commission also “stated that it would monitor progress towards reaching these target

speeds, particularly in rural and remote areas.” 23 Consequently, in 2015, the CRTC

commenced “a proceeding to conduct a comprehensive review of its policies regarding

basic telecommunications services in Canada….”24 This review included, among other

things, what prices Canadians should be expected to pay for these services. Relevant to the

Bureau’s inquiry, Bell Canada submitted an expert report by Dr. Jeffrey Eisenach titled

“Broadband Market Performance in Canada: Implications for Policy.”25 Upon completing

his work, Dr. Eisenach concluded, “the market is characterized by vigorous, dynamic

competition, with multiple firms deploying different types of infrastructure and

technologies to produce rapidly improving levels of service.”26 Among Dr. Eisenach’s

main conclusions were the following.

. “Nearly all Canadian consumers have multiple choices of both wireline and wireless broadband services.”27 While incumbent cable (56%) and telephone companies (37%) continue to provide the majority of wireline connections, nearly half of all new connections (49%) were provided by new entrants or by incumbents operating outside their traditional service areas.28 . “By 2013, 95% of Canadian households had access to at least one broadband service offering speeds of 5 Mbps or faster, and 81% had access to at least one service offering 25 Mbps or faster.”29 . “Canadian broadband prices are stable or falling in real terms. Prices for the fastest services declined by 21% in real terms between 2012 and 2015.”30

23 Ibid., ¶ 25. 24 Ibid., ¶ 32. 25 See Eisenach Broadband Report. 26 Ibid., Executive Summary. 27 Ibid. p. 3. 28 Ibid., Figure 4. 29 Ibid., p. 3. 30 Ibid.

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. “Canada has among the highest levels of broadband penetration and usage in the world; for example, it ranks third in the world in per capita data usage, ahead of all but South Korea and the U.S.”31 . “Canada continues to rank at or near the top with respect to network investment; investment per line in 2012 was higher than the U.S. and nearly triple the level in the European Union.”32

37. In April 2016, the CRTC released a report outlining a series of initiatives to promote access

to telecommunications services specifically for unserved and underserved regions and

populations. Following multiple rounds of submissions and a hearing in April 2016, the

CRTC decided against intervening in the market on the basis that “other stakeholders are

better placed to implement solutions to address some of these [availability and

affordability] gaps….”33 Its proposed solutions included both federal funding and a reliance

on local and private actions rather than increased national regulation. “The Commission is

mindful that its regulatory frameworks should be sufficiently flexible to allow for such

solutions and does not want to take regulatory action that would inadvertently hinder the

development of further private and public sector initiatives.” 34 Thus, the Commission

determined that regulation would not be more effective in making broadband access

services available to Canadians than competition would be. The CRTC was also careful to

ensure that it “relied on market forces to the maximum extent feasible in making its

determinations in this decision,” as directed by subparagraph 1(a)(i) of the Policy

31 Ibid. 32 Ibid. 33 Canadian Radio-television and Telecommunications Commission, Telecom Regulatory Policy CRTC 2016-496, “Modern telecommunications services – The path forward for Canada’s digital economy,” December 21, 2016, ¶ 50. 34 Ibid., ¶ 203.

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Direction. 35 Thus, the most important question (whether the market for residential

broadband services is competitive) has been repeatedly addressed and is one of the CRTC’s

chief missions. Many interested parties and the Commission have repeatedly found that

market forces are the best tool for deploying a ubiquitous and highly reliable high-speed

Internet access network in Canada.36

38. The Bureau must not overlook these important findings as they provide the answers to its

questions. The rich record and literature allow the Bureau “to better understand … the

competitive dynamics of Canada’s broadband internet services industry” and demonstrates

that the market is functioning optimally.37 The same evidence also explains the outcome

observed by the Bureau with respect to resellers as a competitive market assigns market

positions to broadband providers consistent with the value they offer to consumers. If

resellers and other providers serve 13 percent of the residential broadband market, it is

because 13 percent of consumers prefer reseller services and other providers to the

incumbent facilities-based providers. It does not indicate that further regulatory

intervention is required.

35 See Order Issuing a Direction to the CRTC on Implementing the Telecommunications Policy Objectives (SOR/2006-355), Current to June 20, 2018, Published by the Minister of Justice, http://laws- lois.justice.gc.ca/eng/regulations/SOR-2006-355/. 36 Canadian Radio-television and Telecommunications Commission, Telecom Regulatory Policy CRTC 2010-632, “Wholesale high-speed access services proceeding,” August 30, 2010; Canadian Radio-television and Telecommunications Commission, Telecom Decision CRTC 2013-70, “Disposition of review and vary applications with respect to wholesale high-speed access services: Introductory statement,” February 21, 2013. 37 Notice, ¶ 1.

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VI. RESELLERS HAVE BEEN ABLE TO DEPLOY COMPETITIVELY EFFECTIVE SERVICES

39. Notwithstanding the competitive nature of the relevant market even under an (incorrect)

assumption of market failure, resellers fulfill their competitive role through their

deployment of competitive services. This is because the CRTC made the Canadian

broadband market fully contestable with a regulatory mandate that opened a wholesale

market for access to fixed telephone and cable networks, effectively removing the most

significant barriers to entry.38 Additionally, it set wholesale access prices at a measure of

cost and required no long-term commitment from resellers. Thus, resellers can access fixed

telephone and cable networks at regulated cost-based prices and, unlike facilities-based

providers, do not incur significant risks as they can discontinue access to the last-mile loop.

This enables resellers to enter the retail market anywhere they see an opportunity to make

a profit.

40. Market contestability is a critical factor in understanding the Bureau’s observations and

answering questions (a) and (b) pertaining to resellers. As shown in the following section,

resellers are in fact entering the market and pursuing profit opportunities through specific

but varying marketing strategies.

A. The Bureau Misinterpreted the Resellers Performances

41. To properly answer the Bureau’s first question, it is necessary to confirm the Bureau’s

observations with respect to the resellers’ performances. Omitting the necessary fact

38 “[T]he advent of broadband networks gives rise to the capability of carriage of voice, high speed data, broadcasting and video on common facilities. These developments in technological convergence have resulted in fundamental changes in market conditions that the Commission recognized in its conclusion in Decision 94-19 on competitive entry into the local market.” (Canadian Radio-television and Telecommunications Commission, Telecom Decision CRTC 97-8, “Decision Local Competition,” May 1, 1997, ¶ 5.) NERA Economic Consulting Page 22 of 62

checking on the alleged outcome could have severe consequences because it would yield

incorrect results and provide an incorrect picture of broadband market performance.

42. Three verifiable observations underlie the Bureau’s questions: (1) there are over 550

resellers, (2) resellers offer prices that are up to 30 percent lower than those of facilities-

based incumbent providers, and (3) the resellers have a market share of 13 percent. Fact

checking these observations reveals that the first two are factually incorrect while the third

observation relies on an incorrect market definition and is insufficient to draw any

conclusions about competition.

1. There are not 550 resellers

43. In support of its (incorrect) understanding of 550 resellers, the Bureau cites the CRTC’s

list of registered telecommunications providers. This list contains 624 “Resellers of High

Speed Retail Internet Services.” 39 Presumably, the Bureau reviewed this subset when

concluding that there are more than 550 resellers of broadband Internet services in Canada.

A closer review of these resellers indicates that many, and possibly most, do not participate

in the market subject to the Bureau’s review.

44. Per the Notice, the Bureau seems to be exclusively concerned about market performance

as it pertains to residential broadband services. However, many providers on the CRTC’s

purported reseller list are not providing this type of service. For instance, the following

resellers have nothing to do with broadband and/or residential consumers.

39 See Canadian Radio-television and Telecommunications Commission, “List of Registered Telecommunications Providers, accessed July 9, 2018 (https://applications.crtc.gc.ca/telecom/eng/registration- list?_ga=2.246123012.1841545323.152390710.

NERA Economic Consulting Page 23 of 62

. Home Phone Reconnect offers dial-up Internet service throughout Manitoba. The website states, “Your computer must be equipped with a dial up modem.”40 Dial-up service, however, is a narrowband Internet service, thus the reseller is not relevant to the present inquiry. . Hydro One Telecom is a telecommunications provider that “offers fibre-optic capacity to organizations with broadband network requirements….” 41 It does not offer residential service but is a facility provider for other providers. With the inquiry limited to residential broadband services, this reseller also does not seem relevant. . 159272 Canada Inc. appears to be a shell company with no actual services offered. . IP4B Telecom offers “IP telephony, cloud business solutions, private IP connectivity” and makes no mention of being a broadband reseller.42 . Les Services Financier Gemco Inc./Les does business as Metro Optic Inc. and provides network architecture services. MetroIX serves enterprises and institutional customers, wholesale telecommunications providers, and cloud providers.43 Again, this does not appear to be the type of reseller that the Bureau is interested in understanding.

45. Many other companies on the Bureau’s list do not compete in the residential broadband

market. Short of examining each of these companies, there does not seem to exist a

comprehensive list of resellers relevant to the Bureau’s inquiry.

46. The CRTC seems to realize that the number of resellers in Canada is not even close to 550.

Specifically, in its 2016 report, the CRTC states, “Internet services were provided by over

500 ISPs, consisting of traditional telephone and cable companies, fixed wireless service

providers, and resellers.”44 However, in its 2017 report, the CRTC eliminated the number

of ISP providers and revised the sentence to read, “Internet services were provided by a

40 Home Phone Reconnect, “Internet Services,” accessed July 12, 2018, http://www.homephonereconnect.ca/internet. 41 “About Hydro One Telecom,” accessed July 12, 2018, http://www.hydroonetelecom.com/. 42 IP4B Telecom, accessed July 12, 2018, https://ip4b.ca/en/about/why-choose-ip4p/. 43 Metroptic, accessed July 12, 2018, https://metrooptic.com/. 44 Canadian Radio-television and Telecommunications Commission, “Communications Monitoring Report 2016,” p. 246, https://crtc.gc.ca/eng/publications/reports/PolicyMonitoring/2016/cmr.htm.

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variety of ISPs, consisting of traditional telephone and cable companies, fixed wireless

service providers, and resellers.”45

47. Moreover, the CRTC maintains another list of resellers that directly contradicts the

Bureau’s understanding of more than 550 resellers. Specifically, the CRTC’s “Service

Providers Near Me” website lists 278 resellers.46 The Commission last updated the website

in 2016. Thus, many of these resellers have exited the market or have been acquired by

other resellers. In addition, I understand there are questions regarding the quality of the list.

48. A third source, the Canadian Network Operators Consortium (CNOC), which acts as the

trade association for “competitive Internet and telecommunications service providers that

own or operate telecommunications networks in regions across Canada,” lists 34

members.47

49. Interestingly, the 2015 Wall Study on which the Bureau relies in concluding that reseller

prices “can be as much as 30% lower” than incumbent broadband service providers notes,

“Resellers include Primus and TekSavvy.”48 Similarly, Nordicity states, “resellers include

Primus, Distributel, and TekSavvy.”49 Thus, neither Wall Communications nor Nordicity

used the Bureau’s list of purported resellers as they focused on only two or three resellers

in Canada. Similarly, the CRTC’s 2017 Communications Monitoring Report also makes

no mention of 550 resellers and limits its retail examples to the following companies:50

. Distributel Communications Limited; . Primus Telecommunications Canada Inc.;

45 CRTC CMR 2017, p. 254. 46 See Canadian Radio-television and Telecommunications Commission, “Service Providers Near Me,” accessed July 17, 2018, https://crtc.gc.ca/eng/comm/fourprov.htm. https://crtc.gc.ca/eng/comm/fourprov.htm. 47 CNOC, “CNOC Members,” accessed August 13, 2018, http://www.cnoc.ca/cnoc-members/. 48 Wall Study, Section 5.2, Table 10. 49 2017 Nordicity Study, p. 47. 50 See CRTC CMR 2017, pp. 255, 380. NERA Economic Consulting Page 25 of 62

. Yak Communications (Canada) Corp; and . TekSavvy Solutions Inc. 50. Distributel acquired Yak in September 2016, reducing the list to three major resellers.

Whether (as understood by the Bureau) over 550 resellers serve less than 13 percent of the

residential broadband market or whether just a small number of companies serve these

consumers makes a material difference in understanding the Bureau’s observations and

assessing the performance of the market. For instance, if hypothetically one reseller served

13 percent of the market, that tells a different story than if 550 resellers served the same

number of subscribers.

51. #

52. # there are five

major resellers in Canada.

. ACN Digital Phone Services LLC . Distributel Communications Limited . Primus Telecommunications Canada Inc. . TekSavvy Solutions Inc. . Uniserve Communications

All but Uniserve are members of CNOC.

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53. Desktop research indicates the presence of other resellers. For instance, PC Magazine

(www.pcmag.com) lists CIK Telecom among “the fastest ISPs in Canada” for 2018.51

There is limited information on the number of subscribers for CIK Telecom and other

resellers. #

# because they appear to be the only

resellers with known and significant reseller subscriber shares.52

54. However, I stress that the total number of resellers is far less meaningful than the number

of resellers in a city or, more specifically, the number of choices that consumers have when

selecting a broadband service provider. The FCC applies this method by tracking “the

percentage of ‘developed’ census blocks – blocks that contain housing units – with zero,

one, two or three more fixed broadband providers offering residential Internet access

service at different speeds….”53 Although, as explained by Dr. Crandall, the retail market

in 2018 and beyond is broader than just fixed broadband providers, the fundamental

approach of examining consumer choices at the disaggregate level is the correct one.54

2. The reseller’s alleged lower price point is unreliable

55. The Bureau’s second verifiable observation is its understanding that resellers offer prices

that are up to 30 percent lower than their facilities-based counterparts. The Bureau relied

on the 2015 Wall Study that purports to compare the prices of wireline, wireless, and

51 Eric Griffin, “The Fastest ISPs of 2018: Canada,” pcmag.com, June 19, 2018, https://www.pcmag.com/article/361838/the-fastest-isps-of-2018-canada. 52 Yak Communications (Canada) Corp was acquired by Distributel Communications Limited in 2016. 53 Federal Communications Commission, Industry Analysis and Technology Division Wireline Competition Bureau, “Internet Access Services: Status as of December 31, 2016,” February 2018, p. 6, https://docs.fcc.gov/public/attachments/DOC-349074A1.pdf. 54 Crandall Report, pp. 22-23. NERA Economic Consulting Page 27 of 62

Internet services in Canada and select foreign jurisdictions. A more recent study, conducted

by Nordicity in 2017, is available. This report concludes:

… the overall prices of Canadian Fixed Broadband Internet resellers – Primus, Distributel, and TekSavvy, were generally lower than those of the incumbent telecommunications service providers (TSPs) and cable companies: Bell Aliant and Eastlink in Halifax; Bell Canada and Videotron in Montreal; Bell Canada and Rogers in Toronto; SaskTel and Access in Regina; Telus and Shaw in Vancouver; and MTS-Bell and Shaw in Winnipeg.55

56. The 2015 Wall Study and the 2017 Nordicity Study, however, have never been subject to

any scrutiny through public consultation but are known to be deeply flawed. For instance,

with respect to mobile wireless prices, Dr. Eisenach concluded, “The Nordicity Report,

which purports to compare Canadian mobile wireless prices to those in other countries,

suffers from fundamental methodological flaws and is systematically biased.”56 In fact, in

2016, Nordicity explicitly warned readers from reaching conclusions such as those reached

by the Bureau. Specifically, the consultancy noted, “the prices cited for Canada, US or the

international jurisdictions are not meant to be statistically representative of the individual

countries as a whole.”57 Thus, although this does not rule out the possibility of one reseller’s

plan being 30 percent cheaper than an incumbent ISP’s plan, no conclusion can be drawn

with respect to the overall price offerings by the resellers.

57. More troublesome, however, is that these studies are unscientific and they should not serve

as the basis for reaching conclusions about market performance. The studies compare retail

prices charged by select incumbent ISPs in six Canadian cities to retail prices charged by

55 2017 Nordicity Study, p. 17. 56 “Expert Report of Jeffrey A. Eisenach, Ph.D. on Behalf of TELUS Communications Company,” re: CRTC 2017-259 Reconsideration of Telecom Decision 2017-56 Regarding Final Terms and Conditions for Wholesale Mobile Wireless Roaming Service, September 8, 2017, p. 5. 57 NGL Nordicity Group Ltd., “2016 Price Comparison Study of Telecommunications Services in Canada and Select Foreign Jurisdictions,” March 22, 2016, p. 12. NERA Economic Consulting Page 28 of 62

two (Wall) or three (Nordicity) reseller ISPs in the same cities. In each city and for each

ISP, the study records the price of the cheapest plan that meets or exceeds a “level.” A level

is a hypothetical consumer-demand profile. As an example, for hypothetical Level 1, the

study compares the prices of the cheapest plans for a hypothetical broadband subscriber

who wants to purchase Internet access with download speeds between 3 Mbps and 9 Mbps

and nothing more. Table 3 summarizes Wall’s and Nordicity’s artificial demand levels.

Table 3. Wall and Nordicity Demand Levels Fixed Broadband Access Nordicity Wall Communications Download Download Speed Monthly Speed Monthly Range Data Usage Range Data Usage Levels (Mbps) (GB) Levels (Mbps) (GB) 1 3 - 9 10 1 < 3 10 2 10 - 15 50 2 4 - 15 50 3 16 - 40 100 3 16 - 40 100 4 41 - 100 150 4 > 40 150 5 > 100 500 Sources: 2017 Nordicity Study and p. 43; 2015 Wall Study, p. 35.

58. Because ISPs do not necessarily have plan offerings at a certain level and/or include other

plan attributes (e.g., varying monthly data caps and upload speeds), the study simply takes

the plan that most closely meets or exceeds this artificial demand level. This approach

results in comparing plans with different download and upload speeds, different data caps,

and different quality of service experiences. Wall and Nordicity ignore these important

differences and treat these plans as though they were identical in all aspects. This apples-

to-oranges comparison is meaningless because it attributes all price differences to higher

price levels (and thus causing the reader to incorrectly conclude that there is a lack of

competition) rather than different (e.g., richer) service plans.

59. Consider for instance Nordicity’s Level 1 in the fixed broadband Internet basket that

consists of an imaginary subscriber who selects Internet access with download speeds of

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between 3 Mbps and 9 Mbps. The cheapest plan offered by TELUS in Vancouver that

meets Level 1 is CAD 65.75 and includes 15 Mbps download and upload speeds, 200 GB

monthly data, professional installation, home Wi-Fi, email accounts, and a modem.

Reseller Primus’ cheapest Level 1 plan is CAD 39.95 and includes 7 Mbps download/1

Mbps upload speeds and unlimited data. Primus also requires an installation fee of CAD

59.95 and a modem (with Wi-Fi) rental fee of CAD 7.95 per month or a modem purchase

fee of CAD 140. Despite the significantly faster plan offered by TELUS, Wall and

Nordicity would conclude that at the equivalent of CAD 50.40 per month,58 Primus is 23

percent cheaper than TELUS at CAD 65.75.

60. Nor are standalone prices for broadband internet access necessarily a realistic measure of

price differences given that bundling services often results in lower prices. As the CRTC

note in its 2017 report, the “largest entities are well positioned to offer their customers

discounts in exchange for subscribing to a range of services.”59 In its 2018 report the CRTC

reports, “Most communications subscriptions, like those for television distribution,

landline, and Internet services, tend to be purchased at a household level (and often in a

bundle), ….”60

61. Furthermore, Wall and Nordicity only compare broadband services provided through

facilities-based telephone and cable networks. As Dr. Crandall explains, in 2017, 25

percent of Canadian homes relied solely on cellular wireless for access to data over the

Internet, which is expected to increase to an estimated 30 to 40 percent by 2022. According

58 Calculated as CAD 39.95 plus CAD 7.95 plus CAD 2.50 (CAD 59.95 divided by 24 months). 59 CMR 2017, p. 45. 60 CMR 2018, p. 13.

NERA Economic Consulting Page 30 of 62

to Dr. Crandall, this “suggests that wireline and wireless broadband services are clearly

substitutes.” 61 Even assuming a sound methodology, the alleged reseller price discount is

meaningless because it fails to consider other competitive means of obtaining broadband

service (e.g., mobile and satellite broadband).

62. Thus, the Bureau’s observation regarding reseller prices is based on a study that is deeply

flawed and that does not provide accurate data for the Canadian market for fixed broadband

services. As explained above and by Nordicity’s own admission, the study is not meant to

assess market performance.

3. The 87 percent market share figure is misleading

63. The Bureau cites the CRTC CMR 2017 as the source for its understanding that “87% of

retail internet subscriptions in Canada were purchased from a traditional telephone and

cable company.” 62 This number is misleading for at least three reasons. First, the

percentage is likely dated, as the Other Service Providers share of both subscribers was

growing much more rapidly than that of Incumbent TSPs or Cable Based Carriers. Between

2012 and 2016 Other Service Provider subscribers and revenue grew at a CAGR of 13.1

percent and 23.5 percent respectively, while that of the incumbent facilities based providers

grew by 1.7 percent for subscribers and 9.3 percent for revenue.

64. Second, like the alleged 30 percent reseller discount, the 13 percent assumes that the

relevant product market in 2016 was limited to fixed telephony and cable broadband

services only. As Dr. Crandall clarifies, technological advances in recent years and

improvements in satellite and mobile wireless technologies have broadened the market to

61 Crandall Report, pp. 4-5. 62 Notice, ¶ 6.

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also include satellite and 4G LTE services.63 Moreover, the advent of 5G services, which

offer significantly greater speeds, further supports a finding of a broader market definition.

Taking a long-term view in the Bureau’s inquiry is particularly important because any

regulatory policy recommendation would be likely implemented around the time of the

initial commercial roll-out 5G networks in Canada.64

65. Third, the 13 percent assumes that resellers (and other service providers) target the same

population as the facilities-based competitors. However, resellers often do not vie for the

same subscribers that their competitors do. For instance, although Distributel and some

other resellers offer triple-play bundles, many others choose not offer bundles that contain

video (TV) programming in addition to voice services and broadband Internet access. As

shown in Table 4, based on U.S. data, approximately 40 percent of U.S. cable broadband

subscribers purchase their subscriptions as part of a triple-play bundle. Using this as a

proxy for Canadian broadband subscribers,65 this would imply that apart from the likes of

Distributel, resellers limit their potential subscriber base to at best approximately 60

percent of the overall market (consisting of consumers who want only internet access or

internet access bundled with a telephone line (VoIP)). This is a conservative estimate as it

assumes that none of the double-play subscribers takes a broadband and video combination.

Aggregating double- and triple-play would reduce the subscribers that resellers elect to

serve to about 25 to 28 percent of all fixed broadband subscribers.

63 Crandall Report, pp. 4, 22-23. 64 See, for example, Consultation on Revisions to the 3500 MHz Band to Accommodate Flexible Use and Preliminary Consultation on Changes to the 3800 MHz Band (SLPB-004-18), Comments of Ericsson Canada Inc., July 12, 2018, pp. 7-9. 65 According to the CRTC, there were 9.6 million subscriptions with bundled services in Canada in 2016. (CRTC, CMR, 2017, Table 2.0.2.) NERA Economic Consulting Page 32 of 62

Table 4. US Broadband Cable Subscribers by Type of Purchase

Type of Purchase Units Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Standalone HSD 000s 12,905 13,304 13,829 14,289 15,007 Double-play 000s 16,594 16,511 16,464 16,555 16,645 Triple-play 000s 21,245 21,295 21,265 21,327 21,240 Total Subscribers: 000s 50,744 51,110 51,558 52,171 52,892

% Available to Resellers: Standalone HSD Only % 25.4 26.0 26.8 27.4 28.4 Standalone HSD & Double-play % 58.1 58.3 58.8 59.1 59.8

Notes: Calculated as the sum of Standalone High Speed Data (HSD) or Standalone HSD and Double Play divided by Total Subscribers. Source: Tony Lenoir, "Triple-play cable subs drop again in Q1," S&P Global, May 23, 2018

66. This, in turn, implies that although resellers might serve approximately 13 percent of all

fixed telephony and cable subscribers they serve about 22 percent (13% / 59.8%) of those

subscribers who do not wish to purchase triple-play bundles or 46 percent (13% / 28.4%)

of those who wish to purchase broadband as a standalone service. Similarly, as explained

in detail below, many resellers focus their broadband plans on relatively low download and

upload speeds, further decreasing the number of subscribers that resellers attempt to serve.

This is largely a strategic choice because through wholesale access resellers can offer plans

at the comparable speeds as their host networks.

67. The specific and narrow focus of resellers renders the 87 percent fixed telephone and cable

market-segment share of residential Internet service subscribers misleading. There is clear

evidence that resellers can serve the entire market segment but elect not to do so. Among

the subscribers that resellers elect to serve, their share is far higher than the reported 13

percent of the broadband market.

B. Canadian Resellers Have Been Able to Succeed

68. Notwithstanding the Bureau’s misinterpretation of the reseller performance data, if the

Bureau wishes to understand the competitive effect of resellers, it must be careful in

drawing conclusions about the competitive dynamics in the retail market based on the NERA Economic Consulting Page 33 of 62

performance of this one type of ISP. If the market is already competitive (which it is), then

reseller performance, positive or negative, simply represents consumer value and is not

relevant for policymaking. Even if one considers the market non-competitive, the success,

or lack thereof, of resellers is only relevant if the cause is the alleged non-competitiveness.

As explained above, resellers can succeed even in the presence of facilities-based providers

due to the market’s regulated contestability. Putting aside that service-based competition

is inherently less effective, I examine the resellers’ market performance and offerings

relative to their incumbent facilities-based peers in the following.

1. Other service providers represent the fastest growing type of ISP

69. As reported by the CRTC, other service providers (which includes resellers) is the fastest

growing type of service provider both in terms of annual growth rate and the 2012–2016

compound annual growth rate (CAGR). Although it is unclear to what extent resellers are

responsible for this growth, the increasing (rather than stagnant) trend of other service

providers confirms that consumers are aware of resellers and that they increasingly

substitute them for facilities-based ISPs.

70. Furthermore, with a 7 percent growth rate between 2015 and 2016 for Other Service

Providers, 66 the combined incumbent telephone and cable market share is forecast to drop

another percentage point (down to 86 percent) by year-end 2018. At a CAGR of 13.1

percent, 67 resellers and other service providers are forecast to increase from the current 13

percent to 18.4 percent by 2020. It is important that the Bureau does not take a static view

66 CRTC, CMR, 2017, p. 257, Table 5.3.4. 67 Ibid. NERA Economic Consulting Page 34 of 62

with respect to reseller performance but factors into its analysis the strong growth of the

same.

2. A 13 percent market share is evidence of market success

71. Market share numbers do not indicate whether resellers have been able to deploy

competitively effective service offerings. However, the challenge of ensuring the

competitiveness of retail markets through wholesale access is not new. For instance, the

U.S. Congress dealt with this issue in determining when the Bell Operating Companies

would be allowed to provide long distance service outside of their own serving areas:

In section 271 [of the US Telecommunications Act of 1996], Congress developed an incentive structure whereby incumbent Bell Operating Companies (BOCs) are rewarded with entry into long distance markets in their territory if they can demonstrate to the Federal Communications Commission (FCC) that they have opened their local wireline market to competition.68

72. Like the FCC’s efforts in ensuring competition in the retail market for fixed-line telephone

service in the late 1990s, the Bureau’s inquiry intends to understand whether resellers are

sufficiently established in Canadian broadband market. The strong parallel in regulatory

objectives with the Bureau’s inquiry allows us to examine this type of metric, market shares

in particular, that the FCC used to allow the Bell Operating Companies (BOCs) to provide

long distance services outside their local areas.

73. To be permitted to offer long distance service, a BOC had to convince the FCC that

resellers deployed effectively competitive services. Relevant to the Bureau’s inquiry, the

FCC decided not to impose a market share threshold beyond which it considered necessary

68 Daniel R. Shiman and Jessica Rosenworcel, “Assessing the Effectiveness of Section 271 Five Years After the Telecommunications Act of 1996,” October 2001, p. 1, https://arxiv.org/ftp/cs/papers/0109/0109095.pdf. The authors were employed by the FCC when this paper was published but clarify that it represents the opinions of the authors alone not the FCC or its Commissioners. NERA Economic Consulting Page 35 of 62

for the wholesale market to work properly and did not expect or require competitive entry

if the BOCs were able to demonstrate that they offered access to their respective networks.

The FCC required only that the local market be open to competition, it did not require

“ubiquitous and pervasive competitive entry.”69

74. The FCC closely monitored the performance of the local fixed-line telephone market,

paying attention to the percentage of total lines sold by resellers, that is, competitive local

exchange carriers (CLECs). Although regulated wholesale access to fixed-line telephone

networks in the United States is limited to voice services only, the success of these

“reseller” services as measured by their market shares is informative to the Bureau inquiry.

The CLECs’ total market share peaked in June 2004, reaching 13.5 percent and puts the

CRTC’s reported 13 percent market share for Other Service Providers into perspective.

75. The CLEC market share trajectory provides a valuable benchmark in the Bureau’s inquiry.

It demonstrates that non-facilities-based local voice service competitors in the United

States achieved, but never materially exceeded, the market share of non-facilities based

broadband competitors in Canada. In fact, as illustrated in Figure 1, the incumbent

telephone and cable broadband providers lost market share following the opening of the

wholesale access market in Canada at about the same rate as incumbent local voice

providers did after the opening of the wholesale access market in the United States.

69 Shiman and Rosenworcel, p. 17. NERA Economic Consulting Page 36 of 62

Figure 1. Market Share of Non-Facilities-Based Providers After Wholesale Access Was Allowed (2003-2016)

18.0

16.0

14.0

12.0

10.0

8.0 Market Share (%)

6.0

4.0

2.0

0.0 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 (US) UNEs and Resold Lines as a % of Total Lines (Canada) Non-Incumbent TSP and Non-Cable Providers as a % of Total Residential Internet Subscribers Sources: FCC, Local Telephone Competition Reports, Dec 1997–Dec 2013; CRTC, CMR, 2003–2017. Note: Slight discrepancies exist between the CMR reports; numbers used are from the most recent report for which data is available for a given year.

76. Furthermore, as summarized in Table 5, in several states where the FCC granted a BOC

access to long distance markets, the BOC’s shares were far above those of the incumbent

telephone and cable broadband providers in Canada.

NERA Economic Consulting Page 37 of 62

Table 5. Incumbent Shares as of 271 Application Filings

Incumbent State BOC Filing Date Share New York Bell Atlantic 9/29/1999 80% Texas SBC 4/5/2000 88% Kansas SBC 10/26/2000 87% Oklahoma SBC 10/26/2000 94% Massachusetts Verizon 1/16/2001 89% Connecticut Verizon 4/23/2001 94% Pennsylvania Verizon 6/21/2001 90% Sources: Filing Date: Shiman and Rosenworcel, Table 1; Incumbent Shares: FCC, Industry Analysis Division Common Carrier Bureau, “Local Telephone Competition Status as of December 31, 2000,” May 2001, Table 6.

With each approval, the FCC confirmed that the relevant wholesale market was functioning

properly and consequently the retail market was sufficiently competitive.

77. There are three lessons that can be learned from the U.S. experience. First, the FCC

specifically refrained from using only a market share test in examining whether the

wholesale market worked optimally. Second, “resellers” in the United States achieved

similar, if not lower, market shares as Canadian broadband resellers, thus demonstrating

that the latter have been able to deploy competitively effective service offerings. Third, the

FCC concluded that incumbent market shares (which were far above those observed in

Canada) were sufficient to declare the market as working optimally as part of a three-prong

test.

C. Plan Choices Underscore the Robustness of the Broadband Market

78. Finally, in addition to the resellers’ success, a detailed examination of broadband service

offerings demonstrates that both facilities-based and non-facilities-based providers pursue

different service and pricing strategies. As found by Verizon and acknowledged by the

FCC, “to the extent that providers offer different types of data plans or pricing offerings,

NERA Economic Consulting Page 38 of 62

this range of choices for consumers ‘underscores how robust broadband deployment has

been.’”70

1. Resellers pursue different marketing strategies

79. Whether it is a facilities-based provider or a reseller, each broadband provider pursues a

different marketing strategy and targets different geographic areas and customer groups.

Bell and its subsidiaries appear to offer the broadest coverage among facilities-based

providers, covering all provinces except British Columbia, Alberta, and Saskatchewan.

Among the resellers, Primus appears to be the most widely available covering all provinces

except Quebec, Northwest Territories, and Nunavut. Provinces with the most choices of

broadband providers include Ontario, British Columbia, and Alberta. Uniserve, on the

other hand, has been focused on British Columbia, as it is “transitioning from a local West

Coast ISP to a Canadian unified communications company.”71

80. In addition to geographic distinguishers, alternative broadband providers focus on specific

aspects of the broadband market. For instance, TekSavvy focuses predominately on

consumers who are “Frustrated with the Big Guys”:

At TekSavvy, you don’t get just an Internet Service Provider (ISP); you get an Internet Service Provider (ISP) that cares. We know you need choice, you need an alternative to the big guys, and you need to know at the end of the day we’ll take care of you no matter what. We are committed to giving our customers the best internet service and the best phone service possible. In fact, we pride ourselves on that: on being able to give you more than you thought possible, all for a fair price, with great service, and with no long- term commitments and no hidden fees.72

70 Federal Communications Commission, Inquiry Concerning Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, FCC 18-10, 2018 Broadband Deployment Report, GN Docket No. 17-199, rel. Feb. 2, 2018, ¶ 39, https://docs.fcc.gov/public/attachments/FCC-18- 10A1.pdf. 71 Provider websites, accessed July 20, 2018; Uniserve Communications Corporation, “Management’s Discussion and Analysis, “May 31, 2017, p. 1. 72 TekSavvy, “Internet Residential,” https://www.teksavvy.com/. NERA Economic Consulting Page 39 of 62

Thus, TekSavvy provides a competitive alternative for subscribers dissatisfied with

facilities-based providers with respect to price, customer service, term contracts and other

fees.

81. In contrast, Distributel markets itself like a facilities-based provider, stressing its broad

service offerings, decades-long experience, and own network facilities. The reseller states:

Distributel is one of the pioneers of the independent service provider industry in Canada. Distributel has evolved from being founded as a long distance provider to become a growing, national, full service telecommunications provider.73

82. Primus also portrays itself like a facilities-based provider:

Over 20 years ago, Primus began as a trusted partner Canadians could turn to for competitive long-distance plans. We have evolved into a trusted national communications provider and today offer a smarter connectivity choice for Canadian consumers, businesses and wholesale customers.74

83. Yet, other resellers focus on specific consumer groups. For instance, reseller CIK Telecom

targets Canadian ethnic communities, specializing in multilingual customer service

representatives.75

84. The wide variety of the market provides first-hand proof that resellers have been able to

deploy competitively effective services. The present regulatory regime removes all

network-related barriers to entry and allows resellers to pursue a broad range of marketing

strategies.

73 Distributel, “Who we are,” accessed July 17, 2018, https://www.distributel.ca/about-distributel/who-we- are/. 74 Primus, “Corporate Overview,” accessed July 17, 2018, https://primus.ca/index.php/bc_en/aboutus/corporate-overview/. 75 CIK Telecom, “About Us,” accessed July 17, 2018, https://www.ciktel.com/AboutUs/Index. NERA Economic Consulting Page 40 of 62

2. Resellers offer different plan choices

85. In addition to targeting different customer groups, resellers also distinguish themselves by

offering different plan choices than their competitors. Interestingly, despite generally

having access to comparable download and upload rates as their host networks, resellers

elect to offer their subscribers lower speeds. For example, in Ontario, and Quebec, where

resellers have access to all host network technologies, resellers, such as ACN and Primus

offer slower download speeds than Bell.76 In fact, TELUS’ wholesale access data reveal

that customers of resellers typically purchase slower download speeds than TELUS’ retail

customers. #

. # Although the

resellers’ apparent market segmentation provides Canadian consumers with even more

choice, their plans will not appeal to subscribers seeking higher download speeds, thereby

further curtailing the market segment addressed by resellers.

3. Resellers pursue different pricing strategies

86. As one would expect in a competitive retail market, resellers also offer different pricing

strategies. For instance, most resellers frequently require customers to purchase or rent a

modem, whereas facilities-based providers often include the network equipment in the

monthly price. Most resellers also charge for installation whereas facilities-based providers

76 Sources: Provider websites, accessed July 19, 2018. NERA Economic Consulting Page 41 of 62

often do not. Consequently, as one would expect, sometimes resellers offer less expensive

prices and sometimes they are more expensive, even abstracting from bundling discounts.

In most cases, price perception depends on the value that the consumer places on the plan

differences. For example, consider a 50 Mbps upload/10 Mbps download plan with

unlimited usage and a 24-month contract in Quebec. As summarized in Table 6, Bell offers

this plan at an effective monthly price of CAD 76.45, whereas Primus (a reseller) offers

the same plan at an effective price of CAD 66.40, a 13 percent difference.

Table 6. The Reseller Is Less Expensive (Example 1) Effective Monthly Equipment Activation Monthly Monthly Provider Charge Fee Fee Activation 1 Price 2

Bell $ 73.95 $ 0.00 $ 59.95 $ 2.50 $ 76.45 Primus 56.95 6.95 59.95 2.50 66.40 Sources: Provider websites, accessed July 19, 2018. Notes: 1 Calculated by dividing Activation Cost by Contract Term (24 months), 2 Calculated by summing Monthly Charge, Equipment Fee, and Monthly Activation Fee.

87. Conversely, as shown in Table 7, a consumer in Quebec wishing to purchase broadband

service at 60 Mbps upload/10 Mbps download also with unlimited usage pays CAD 62.95

to Videotron and CAD 72.99 to reseller ACN, a 14 percent difference. Additionally, ACN

requires a 12-month term contract and Videotron does not require a contract. In this

example, the reseller offers less at a higher price than the facilities-based provider does.

Table 7. Facilities-based Provider Is Less Expensive (Example 2) Effective Term Provider Monthly Price Data (Months)

Videotron $62.95 Unlimited 0 ACN $72.99 Unlimited 12

Note: Equipment and Activation Fees are $0.00 for these two plans. Sources: Provider websites, accessed July 19, 2018.

NERA Economic Consulting Page 42 of 62

88. Finally, most of the time, facilities-based providers and resellers offer different services.

For these plans, a simple price comparison cannot be done as the price perception depends

on the value the consumer assigns to the difference in plan attributes. In Table 8, I present

the plans available to a consumer in British Columbia who wishes to purchase a broadband

plan with a download speed of 150 Mbps. This consumer has a choice of at least seven

broadband providers: TELUS, Shaw, Eastlink, ACN, Distributel, TekSavvy, and Uniserve.

Table 8. Facilities-based Provider and Reseller Offer Different Plans (Example 3) Effective Download Upload Monthly Term Speed Speed Provider Price Data (GB) (Months) (Mbps) (Mbps) Additional Perks

Incumbents TELUS $ 81.25 Unlimited 24 150 150 $200 Visa Gift Card; $100 Bill Credit TELUS 90.00 Unlimited 24 150 150 TELUS 74.38 Unlimited 0 150 150 $100 Bill Credit Shaw 103.13 1,000 0 150 15 $75 Online Credit Shaw 83.75 Unlimited 24 150 15 $75 Online Credit Eastlink 88.20 1,000 24 150 10 Modem at No Extra Charge

Resellers ACN 84.99 Unlimited 24 150 15 TekSavvy 69.95 Unlimited 0 150 15 Distributel1 97.92 Unlimited 0 150 15 Uniserve2 72.96 Unlimited 0 150 15 Sources: Provider websites, accessed July 19, 2018. Notes: Equipment Fees are $0.00. 1 Distributel’s plan has a monthly price of $90.00 with a $190.00 activation fee depreciated over 24 months. 2 Uniserve’s promotion plan has an average monthly price of $71.09 with a $44.95 activation fee depreciated over 24 months.

89. For instance, whether CAD 81.25 for TELUS’ first plan is cheaper than TekSavvy’s CAD

69.95 plan depends on how the consumer values the plans’ differences, that is, term

contract (24 months vs. zero months), download speeds (150 Mbps vs. 15 Mbps), and

additional perks (CAD 200 gift card or CAD 100 bill credit vs. no perks). There is no

simple answer to this because it represents each company’s best strategy to maximize its

respective competitive position. Alternatively, whether Distributel’s CAD 97.92 plan

(without a term) is more expensive than Shaw’s CAD 83.75 plan (with a term and offset

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by the CAD 75.00 online credit) depends on how the consumer values a plan without term

obligations.

90. This diversity in plan offerings is a testament to a robust market, which proves not only

that resellers are capable of operating like facilities-based providers but also that they are

not always less expensive and in most instances simply provide a different plan. These are

all signs of well-working wholesale and retail markets.

VII. CONSUMERS HAVE REACTED POSITIVELY TO RESELLER OFFERINGS

A. Canadian Consumers Are Aware of Resellers

91. Correcting for consumer awareness of competitor offerings is typically not in the realm of

regulatory intervention as awareness is built through reputation and marketing efforts. In

addition, several of the alternative providers have been active in telecommunications for

many years. Distributel has “almost 30 years of experience providing telecommunications

services to Canadian” and TekSavvy was founded in 1998.77 Unless there is a reason to

believe that resellers do not have access to marketing channels and the opportunity to offer

high service quality, regulatory intervention is not appropriate.

92. Even though resellers elect to serve only selected households, they have been able to

acquire a substantial market share and are the fastest growing type of provider, which is

strong evidence that Canadian consumers are fully aware of resellers. Additionally, there

is ample anecdotal evidence of market awareness. For instance, resellers TekSavvy and

CIK Telecom received press coverage for their high broadband speeds. Speedtest, a

77 About Distributel, accessed August 13, 2018, https://www.distributel.ca/about-distributel/who-we-are/; TekSavvy Solutions, “TekSavvy makes PROFIT 200 Fastest-Growing Companies ranking for third year in a row,” June 1, 2011. NERA Economic Consulting Page 44 of 62

segment of Ookla, a company specializing in measuring Internet speeds, ranked Canadian

ISPs by their broadband download and upload speeds. Speedtest ranked the following ISPs

as the fastest providers in Canada: Rogers, Shaw, Bell Canada, TELUS, Videotron, Cogeco

and TekSavvy.78 The 2016 version of this ranking was picked up by Forbes magazine,

giving TekSavvy press coverage as one of the fastest ISPs in Canada.79 PC Magazine, a

reputable magazine covering computer products and services, also ranks Canada’s fastest

ISPs. Its 2017 edition covered TekSavvy and CIK Telecom, two resellers, in conjunction

with incumbents such as Rogers, Bell Canada, Eastlink, Shaw, Cogeco, Videotron, and

TELUS.80 As Figure 2 for Distributel shows, resellers also advertise widely. Furthermore,

Montreal’s Société de transport de Montréal (STM) rolled out the city’s Wi-Fi equipped

bus in partnership with Distributel in 2014.81

78 See Speedtest, “Reports>Canada Fixed,” November 15, 2017, http://www.speedtest.net/reports/ canada/#fixed. 79 See Kevin Murnane, “Speedtest Ranks The Fastest Fixed Broadband And Mobile Internet Service Providers In Canada”, Forbes, August 25, 2016, https://www.forbes.com/sites/kevinmurnane/2016/08/25/speedtest- ranks-the-fastest-fixed-broadband-and-mobile-internet-service-providers-in-canada/#720694fa7fb2. 80 See Eric Griffith, “The Fastest ISPs of 2017: Canada,” PC Magazine, June 9, 2017, https://www.pcmag.com/article/353971/the-fastest-isps-of-2017-canada. 81 See Amanda Kelly, “Montreal Rolls Out its First Wi-Fi-Equipped City Bus,” Global News, May 9, 2014, https://globalnews.ca/news/1322207/montreal-rolls-out-its-first-wifi-equipped-city-bus/. See also VMedia at https://i.ytimg.com/vi/-dhPKvXpN2c/maxresdefault.jpg and TekSavy at https://milestoneintegrated.com/wp- content/uploads/2017/09/TekSavvy_CaseStudy4-1-1920x1100.jpg. NERA Economic Consulting Page 45 of 62

Figure 2. Advertising Example – Distributel

93. The reseller Uniserve launched its branding and awareness campaign through Canada’s

Business News Network (BNN), BTV-Business Television, and CEO Clips. Uniserve’s

website states:

BTV and CEO Clips profiles innovative publicly traded companies in North America and will feature 15 to 30 second spots of Uniserve to be broadcast on BNN beginning March 12- 18, 2018 … The commercials will run 20 x ROS (Run of Schedule) Mon-Fri during market hours plus bonus plays in off prime time. In tandem weeks BTV will have corner stock ticker ads of Uniserve with the Stock ticker and logo.82

94. Based on the resellers’ often long-term presence and marketing activities, Canadian

consumers must be fully aware of their options for broadband services. Moreover, there is

no reason to believe that consumer inertia harms or benefits resellers any more than it does

facilities-based providers. In fact, with consumers switching relatively freely, consumer

82 “Uniserve Begins Investor Awareness Campaign, Campaign to begin on BNN with BTV,” Uniserve Press Release, March 12, 2018, https://smallbusiness.uniserve.com/news/press-releases/uniserve-begins-investor- awareness-campaign/.

NERA Economic Consulting Page 46 of 62

inertia appears low. For residential high-speed Internet access service subscriptions, the

industry churn rates (a measure of subscriber turnover) was 1.80 percent of subscriptions

per month in 2015 and 1.74 percent of subscriptions per month in 2016 for the larger ISPs.83

Thus, in 2016, these ISPs had to replace almost 21 percent of their subscriptions to remain

at the size they were starting the year.

B. The Resellers’ Limited Service Offerings Limit Their Attractiveness

95. As summarized in Table 3 using the US experience as a proxy for Canada, the fact that

many resellers do not provide television service as part of their bundled offerings reduces

their potential subscriber base by approximately 40 percent. It is noteworthy though that

some resellers, including Distributel, do offer television services and thus are able to

address the entire broadband market.

96. Further, as explained above, resellers further limit the households they serve by electing to

serve only certain areas and by offering generally lower speed packages. Thus, the

households served by resellers consists of Canadians seeking a single-play or perhaps a

double-play bundle that has lower download speeds and who live in an area in which the

reseller has elected to enter. Although no statistics exist as to how much this further reduces

the potential subscriber base for resellers, it likely reduces it to significantly below 50

percent of the retail market based on similar data collected in the United States.

83 According to the CRTC, the larger ISPs “make up approximately 90% of total residential high-speed subscriptions.” (CMR 2017, p. 254.) NERA Economic Consulting Page 47 of 62

C. Industry Contractual Practices Do Not Prevent Reseller Success

97. There is no evidence that industry contractual practices impact resellers any differently

than facilities-based providers. Both types of broadband providers appear to follow similar

strategies, offering a mix of no-term and term plans (typically 24 months but at times 12

months). In exchange, the subscriber enjoys a lower monthly service charge or other

incentives such as free hardware, free installation, gift cards, etc. Although this prevents

subscribers from switching without paying an early termination fee, they have a choice of

purchasing a non-term plan. By electing a term contract, subscribers reveal their preference

to remain with a provider for the duration of the term contract in exchange for a lower

monthly recurring charge or other incentive.

VIII. CONCLUSION AND SUMMARY RESPONSES

98. Considering the findings above, it is my expert opinion that the wholesale market for

broadband access in Canada is functioning efficiently. Similarly, the retail market is

competitive and resellers thrive under the existing wholesale access regime. With respect

to the Bureau’s questions (a) and (b), I find the following:

. Question (a.i.): What competitive influence have resellers had, to date, on traditional

phone and cable network owners?

Response: Although the commercial success of a market participant should not be of

concern to the Bureau, resellers compete for subscribers they elect to serve. This provides

Canadian consumers with additional service choices and potentially different price options.

In market segments not addressed by resellers, the providers offer the threat of their entry

due to the absence of entry barriers (i.e., full contestability).

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. Question (a.ii.): Are there differences between the services offered by traditional phone

and cable network owners and those provided by resellers that could explain the observed

consumption patterns?

Response: Yes, resellers elect to serve limited geographic regions and selected customer

groups. Resellers generally do not offer video services, which prevents them from offering

triple-play bundles. Further, with generally lower download speeds, they target consumers

with relatively modest data consumption needs. The resellers’ plan structures are also

different and typically require the purchase or rental of a modem. Finally, although

facilities-based providers generally use brick-and-mortar stores in addition to online

distribution channels, resellers typically sell their services online only.

. Question (a.ii.): What are the value points that matter most to consumers?

Response: This depends on the type of consumer. However, download speeds, upload

speeds, price, service quality, and the ability to bundle services are all elements of the

consumer purchase decision.

. Question (b.i.): How aware are Canadian consumers of their options for broadband

services?

Response: There is no evidence that resellers do not have adequate access to marketing

channels. Furthermore, given the resellers’ general marketing activities and the fact that

their market share is growing indicates that consumers are fully aware of their options for

broadband services.

. Question (b.i.): Are there factors that may drive consumer inertia in this industry and, if

so, are there ways to overcome these factors?

NERA Economic Consulting Page 49 of 62

Response: There is no evidence of consumer inertia for resellers and incumbent being

different. Moreover, with consumers switching relatively freely, consumer inertia appears

low. For residential high-speed Internet access service subscriptions, the industry churn

rates (a measure of subscriber turnover) was 1.80 percent of subscriptions per month in

2015 and 1.74 percent of subscriptions per month in 2016 for the larger ISPs.84 Thus, in

2016, these ISPs had to replace almost 21 percent of their subscriptions to remain at the

size they were starting the year.

. Question (b.ii.): How does the fact that resellers do not typically provide other

telecommunications services (e.g., television or phone service) affect the competitive

attractiveness of resellers?

Response: It reduces the potential subscriber base resellers elect to serve and renders

market shares misleading. The lack of television service means that consumers seeking to

purchase a triple-play bundle have a very limited selection of resellers to choose from.

Relatedly, although most resellers offer phone service, it is unclear how many subscribers

purchase double play from resellers.

. Question (b.iii.): How do industry contractual practices affect consumer behavior?

Response: Because both facilities-based providers and resellers employ similar contractual

practices, it affects consumer behavior for both types of services identically. Contractual

practices, term contracts in particular, benefit consumers because they provide them with

a discount in exchange for a commitment period.

. Question (b.iii.): How are contract lengths and bundling discounts structured?

84 According to the CRTC, the larger ISPs “make up approximately 90% of total residential high-speed subscriptions.” (CMR 2017, p. 254.) NERA Economic Consulting Page 50 of 62

Response: This depends on the provider. Typical contract lengths are 24 months with some

contract extending only 12 months. Plans are often also available with no term contract.

There is no common industry-wide structure for bundling discounts.

. Question (b.iii.): How aware are consumers of their contractual obligations and rights?

Response: Contracts may require a consumer signature and term contracts often require

additional consumer acknowledgment. As such, consumers should be fully aware of their

contractual obligations and rights. More generally, consumers would be aware of having

rights in a similar industry, with a number of the same participants, namely mobile wireless,

following the widely publicized introduction of the Wireless Code.

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APPENDIX A: CURRICULUM VITAE OF CHRISTIAN M. DIPPON, PH.D.

Christian M. Dippon, Ph.D.

CHAIR, NERA’S GLOBAL ENERGY, ENVIRONMENT, COMMUNICATIONS & INFRASTRUCTURE PRACTICE

Dr. Dippon is a Managing Director at NERA and a leading authority in complex litigation disputes and regulatory matters in the communications, Internet, and high-tech sectors. He is also the Chair of NERA’s Global Energy, Environment, Communications & Infrastructure (EECI) Practice where he leads over 100 experts in the areas of energy, communications, media, Internet, environment, auctions, transport, and water.

Dr. Dippon advises his clients in economic damages assessments, class certifications and damages, false advertising, antitrust matters, and regulatory and competition issues. He has extensive testimonial and litigation experience, including depositions, jury and bench trials in state and federal courts, domestic and international arbitrations, and submissions before international courts. Dr. Dippon also routinely testifies before regulatory authorities, including the Federal Communications Commission, the International Trade Commission, numerous state commissions, and international agencies.

With 22 years of experience, Dr. Dippon’s expertise spans the globe, having consulted with clients in over two dozen countries. He assists clients with a broad range of litigation disputes related to wireline, wireless, cable, media, Internet, and the high-tech sectors.

Dr. Dippon has authored and edited several books as well as book chapters in anthologies and has written numerous articles on telecommunications competition and strategies. He also frequently lectures in these areas at industry conferences, continuing education programs for lawyers, and at universities. National and international newspapers and magazines, including the Financial Times, Business Week, Forbes, the Chicago Tribune, and the Sydney Morning Herald have cited his work.

Dr. Dippon serves on NERA’s Board of Directors, the Board of Directors of the International Telecommunications Society (ITS), and on the Editorial Board of Telecommunications Policy. He is a member of the Economic Club of Washington, DC, the American Economic Association (AEA), the American Bar Association (ABA), and the Federal Communications Bar Association (FCBA).

Dr. Dippon is bilingual in English and German and proficient in French and Thai. Prior to joining NERA, Dr. Dippon was an analyst at BMW in Bangkok, Thailand.

NERA Economic Consulting Page 52 of 62

EDUCATION

Curtin University, Perth, Australia Ph.D. in Economics, 2011

University of California, Santa Barbara, CA, USA M.A. in Economics, 1995

California State University, Hayward, CA, USA B.S. cum laude in Business Administration, 1993

THESIS

“Consumer Preferences for Mobile Phone Service in the U.S.: An Application of Efficient Design on Conjoint Analysis,” Curtin University, 2011.

PROFESSIONAL EXPERIENCE

NERA Economic Consulting

2017–present Chair, NERA’s Global Energy, Environment, Communications & Infrastructure (EECI) Practice 2017–present Member, Board of Directors, NERA Economic Consulting 2014–present Senior Vice President / Managing Director 2014–2017 Co-Chair, Communications, Media & Internet Practice 2015–2017 Head, NERA Washington, DC 2014–2015 Co-Head, NERA Washington, DC 2012–2014 Chair, Communications, Media & Internet Practice 2004–2014 Vice President 2000–2004 Senior Consultant 1998–2000 Consultant 1997–1998 Senior Analyst 1996–1997 Analyst

BMW Thailand

1993–1994 Business Analyst

NERA Economic Consulting Page 53 of 62

HONORS AND PROFESSIONAL ACTIVITIES

Member, The Economic Club, Washington, DC Editorial Board, Telecommunications Policy Board of Directors, International Telecommunications Society (ITS) Assistant Treasurer, International Telecommunications Society (ITS) Member, American Economic Association (AEA) Member, Federal Communications Bar Association (FCBA) Associate, American Bar Association (ABA)

TESTIMONY IN REGULATORY AND JUDICIAL PROCEEDINGS (2010–PRESENT)

ON BEHALF OF ALCATEL-LUCENT USA INC. In the Superior Court of California, County of Santa Clara, In re: Alcatel-Lucent USA Inc. v. Brilliant Telecommunications, Inc., Juniper Networks, Inc., et al., December 7, 2012, December 13, 2012, February 21 and 25, 2013. (Economic damages)

ON BEHALF OF BELL MOBILITY Before the Superior Court, Province of Quebec, District of Montreal, In the Matter of Gagnon vs. Bell Mobility, No: 500-06-000496-105, October 25, 2013, March 14, 2014 (updated version from October 25, 2013, and April 2–3, 2014. (Economic damages)

ON BEHALF OF CALINNOVATES Before the Federal Communications Commission, Washington, DC, In the Matter of Expanding Consumers’ Video Navigation Choices, MB Docket No. 16-42, Commercial Availability of Navigation Devices, CS Docket No. 97-80, April 22, 2016 (Public policy), October 11, 2016. (Economic damages)

Before the Federal Communications Commission, Washington, DC, In the Matter of Protecting and Promoting the Open Internet, GN Docket 14-28, “Economic Repercussions of Applying Title II to Internet Services,” White Paper, by Christian Dippon, PhD and Jonathan Falk, filed as attachment to the Reply Comments of CALinnovates, September 11, 2014. (Public policy)

ON BEHALF OF CELLCOM ISRAEL, LTD. Before the Israel Ministry of Communications, Expert Report of NERA Economic Consulting, “Reply to Frontier’s Responses, Estimating the Cost of Wholesale Access Service on Bezeq’s Network,” Christian Dippon with Marta Petrucci, Leen Dickx, and Howard Cobb (Finite State Systems), September 29, 2014. (Regulatory policy and cost modeling)

NERA Economic Consulting Page 54 of 62

Before the Israel Ministry of Communications, Expert Report of NERA Economic Consulting, “Estimating the Cost of Wholesale Access Services on Bezeq’s Network, A Cost Modeling Review,” Christian Dippon with Nigel Attenborough, Marta Petrucci, Sally Tam, Anthony Schmitz, and Howard Cobb, March 10, 2014. (Regulatory policy and cost modeling)

ON BEHALF OF COMCAST CORPORATION Before the Federal Communications Commission, Washington, DC, In the Matter of Restoring Internet Freedom, WC Docket No. 17-108, Notice of Proposed Rulemaking, White Paper, “Public Interest Benefits of Repealing Utility-Style Title II Regulation and Reapplying Light- Touch Regulation to Broadband Internet Services, July 17 and August 28, 2017. (Competition analysis)

ON BEHALF OF THE COMMERCE COMMISSION NEW ZEALAND “Review of Covec’s ‘Economic Analysis of 700MHz Allocation,’” Christian Dippon with James Mellsop, Richard Marsden, and Kevin Counsell, February 14, 2014. (Regulatory policy and competition analysis)

ON BEHALF OF THE COMMISSIONER OF COMPETITION The Commissioner of Competition, Applicant and Chatr Wireless Inc, and Rogers Communications Inc., Respondents, Ontario Superior Court of Justice, June 13, 2012, July 25, 2012, August 15–16, 2012. (Economic damages)

ON BEHALF OF FPL GROUP INC. In reference to Adelphia Communications Corp., et al., Adelphia Recovery Trust, v. FPL Group Inc., United States Bankruptcy Court Southern District of New York, July 8, 2011, July 26, 2011, April 17, 2012, and May 2–3, 2012. (Competition analysis)

ON BEHALF OF MICROSOFT MOBILE OY AND NOKIA INC. Before the United States International Trade Commission, In the Matter of Certain 3G Mobile Handsets and Components, Investigation No. 337-TA-613, September 12, 2014, October 3, 2014, October 15, 2014, November 21, 2014, December 12, 2014, and January 28, 2015. (Competition analysis)

Before the United States International Trade Commission, In the Matter of Certain Wireless Devices including Mobile Phones and Tablets II, Investigation No. 337-TA-905, June 26, 2014. (Competition analysis)

ON BEHALF OF MONSTER, INC. Circuit Court of Cook County, Illinois County Department, Chancery Division, Amy Joseph, individually and on behalf of all others similarly situated, Plaintiff, Benjamin Perez, individually and on behalf of all others similarly situated, Intervening Plaintiff vs. Monster, Inc., a Delaware Corporation and Best Buy Co, Inc., a Minnesota Corporation, Defendants, Case No. 2015 CH 13991, September 9, 2016 and February 8, 2018. (Economic damages)

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ON BEHALF OF NETLINK TRUST Before the Info-communications Development Authority of Singapore (IDA), “The Appropriate Cost Methodology for Price Regulation of Interconnection Wholesale Fiber Services,” Christian Dippon with Dr. Bruno Soria, December 15, 2015. (Regulatory policy)

ON BEHALF OF NOKIA CORPORATION AND NOKIA INC. Before the United States International Trade Commission, In the Matter of Certain Wireless Devices with 3G and/or 4G Capabilities and Components Thereof, Investigation No. 337-TA- 868, August 23, 2013, September 5, 2013, September 20, 2013, October 8, 2013, November 19, 2013, December 6, 2013, January 6, 2014, and February 18, 2014. (Competition analysis)

Before the United States International Trade Commission, In the Matter of Certain Integrated Circuit Devices and Products Containing the Same, Investigation No. 337-TA-873, August 30, 2013, September 16, 2013, and March 6, 2014. (Competition analysis)

ON BEHALF OF NOKIA SOLUTIONS AND NETWORKS US LLC In the Matter of the Arbitration between MTPCS, LLC d/b/a Cellular One vs. Nokia Solutions and Networks US LLC d/b/a Nokia Networks, Before the American Arbitration Association, RE: 01-15-0003-5349, December 5–6, 2016 (Economic damages and competition analysis) and May 4, 2016. (Economic damages)

Before the American Arbitration Association, Nokia Siemens Networks US LLC n/k/a Nokia Solutions Networks US, Plaintiff vs. Viaero Wireless a/k/a NE Colorado Cellular, Inc., Defendant, Case No. 50 494 T 00510 13, May 27, 2014 and June 2, 2014. (Economic damages)

ON BEHALF OF QATAR TELECOM (QTEL) In Connection with Vodafone Qatar Q.S.C v. Qatar Telecom (Qtel) Q.S.C, Pursuant to Dispute Resolution Agreement Dated 11 November 2010, January 20, 2011 and February 21, 2011. (Economic damages)

ON BEHALF OF SAKAI DISPLAY PRODUCTS CORPORATION In the Matter of an Arbitration under the Rules of Arbitration of the International Chamber of Commerce, ICC Case No. 22511/RD, Samsung Electronics Co., Ltd., Claimant, against Kuroda Electric Co., Ltd., Sakai Display Products Corporation and Sharp Corporation, Respondents, against Samsung Electronics HCMC CE Complex Co., (Vietnam); Samsung Electronics Hungarian Co., Ltd. (Hungary); Samsung Mexicana S.A. de C.V. (Mexico); Samsung Electronics Slovakia S.R.O. (Slovakia); and Tianjin Samsung Electronics Co. Ltd. (China), Counter-Respondents, July 6, 2018. (Economic damages)

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ON BEHALF OF SINGAPORE TELECOMMUNICATIONS LIMITED AND SINGAPORE TELECOM MOBILE PTE. LTD. Before the District Court of Tangerang, “Economic Assessment and Examination of Alleged Anticompetitive Behavior in the Indonesian Mobile Market,” Expert Report by Christian Dippon, Nigel Attenborough, and William Taylor, April 21, 2010. (Economic damages)

Before the Central Jakarta District Court, “Economic Assessment and Examination of Alleged Anticompetitive Behavior in the Indonesian Mobile Market,” Expert Report by Christian Dippon, Nigel Attenborough, and William Taylor, Prepared for Singapore Telecommunications Limited and Singapore Telecom Mobile Pte. Ltd., January 15, 2010. (Economic damages and competition analysis)

ON BEHALF OF SONY COMPUTER ENTERTAINMENT AMERICA LLC Before the United States District Court Northern District of California San Francisco Division, In Re Sony PS3 “Other OS” Litigation, Case No. CV-10-1811 SC, April 4, 2017 and June 7, 2017. (Economic damages)

ON BEHALF OF SPRINT COMMUNICATION COMPANY L.P., SPRINT SPECTRUM L.P., AND NEXTEL OPERATIONS, INC. Before the United States District Court for the Eastern District of Pennsylvania, Comcast Cable Communications, LLC; TVWorks, LLC, and Comcast Mo Group Inc. v. of Sprint Communication Company L.P., Sprint Spectrum L.P., and Nextel Operations, Inc., Civil Action No. 2:12-cv- 00859-JD, July 15, 2015. (Economic damages), March 18, 2016 (Economic damages), February 14, 2017 (Economic damages and incremental cost modeling)

ON BEHALF OF SPRINT SPECTRUM LP AND WIRELESS CO. LP, NEXTEL COMMUNICATIONS INC., AND NEXTEL CALIFORNIA INC. Superior Court of the State of California, County of Alameda, JCCP No. 4332, Case No. RG03114147, Ayyad, et al. v. Sprint Spectrum Limited Partnership, et. al., Cellphone Termination Fee Cases, September 13, 2011, April 26, 2013, May 29, 2013, July 16, 2013, July 30, 2013, April 1, 2016, and January 29, 2016. (Economic damages)

ON BEHALF OF TELE FÁCIL MEXICO, S.A. DE C.V. In the Matter of an Arbitration Under the North American Free Trade Agreement and The Arbitration Rules of the United Nations Commission on International Trade Law (1976) between Joshua Dean Nelson, in His Own Right and On Behalf of Tele Fácil Mexico, S.A., De C.V., and Jorge Luis Blanco (the Claimants) and The United Mexican States (the Respondent), ICSID Case No. UNCT/17/1, November 7, 2017, and June 5, 2018. (Economic damages).

ON BEHALF OF TELUS COMMUNICATIONS COMPANY Before Innovation, Science and Economic Development Canada, SLPB-005-17, August 2017, Spectrum Management and Telecommunications, “Expert Report of Christian M. Dippon, PhD On Behalf of TELUS Communications Inc.,” Consultation on a Technical, Policy and Licensing

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Framework for Spectrum in the 600 MHz Band, October 2, 2017 and November 3, 2017 (Competition Policy).

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 services, September 8, 2017 and December 1, 2017. (Competition Policy)

Zedi Canada Inc. vs. TELUS Communications Company, Expert Report, May 27, 2016; Oral Testimony, June 23, 2016. (Economic damages)

Before the Canadian Radio-television and Telecommunications Commission, Regulatory framework for wholesale mobile wireless services, CRTC 2015-177, November 23, 2015 (Regulatory policy), May 31, 2016 (Competition analysis and cost modeling), April 4, 2017. (Regulatory cost modeling)

Before the Canadian Radio-Television and Telecommunications Commission, CRTC 2014-76, Review of Wholesale Mobile Services, August 20, 2014 (Competition analysis and regulatory policy) and September 30, 2014. (Regulatory policy)

In the Supreme Court of British Columbia between Michelle Seidel, Plaintiff, and TELUS Communications Inc., Defendant, Proceeding under the Class Proceeding Act, R.S.B.C. 1996, c.50, No. L050143, Vancouver Registry, March 3, 2014 and July 4, 2014. (Economic damages)

Before the Canadian Radio-television and Telecommunications Commission, In the Matter of Wholesale Mobile Wireless Roaming in Canada, CRTC 2013-685, January 29, 2014. (Regulatory policy)

ON BEHALF OF U MOBILE SDN BHD “The Refarming of the 900 MHz Spectrum in Malaysia, Expert Report,” September 25, 2010. (Economic damages)

ON BEHALF OF 425331 CANADA INC. AND NEXTWAVE HOLDCO LLC Inukshuk Wireless Partnership, Plaintiff vs. 425331 Canada Inc. and Nextwave HoldCo, LLC, Ontario Superior Court of Justice, Court File CV-13-10031-00CL, April 5, 2013. (Economic damages)

WHITE PAPERS AND CONSULTING REPORTS (2010–PRESENT)

ON BEHALF OF THE AUSTRALIAN CONSUMER AND COMPETITION COMMISSION

“NBN Co’s Proposed Price Structure: An Economic Evaluation,” with Katherine Lowe, Howard Cobb, and Sally Tam, August 31, 2012.

ON BEHALF OF BROADBAND AUSTRALIA LIMITED

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“An Economic Analysis of the Value of Australian Spectrum,” August 5, 2010.

ON BEHALF OF CALINNOVATES

“This Old Act: Economic Repercussions of Relying on the Telecommunications Act of 1996, January 30, 2017.

ON BEHALF OF THE INTERNET ASSOCIATION

“Economic Value of Internet Intermediaries and the Role of Liability Protections,” June 5, 2017

ON BEHALF OF THE ISRAEL MINISTRY OF COMMUNICATIONS AND MINISTRY OF FINANCE “An Examination of Charges for Mobile Network Elements in Israel,” with Nigel Attenborough, Thomas Reynolds, and Sumit Sharma, May 3, 2010; “Mobile Network Cost Elements Model, A Technical Report,” with Nigel Attenborough, Thomas Reynolds, and Sumit Sharma, May 4, 2010.

ON BEHALF OF NETVISION LTD

“Creating Effective Wholesale Access Markets in Israel, Economic Assessment and Policy Recommendation,” April 6, 2011.

ON BEHALF OF THE PALESTINE TELECOMMUNICATIONS COMPANY

“Pricing Consultancy and Regulatory Support, Final Recommendations,” August 4, 2012.

ON BEHALF OF TURK TELECOM

“Wholesale Access to Fiber Ducts and Dark Fiber – A Benchmark Study,” June 28, 2013.

ON BEHALF OF U MOBILE SDN BHD

“U Mobile Sdn BhD, Application for Spectrum Assignment (2600 MHz Spectrum),” November 19, 2010.

ON BEHALF OF WHITWORTH ANALYTICS

“FirstNet: An Economic Analysis of Opting-In vs. Opting-Out,” March 2017.

ON BEHALF OF WIRELESS BROADBAND AUSTRALIA LIMITED

“An Economic Analysis of the Value of Australian Spectrum, August 5, 2010.

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BOOK PUBLICATIONS

K&L Gates – NERA 2008 Global Telecom Review, A Legal and Economic Examination of Current Industry Issues, Christian Dippon and Martin Stern (Eds.), April 23, 2008.

“Regulation under Fixed Mobile Convergence, Examining Recent Developments in Hong Kong,” by Keith Lee, Wendy Lo, Christine Yam, and Christian Dippon, Chapter 4 in K&L Gates – NERA 2008 Global Telecom Review, A Legal and Economic Examination of Current Industry Issues, April 23, 2008, pages 21–26.

“Size Matters, Relevant Market Definition and Competition Review in a World with Intermodal Competition,” by Christian Dippon, Chapter 3 in K&L Gates – NERA 2008 Global Telecom Review, A Legal and Economic Examination of Current Industry Issues, April 23, 2008, pages 15–20.

“Mobile Virtual Network Operators: Blessing or Curse? An Economic Evaluation of the MVNO Value Proposition,” by Christian Dippon and Aniruddha Banerjee, National Economic Research Associates, Inc., ISBN 0-9748788-2-0, 2006.

“The Implications of Convergence in Telecommunications,” by Christian Dippon and Timothy Tardiff, published in The Preston Gates Guide to Telecommunications in Asia, 2006 Edition, Asia Law & Practice, 2006, ISBN 962-936-155-8, pages 31–40.

“When East Meets West –Converging Trends in the Economics of Intellectual Property Damages Calculation,” by Christian Dippon and Noriko Kakihara, Chapter 19 in Economic Approaches to Intellectual Property Policy, Litigation, and Management, edited by Dr. Gregory Leonard and Dr. Lauren J. Stiroh, National Economic Research Associates, Inc., 2005, ISBN 0-9748788-1-2, pages 277–291.

“Marketing Research,” Chapter 4 in Internet Marketing: Building Advantage in a Networked Economy, an MBA coursework textbook by Rafi Mohammed, Robert J. Fisher, Bernard Jaworski, Aileen M. Cahill, published by McGraw-Hill Higher Education, ISBN 0-07-251022-6, pages 127–167.

PAPER AND ARTICLE PUBLICATIONS (2010–PRESENT)

“Do Economic, Institutional, or Political Variables Explain Regulated Wholesale Unbundled Local Loop Rate Setting,” with Dr. Gary Madden and Dr. Hiroaki Suenaga, accepted for publication in Applied Economics, January 2016.

“FCC Open Internet Order Creates Uncertainty and Risk,” with Marty Stern and Sam Castic (K&L Gates), published in Corporate Counsel, July 27, 2015.

“Is It Worth the Effort? Measuring the Benefits of D-Efficient Survey Design to Qualitative Choice Analysis,” submitted for publication to Marketing Letters, November 1, 2014.

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“Consumer Demand for Mobile Phone Service in the US: An Examination beyond the Mobile Phone,” submitted for publication to Information Economic and Policy, November 1, 2014.

“Is Faster Necessarily Better? Third Generation (3G) Take-up Rates and the Implications for Next Generation Services,” published in International Journal of Communications, Network and System Sciences, Vol.5 No.8, 2012, September 2012.

“Replacement of the Legacy High-Cost Universal Support Fund with a Connect America Fund, Key Economic and Legal Considerations,” with Christopher Huther and Megan Troy, Communications & Strategies 80, 4Q2010, pages 67–81.

“Is Faster Necessarily Better? Third Generation (3G) Take-up Rates and the Implications for Next Generation Services,” June 28, 2010, presented at the International Telecommunications Society (ITS) 18th Biennial and Silver Anniversary Conference, Tokyo, Japan, June 30, 2010.

“Wholesale unbundling and intermodal competition,” with Dr. Harold Ware, published in Telecommunications Policy, Volume 34, Numbers 1-2, February-March 2010.

SELECTED NEWS CITATIONS (2010–PRESENT)

Giuseppe Marci, “Economists Predict Net Neutrality Cost 700K Jobs and $35 Billion Annually,” Inside Sources, July 20, 2017.

Giuseppe Marci, “Former FCC Economist Says Unlocking the Set-Top Box Will Hurt the TV Market,” Inside Sources, April 23, 2016.

CALInnovates, PRNewswire, “FCC Set-Top Box Proposal Based Upon Faulty Economic Foundation, Will Harm Consumers, Innovators And Golden Age of Television, Warns CALInnovates,” April 22, 2016.

Sophia Harris, “Telus speed claim not based on real-world experience,” CBC News, October 15, 2014.

Gus Sentementes, “Data-thirsty smartphones lead wireless companies to prep 4G networks,” The Baltimore Sun, October 18, 2010.

SELECTED SPEECHES AND PRESENTATIONS

“Can Femtocells Resolve the Spectrum Crunch?” Presented at the International Telecommunications Society 6th Africa-Asia-Australasia Regional Conference, Curtin Business School, Curtin University, Bentley, Western Australia, August 7, 2013.

“Modern Approaches to Spectrum Valuation,” Presented at the International Telecommunications Society 6th Africa-Asia-Australasia Regional Conference, Curtin Business School, Curtin University, Bentley, Western Australia, August 5, 2013.

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“Consumer Demand for Mobile Phone Service in the US: An Examination Beyond the Mobile Phone,” Presented at the International Telecommunications Society (ITS) 19th Biennial Conference, Bangkok, Thailand, November 20, 2012.

“The Link Between Spectrum Availability and Mobile Market Consolidation,” Session Chair, Second Annual Spectrum Management Conference, Washington DC, October 23, 2012.

“Consumer Demand for Mobile Phone Service in the U.S.: An Examination beyond the Mobile Phone,” Prepared for the National Regulatory Research Institute (NRRI), March 19, 2012.

“Consumer Demand for Mobile Phone Service in the U.S.: An Examination beyond the Mobile Phone,” Prepared for Wiltshire & Grannis LLP, March 13, 2012.

“Consumer Demand for Mobile Phone Service in the U.S.: An Examination beyond the Mobile Phone,” Prepared for Verizon Wireless, February 7, 2012.

“Consumer Demand for Mobile Phone Service in the U.S.: An Examination beyond the Mobile Phone,” Prepared for AT&T Wireless, February 8, 2012.

“Broadband, Productivity, and Product Innovation - A Look behind the Scenes in the United States,” invited Keynote Address, 5th Africa-Asia-Australasia Regional Conference, International Telecommunications Society Perth, Western Australia, November 15, 2011.

“Build It and They Will Come, Consumer Willingness to Pay for Mobile Broadband Services,” 5th Africa-Asia-Australasia Regional Conference, International Telecommunications Society Perth, Western Australia, November 14, 2011.

“Consumer Preferences for Mobile Phone Service in the US – An Application of Efficient Design to Conjoint Analysis,” Guest Lecture, University of California, Santa Barbara, March 1, 2011.

“Wireless Litigation and Spectrum Valuations, Current topics in the U.S. wireless sector,” Prepared for Arnold & Porter, LLP, February 17, 2011.

“Bringing Broadband to the Masses, Practical Considerations in Implementing the National Broadband Plan,” Prepared for Latham & Watkins, LLP, November 5, 2010.

“Wireless Litigation in the US, The Quest to Regulate the Wireless Sector,” Prepared for SNR Denton, November 4, 2010.

“Update on Key U.S. and International Wireless and Data Issues,” Federal Communications Bar Association, International Telecommunications and Wireless Practice Committee, hosted by Wiley Rein LLP, Washington, DC, May 26, 2010.

August 2, 2018

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