An Examination of the Regulatory Framework for Mobile Virtual Network Operators and Other Wholesale Mobile Services

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised

BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION

CRTC 2019-57 REVIEW OF MOBILE WIRELESS SERVICES

An Examination of the Regulatory Framework for Mobile Virtual Network Operators and Other Wholesale Mobile Services

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

May 15, 2019 CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework for Wholesale Mobile Services

Table of Contents

EXECUTIVE SUMMARY ...... I I. INTRODUCTION ...... 1 II. THE “MVNO MARKET” IS NOT SUSTAINABLE AND IS NOT A COMPETITIVE FORCE ...... 4 A. OECD Country Market Trends Remain Largely Unchanged Since 2014 ...... 5 1. MVNO subscriber shares have remained constant since 2014 ...... 5 2. The number of MVNOs in OECD countries has modestly increased since 2014...... 8 3. MVNOs continue to focus on niches in the market ...... 9 B. The Empirical Evidence Demonstrates No Retail Effects ...... 14 III. REGULATORS CONTINUE TO REFRAIN FROM REGULATING MVNO ACCESS ...... 25 1. Regulators do not endorse MVNO wholesale access regulation ...... 25 2. Regulated MVNO regimes refrained from wholesale access ...... 29 IV. MVNO MERGER REMEDIES ARE NOT RELEVANT AND CONFIRM THE LACK OF MVNO COMPETITIVE IMPACT ...... 32 A. Merger Remedies Mandating MVNOs Are Irrelevant for the Current Review ...... 33 1. Austria ...... 35 2. Ireland ...... 36 3. Germany ...... 37 V. THE 2014 COMMISSION REVIEW SERVES AS A PROPER STARTING POINT FOR THE CURRENT REVIEW...... 38 A. The CRTC Has Already Addressed MVNO Wholesale Access ...... 39 B. The Relevant Market Remains Very Competitive ...... 41 C. Wholesale and Retail Markets Have Grown Since 2014 ...... 41 D. Existing Wholesale Regulation Already Enables Retail Competition ...... 42 E. The CRTC’s Recent Market Interventions Are Not Signs of Wholesale Market Failure ...... 45 VI. IMPOSING MANDATED MVNO ACCESS WILL HARM CANADIAN CONSUMERS ...... 48 A. The Economic Literature Confirms the Negative Investment Incentive ...... 48 B. Wholesale Access Seekers Invest Minimally ...... 50 VII. CONCLUSIONS ...... 52 APPENDIX A: CURRICULUM VITAE OF CHRISTIAN M. DIPPON, PH.D...... 53

NERA Economic Consulting

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework for Wholesale Mobile Services

List of Figures

Figure 1: Correlation Values – ARPU and Total “MVNO Market” Share ...... 15 Figure 2: Correlation Values – ARPU and IO “MVNO Market” Share...... 16 Figure 3: Correlation Values – Download Speed and Total “MVNO Market” Share...... 17 Figure 4: Correlation Values – Download Speed and IO “MVNO Market” Share ...... 18 Figure 5: Correlation Values – Churn Rates and Total “MVNO Market” Share ...... 19 Figure 6: Correlation Values – Churn Rates and IO “MVNO Market” Share ...... 19 Figure 7: Correlation Values – Data Usage and Total “MVNO Market” Share ...... 20 Figure 8: Correlation Values – Data Usage and IO “MVNO Market” Share ...... 21 Figure 9: Correlation Values – 4G Take-Up Rate and Total “MVNO Market” Share...... 22 Figure 10: Correlation Values – 4G Take-Up Rate and IO “MVNO Market” Share ...... 22 Figure 11: Correlation Values – Capacity Utilization and Total “MVNO Market” Share ...... 23 Figure 12: Correlation Values – Capacity Utilization and IO “MVNO Market” Share ...... 24

List of Tables

Table 1: Total MVNO Subscriber Shares OECD – 2014 and 2018 ...... 6 Table 2: IO MVNO Subscriber Shares OECD – 2014 and 2018 ...... 7 Table 3: Change in Number of MVNOs between 2014 and 2018 in OECD Countries ...... 8 Table 4: MVNO Count OECD –2018 ...... 9 Table 5: Non-Niche MVNOs vs. Niche MVNOs OECD 2018 ...... 10 Table 6: IO Non-Niche MVNOs vs. IO Niche MVNOs OECD 2018...... 10 Table 7: Niche IO and OO MVNOs in OECD Countries ...... 12 Table 8: Canadian MVNOs – December 2018 ...... 13 Table 9: MVNO Access Regulation in OECD Countries and IO MVNO Share ...... 26 Table 10: EC Remedy Components in 4-to-3 Mergers ...... 34 Table 11: Canadian Telecommunications Revenue and Investments by Provider Type...... 51

NERA Economic Consulting

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Executive Summary for Wholesale Mobile Services

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

EXECUTIVE SUMMARY

ES1. This report responds to the Commission’s preliminary view to regulate the wholesale

access market for MVNOs. Using actual data from Canada and other OECD countries, the

evidence clearly demonstrates that implementing wholesale MVNO access regulation will

harm Canadian consumers. The main findings leading to this conclusion include:

. MVNOs have little to no competitive impact as their business model focuses on identifying niches in the market, rather than competing in existing markets.

. MVNOs are generally not sustainable as market saturation and competition yields few, if any, viable niches in the market.

. There has been no economic change in Canada or elsewhere that warrants a change in the Commission’s 2015 decision that MVNO regulation was not beneficial, but rather would be harmful.

. MVNOs do not benefit consumers as data from OECD countries find no relationship between the MVNO share in the market and the consumer experience.

. OECD regulators largely refrain from intervening in the MNO-MVNO relationship and the three regulators that have some form of regulation still predominately rely on commercial negotiations and do not mandate regulated wholesale access rates.

. Imposing wholesale access regulation nevertheless will reduce network investment. With no benefits from MVNOs, the net effect for Canadian consumers will be negative.

ES2. As was the case in 2014 when the Commission assessed the competitive effects of mobile

virtual network operators (MVNOs), these service providers still do not meaningfully add

to the competitive forces in the relevant marketplace. MVNOs remain niche players prone NERA Economic Consulting i

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Executive Summary for Wholesale Mobile Services

to exit from the market or acquisition by their host mobile network operators (MNOs) due

to market forces. Similarly, imposing a regulated wholesale access market for MVNOs

nevertheless, still induces inefficient MVNO entry and results into lower network

investments. Thus, the net effect of MVNO regulation remained unchanged: Regulating

the wholesale access market for MVNOs stands to harm, not benefit, Canadian consumers.

ES3. Data from the OECD find no relationship between MVNO share of the market and an

improved consumer experience (e.g., higher download speeds), demonstrating that these

providers do not enhance competition. Regulators worldwide agree and rarely intervene in

the MNO-MVNO relationship. Even in the rare instances of intervention, the regulators

rely principally on commercial negotiations and refrain from mandating wholesale MVNO

access.

ES4. The Canadian market environment does not require further wholesale regulation because

it is already competitive. Moreover, it is one of the most regulated mobile wireless markets

in the world. There are several regulatory measures place (e.g., regulated domestic

wholesale roaming) in the off chance that market forces should fail. Simply put, there is no

need to regulate MVNO access as it would not elicit additional benefits but rather is likely

to harm Canadian consumers as it will negatively impact future investment.

ES5. I urge the Commission to examine closely the international evidence on MVNOs,

particularly since 2014 when the Commission decided to refrain from regulating MVNO

access. This evidence shows that although the number of MVNOs in the OECD countries

has increased slightly, total MVNO share of the market remains small and unchanged,

indicating that the average MVNO has become even less sustainable and effective in

today’s marketplace. The MVNO business model also remains one that focuses on niches

NERA Economic Consulting ii

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Executive Summary for Wholesale Mobile Services

of the market. Approximately 87 percent of all independent-owned (IO) MVNOs in the

OECD elect not to compete directly with MNOs but focus on niches in the market, limiting

their competitive impact.

ES6. Market data confirm the MVNOs inability to influence retail prices and failure to enhance

the consumer experience. The size of the “MVNO market” is not correlated with faster

download speeds, greater 4G take-up rates, ARPU, better per-capita data usage, higher

churn rates, or more spectrum capacity utilization.

ES7. The OECD regulators’ perceptions of MVNOs also remain unchanged. Twenty-four of the

36 regulators do not regulate MVNO access. Spain, which was one of the rare exceptions

of MVNO-related regulation in 2014, decided to amend its regulatory regime and now

relies on market forces. Similarly, Turkey decided to sunset its MVNO regulation by April

2019. Israel never regulated MVNO access. In fact, the Israeli regulator specifically

rejected MVNO regulation and instead relies on commercial negotiations with a regulatory

backstop.

ES8. More important, the European Union discourages its national regulatory agencies from

MVNO regulation and instead promotes reliance on competition law. In nine OECD

countries, there is a limited MVNO mandate, although for idiosyncratic reasons that do not

apply to Canada. Specifically, in three of the nine countries, MVNO regulation was part of

a merger remedy. In another three countries, MVNO access, at times, has been part of the

spectrum license process, and in three other countries MVNO regulation applies to the

provider with individual significant market power. The only three countries that have some

form of MVNO-related regulation are Chile, the Czech Republic, and Japan. The regulators

in these three countries aimed at facilitating the MNO-MVNO relationship and addressed

NERA Economic Consulting iii

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Executive Summary for Wholesale Mobile Services

only specific failures to negotiate honestly and fairly. Notably, the three regulators

refrained from mandating wholesale MVNO access regulation. Instead, all three regulators

continued to rely on commercial negotiations, albeit with varying different regulatory

measures. With 1.9 percent, 9.4 percent, and 11.8 percent total MVNO subscriber share of

the market in Chile, the Czech Republic, and Japan, respectively, the regulatory framework

has not produced different results than in OECD countries without MVNO regulation.

ES9. Although the regulators’ perception of MVNOs has remained unchanged since 2014, the

European Commission has on selected occasions used MVNOs in European market

consolidations as a part of merger remedies. In the 2012 Austrian merger, the EC required

the merged entity (and no other market participant) to offer up to 30 percent of its capacity

for wholesale access for up to 16 MVNOs over 10 years. It also had to secure at least one

MVNO prior to the merger. In Ireland, the merged party was required to commit to two

MVNOs, capped at 15 percent capacity each for five years, extendable for another five

years. It also had to secure at least one MVNO prior to the merger. In Germany, the merged

entity had to offer 30 percent capacity for up to three MVNOs. On the other hand, the EC

imposed no MVNO merger remedy in Italy, and the Netherlands regulator cleared a recent

merger in the Netherlands without any conditions.

ES10. These “merger MVNOs” are irrelevant for the present consultation as they were part of a

market consolidation agreement that applied to three-MNO markets only (Canada has four

MNOs in each province) and only to the merged entity. The MVNO remedies had very

limited, if any, impact on retail competition. In Austria, despite resulting in the (inefficient)

entry of several dozen MVNOs, the remedy managed to create only one IO MVNO that

achieved a relatively sizable subscriber share of 6.6 percent. This MVNO, Hot Telecom,

NERA Economic Consulting iv

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Executive Summary for Wholesale Mobile Services

focuses on the prepaid niche and given its size and focus likely has a minor, if any,

competitive impact. In Ireland, the MVNO remedy attracted merely two MVNOs, one of

which has exited the market and another that currently has a share of 1.6 percent. In

Germany, the merger remedy also had no discernable impact on the retail market.

ES11. In addition to the MVNOs’ failure to affect the competitive outcome and the international

regulators’ continued reliance on commercial negotiations, there is also no economic

justification for further wholesale regulation, let alone a mandate of wholesale MVNO

access. First, the CRTC decided after its 2014 market review that it would refrain from

mandating wholesale MVNO access because of the negative investment incentive such

regulation would create. Nothing has changed that would warrant overriding these

concerns. In fact, with the impeding deployment of 5G networks, infrastructure investment

is more important than ever.

ES12. Second, the CRTC already has taken specific steps to facilitate MVNO entry by providing

MVNOs with their own mobile network codes and requiring that Bell, Rogers, and TELUS

provide GSM roaming to MVNOs operating on their roaming partners’ networks.

ES13. Third, and most important from an economic and regulatory perspective, the Canadian

market for mobile wireless services remains competitive. There is widespread agreement

among economists and regulators that the process of competition in effectively competitive

retail markets leads to the best outcome for consumers.

ES14. Fourth, there is also ample evidence that wholesale and retail markets have grown since

the CRTC’s 2015 decision. With its acquisition by Shaw, Freedom (formerly WIND) now

has access to spectrum in all provinces except Saskatchewan and Manitoba. Videotron has

NERA Economic Consulting v

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Executive Summary for Wholesale Mobile Services

recently launched its own sub-brand “Fizz,” and Lucky Mobile entered the market as a new

sub-brand of Bell. Also, a new IO MVNO, dot.mobile, is planning to launch in 2020.

ES15. Finally, the Canadian mobile wireless market is also one of the most regulated markets in

the world—it has more than enough regulatory measures for wholesale and retail

competition. Regulatory measures include domestic mandated wholesale roaming (which

is unprecedented in the developed world), licensing conditions in the form of spectrum set-

asides and spectrum caps, and retail measures such as mandating entry-level data-only

plans and the introduction of a code of conduct.

ES16. Economic regulation of retail or wholesale markets is only warranted to correct some

explicit market failure. The CRTC noted that it believed such a failure occurred in two

wholesale related instances. Neither of these two instances was a market failure but simply

the enforcement of a previous decision where the Wi-Fi first provider made inappropriate

use of roaming agreements. These so-called problems bear no relationship to MVNO

wholesale access, let alone access to the networks of Rogers, Bell and TELUS. Imposing

regulation on all nationwide providers for all MVNO access is entirely unwarranted

because there is no evidence that MVNOs have trouble accessing the Rogers, Bell or

TELUS networks. Furthermore, the existence of an unsuccessful negotiation is not grounds

for regulatory intervention.

ES17. Mandating wholesale MVNO access despite the vast body of evidence demonstrating that

no consumer benefits will emerge and that it will harm Canadian consumers is not the way

to regulate. The economic literature confirms the negative investment incentive of the

proposed action, and available investment data show that Canadian wholesale access

NERA Economic Consulting vi

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Executive Summary for Wholesale Mobile Services

seekers do not offset this negative investment incentive. In fact, they invest minimally,

which is evidence that they do not aspire to climb the proverbial ladder of investment.

ES18. Because (a) MVNOs do not represent a competitive force and have no consumer welfare-

enhancing effects (e.g., not leading to improved download speeds, increased data usage),

(b) the market is already competitive, (c) there are more regulatory measures in place than

in most, if not all, other countries, and (d) regulating wholesale MVNO access nevertheless

will harm Canadian consumers, it is my expert opinion that the CRTC should continue to

refrain from mandating wholesale MVNO access.

NERA Economic Consulting vii

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Introduction for Wholesale Mobile Services

I. INTRODUCTION

1. My name is Christian M. Dippon. My business address is 1255 23rd Street, Suite 600,

Washington, DC, 20037. I am a Managing Director at the Washington, DC, office of

NERA Economic Consulting (NERA) where I also serve as chair of the Global Energy,

Environment, Communications & Infrastructure (EECI) practice. I have specialized in

regulatory, competition matters and complex litigation disputes in the communications,

Internet, and high-tech sectors for over 23 years. I received a Bachelor of Science in

Business Administration (with honors) from the California State University, a Master of

Arts in Economics from the University of California, and a Doctor of Philosophy in

Economics from Curtin University (Perth, Australia).

2. My research has included the competitive ramifications of disruptive technologies and

market consolidations, the dynamics of the multisided markets of the Internet ecosystem,

and the need or lack thereof of regulatory intervention. 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 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

my work.

3. I routinely offer expert testimony in regulatory and litigation cases in the

telecommunications sector. I have testified in depositions, jury and bench trials in U.S.

state and federal courts, U.S. (AAA) arbitrations, international (UNCITRAL, ICC, ICSID)

NERA Economic Consulting 1

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Introduction for Wholesale Mobile Services

arbitrations, and in matters before international courts, the U.S. Federal Communications

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

4. I also have extensive testimonial experience in Canada before the Competition Bureau

Canada, Innovation, Science, and Economic Development (ISED), and the Canadian

Radio-television and Telecommunications Commission (CRTC). Notably, I filed expert

reports and provided oral testimony in the CRTC’s prior review of wholesale mobile

wireless services (CRTC 2014-76) with respect the competitive effect, or lack thereof, of

MVNOs in Canada.1

5. I have published, lectured, and consulted extensively on MVNOs, their business cases and

market performance, and the regulatory environment in which they negotiate and operate.

My MVNO-related publications are listed in my curriculum vitae, which is in Appendix A

of this report. These publications include a book on MVNOs and their relationship with

MNOs, publications in peer-reviewed journals, and several articles published and cited in

newspapers and the trade press. I have also consulted to clients worldwide on MVNO-

related issues, including drafting the prevailing policy with respect to wholesale MVNO

access for the State of Israel.

6. I prepared this report at the request of TELUS Communications Inc. (TELUS) in response

to Telecom Notice of Consultation CRTC 2019-57.2 TELUS requested that I examine the

effectiveness of wholesale regulation, particularly as it pertains to “the Commission’s

1 See Before the Canadian Radio-Television and Telecommunications Commission, “Assessing the Competitive Effects of Mobile Virtual Network Operators,” CRTC 2014-76, Review of Wholesale Mobile Wireless Services, Expert Report of Christian M. Dippon, Ph.D., On Behalf of TELUS Communications Company, August 20, 2014 (hereinafter 2014 MVNO Report). 2 See CRTC, Telecom Notice of Consultation CRTC 2019-57, Notice of hearing, Review of mobile wireless services, Feb. 28, 2019, Public record: 1011-NOC2019-0057 (hereinafter the Notice).

NERA Economic Consulting 2

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Introduction for Wholesale Mobile Services

preliminary view that it would be appropriate to mandate that national wireless carriers

provide wholesale MVNO access as an outcome to this proceeding.”3

7. TELUS retained me as an independent expert in this matter. As such, neither my

compensation nor my firm’s compensation is dependent in any way on the substance of

my opinions or the outcome of this matter. I may revise and supplement my opinions upon

further review and analysis of any new data, materials, analysis, or pleadings.

8. The remaining structure of this report is as follows. Section II examines domestic and

international market developments with respect to MVNOs since the Commission’s last

review of MVNOs in 2014. Section III surveys telecommunications regulators abroad in

their decisions to mandate or refrain from mandating regulated wholesale MVNO access.

Section IV explains why MVNOs mandated by the European Commission as part of market

consolidations offer no relevant insights and (notwithstanding) have had limited

competitive impact. Section V ties the findings in this report to economic market

conditions, as detailed by Dr. Robert Crandall, and the regulatory measures that the CRTC

and ISED put in place prior to and since the CRTC’s 2014 review of wholesale mobile

wireless services.4 Section VI discusses the consumer harm that a regulatory framework

for MVNO access could cause. Section VII presents my recommendations and conclusion.

3 Notice, ¶ 39. 4 See Before the Canadian Radio-television and Telecommunications Commission, Expert Report of Robert W. Crandall, The Canadian Mobile Wireless Services Sector, on behalf of TELUS Communications Company, CRTC 2019-57, May 15, 2019 (hereinafter Crandall Report).

NERA Economic Consulting 3

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework The “MVNO Market” Is Not Sustainable and Is Not for Wholesale Mobile Services a Competitive Force

II. THE “MVNO MARKET” IS NOT SUSTAINABLE AND IS NOT A COMPETITIVE FORCE

9. The present consultation involves the potential regulation of “wholesale MVNO access,”5

with the hope of creating “a sustainable MVNO market,”6 which provides “additional

competitive retail options to Canadian consumers.”7 Before addressing the Commission’s

questions, it is important to highlight that MVNOs do not form their own economic market

or markets. I understand that the Commission uses the term “MVNO market” to refer to

the group of MVNOs operating in a given country. To avoid any confusion with an

economic market, I henceforth put the term in quotation marks, i.e., “MVNO market” or

“MVNO markets.”

10. MVNOs are not a new concept, and a proper assessment of this consultation involves

examining whether the MVNOs’ international track record finds a sustainable “MVNOs

market” that effectively competes with MNOs. In my 2014 review of the competitive

impact of IO MVNOs, I concluded:

MVNOs do not increase retail competition. They are not designed to compete with MNOs and are incapable of disciplining the prices of MNOs. The success of independent MVNOs … is extremely poor with most of them not successful in mature retail markets.8

As this section demonstrates, this assessment remains unchanged in 2019, irrespective of

whether one considers only IO MVNOs or also operator-owned (OO) MVNOs. More

important, there is no reason to believe circumstances will change. MVNOs will continue

to focus on niches in the market, and if they do not exit the market due to market forces,

their MNOs will likely acquire them, which is another measure of exit.

5 Notice, ¶ 39. 6 Ibid., ¶ 38. 7 Ibid., ¶ 37. 8 2014 MVNO Report, ¶ 15 NERA Economic Consulting 4

11. Two types of marketplace evidence taken from OECD countries demonstrate that MVNOs

continue to have no competitive impact and thus promise no benefits to Canadian

consumers (although, as discussed later in this report, imposing MVNO regulation

nevertheless stands to significantly harm consumers). First, the market trends for MVNOs,

including IO MVNOs, remained largely unchanged between 2014 and 2018 as MVNOs

retained approximately the same subscriber shares, increased slightly in their subscriber

counts, and continued to focus on niche markets instead of competing with MNOs. Second,

empirical evidence finds no relationship between MVNO subscriber shares and measures

of market performance (e.g., download speed, churn rates). Thus, even if the CRTC were

able to create a “sustainable retail MVNO market,” it will not enhance competition or

create the market anticipated by the CRTC.

A. OECD Country Market Trends Remain Largely Unchanged Since 2014

12. In the four plus years since the CRTC’s last review, the number of MVNOs in OECD

countries has increased slightly but total subscriber shares have remained small and

constant. Thus, the limited market success of MVNOs has remained unchanged and

perhaps got slightly worse because the average size of an MVNO has decreased.

1. MVNO subscriber shares have remained constant since 2014

13. The public perception of MVNOs has not changed since the CRTC’s last review. As shown

in Table 1, the average total MVNO subscriber share in OECD countries increased from

10.8 percent in 2014 to 11.7 percent in 2019, a change of 0.9 percentage points. In six

countries, the MVNO subscriber share increased by at least three percentage points, and in

four countries it decreased by at least the same amount.

NERA Economic Consulting 5

Table 1: Total MVNO Subscriber Shares OECD – 2014 and 2018

MVNO Share MVNO Share Country (Dec. 2014) (Dec. 2018) Change Country (Dec. 2014) (Dec. 2018) Change (3)-(2) (3)-(2) (1) (2) (3) (4) (1) (2) (3) (4)

Australia 10.1% 11.8% 1.7% Latvia 10.7% 7.5% -3.2% Austria 15.8% 25.5% 9.7% Lithuania 1.9% 2.0% 0.1% Belgium 20.0% 11.9% -8.1% Luxembourg 4.6% 7.1% 2.5% Canada 29.0% 28.8% -0.2% Mexico 0.2% 1.4% 1.2% Chile 1.9% 1.9% 0.0% Netherlands 25.5% 23.3% -2.2% Czech Republic 7.3% 9.4% 2.1% New Zealand 2.8% 5.2% 2.4% Denmark 34.6% 33.5% -1.1% Norway 9.8% 9.2% -0.6% Estonia 4.3% 6.0% 1.7% Poland 2.1% 4.1% 2.0% Finland 1.0% 0.9% -0.1% Portugal 2.0% 2.2% 0.2% France 24.7% 28.6% 3.9% Slovakia 3.4% 5.6% 2.2% Germany 46.6% 47.5% 0.9% Slovenia 6.9% 2.8% -4.1% Greece 1.3% 2.5% 1.2% South Korea 8.0% 12.1% 4.1% Hungary 2.6% 3.1% 0.5% Spain 14.8% 16.8% 2.0% Iceland 3.6% 2.0% -1.6% Sweden 18.2% 13.1% -5.1% Ireland 8.3% 10.5% 2.2% Switzerland 21.9% 24.8% 2.9% Israel 1.9% 2.9% 1.0% Turkey 0.6% 1.1% 0.5% Italy 7.8% 11.9% 4.1% United Kingdom 15.5% 18.6% 3.1% Japan 6.1% 11.8% 5.7% United States 12.8% 13.8% 1.0%

Average Share 10.8% 11.7% 0.9% Median Share 7.6% 9.3% 1.8%

Note: Includes IO and OO MVNOs. Source: TeleGeography, GlobalComms database, March-May 2019.

14. Canada’s MVNO subscriber share remains well above the international experience. With

a total MVNO subscriber share of 28.8 percent, Canada’s MVNO subscriber share is far

above the OECD average and median. International IO MVNOs still struggle and have

been unable to attract a significant market share. Specifically, as Table 2 demonstrates,

average subscriber shares of IO MVNOs grew from 3.9 to 5.3 percent, an increase of 1.4

percentage points. The median subscriber share of the independent “MVNO market”

remains very low, increasing slightly from 2.0 percent in 2014 to 2.9 percent in 2018.9

9 There are no known subscriber shares for Canadian IO MVNOs, making an assessment impossible. NERA Economic Consulting 6

Table 2: IO MVNO Subscriber Shares OECD – 2014 and 2018

MVNO Share MVNO Share Country (Dec. 2014) (Dec. 2018) Change Country (Dec. 2014) (Dec. 2018) Change (3)-(2) (3)-(2) (1) (2) (3) (4) (1) (2) (3) (4)

Australia 5.5% 6.6% 1.1% Latvia 0.0% 0.0% 0.0% Austria 0.0% 8.3% 8.3% Lithuania n/a n/a n/c Belgium 8.8% 11.6% 2.8% Luxembourg n/a n/a n/c Canada n/a n/a n/c Mexico 0.2% 1.1% 0.9% Chile 1.9% 1.9% 0.0% Netherlands 12.3% 9.1% -3.3% Czech Republic 5.8% 6.7% 1.0% New Zealand 0.0% 0.4% 0.4% Denmark 1.3% 1.8% 0.6% Norway 4.5% 6.3% 1.8% Estonia n/a n/a n/c Poland 0.4% 1.2% 0.8% Finland n/a n/a n/c Portugal 2.0% 2.2% 0.2% France 9.8% 9.5% -0.3% Slovakia 0.0% 0.0% 0.0% Germany 17.6% 23.7% 6.1% Slovenia 0.6% 2.7% 2.1% Greece n/a n/a n/c South Korea 3.2% 4.4% 1.2% Hungary 0.1% 1.0% 0.9% Spain 2.7% 6.8% 4.1% Iceland 0.4% 2.0% 1.6% Sweden 2.0% 0.9% -1.1% Ireland 2.3% 1.6% -0.7% Switzerland 6.6% 8.5% 1.8% Israel 1.3% 2.9% 1.6% Turkey n/a n/a n/c Italy 6.4% 10.7% 4.3% United Kingdom 7.4% 8.0% 0.7% Japan 0.6% 2.9% 2.3% United States 9.2% 9.8% 0.6%

Average Share 3.9% 5.3% 1.4% Median Share 2.0% 2.9% 0.9%

Note: Includes IO MVNOs only. Source: TeleGeography, GlobalComms database, March-May 2019.

15. As these statistics demonstrate, individual IO MVNOs almost never reach a market share

of over 10 percent. The only known exception is the IO MVNO freenet in Germany with a

reported 2018 subscriber share of 10.2 percent. However, this IO MVNO is the result of a

series of mergers with the earliest merging entity dating back to 1992. 10 IO MVNOs

struggle to reach even a 5 percent subscriber share, and there are only five known examples

(Lycamobile in Belgium, 1&1 Drillisch in Germany, Tracfone in the United States,

PosteMobile in Italy, and HoT Telekom in Austria) in addition to freenet.11

10 Freenet grew out of a merger with debitel (2008), which previously acquired Talkline (2007). 11 See TeleGeography GlobalComms database. NERA Economic Consulting 7

2. The number of MVNOs in OECD countries has modestly increased since 2014

16. Table 3 shows the change in the number of MVNOs since December 2014 by OECD

country. Although the number of IO and OO MVNOs per country increased on average by

2.1 MVNOs, as shown below, the subscriber shares remained largely constant between

2014 and 2018. This implies that the average subscriber share of a single MVNO dropped

even further below the one percentage point mark.12 The same trend holds for the number

of IO MVNOs, which increased on average by 1.7 MVNOs per country. Contrasted against

the average IO MVNO subscriber share of 5.3 percent per country, this implies that a

typical IO MVNO also has a minimal share.

Table 3: Change in Number of MVNOs between 2014 and 2018 in OECD Countries

All MVNOs All MVNOs Including Including Unknown Unknown Country Independent MNO-Owned Ownership Country Independent MNO-Owned Ownership

(1) (2) (3) (4) (1) (2) (3) (4)

Australia 5 0 6 Latvia 0 0 0 Austria 16 1 17 Lithuania 1 0 1 Belgium -3 0 -3 Luxembourg 0 0 0 Canada -1 1 1 Mexico 10 -1 9 Chile -1 0 -1 Netherlands 1 -4 -4 Czech Republic 0 0 1 New Zealand 3 0 3 Denmark -3 -5 -8 Norway 1 0 2 Estonia -1 0 -1 Poland 4 0 4 Finland 2 -1 1 Portugal 1 0 1 France 0 -4 -3 Slovakia 0 1 0 Germany 12 -1 11 Slovenia 1 0 2 Greece -1 0 -1 South Korea 2 0 2 Hungary 1 -1 -1 Spain -1 2 4 Iceland -2 2 0 Sweden 3 1 4 Ireland -1 1 0 Switzerland 1 2 3 Israel -1 0 -1 Turkey 1 0 1 Italy -2 2 1 United Kingdom 8 2 13 Japan 2 0 2 United States 4 1 8

Average 1.7 0.0 2.1 Median 1.0 0.0 1.0

Note: Only considers MVNOs for which the entry date is known. Source: TeleGeography, GlobalComms database, March 2019.

12 With an average subscriber share of 11.7 percent and an average MVNO count of 16.5, the average size of an MVNO is below one percentage point of the subscriber market. NERA Economic Consulting 8

17. There also does not appear to be a problem with negotiating wholesale access agreements

in Canada. As Table 4, column (4) shows, Canada’s total MVNO count is between the

OECD median and average and thus in line with the international experience.13 Similarly,

with 13 IO MVNOs, Canada is between the OECD average and median.

Table 4: MVNO Count OECD –2018

Source: TeleGeography, GlobalComms database, March 2019.

3. MVNOs continue to focus on niches in the market

18. To create the desired effect of “competitive retail options in Canada,” MVNOs cannot be

niche players. Niche MVNOs target niche portions of the general mobile wireless

population and thus do not offer a fully competitive retail option. Yet, as shown in Table 5

and Table 6, 88 percent of all MVNOs and 87 percent of IO MVNOs in the OECD countries

pursue niche strategies.14

13 Total MVNOs may not equal the sum of independent and owned MVNOs because the total includes those whose ownership is unknown. 14 Based on categories designated by TeleGeography. The count treats MVNOs categorized as All, Other, or without designation as non-niche. NERA Economic Consulting 9

Table 5: Non-Niche MVNOs vs. Niche MVNOs OECD 2018

Source: TeleGeography, GlobalComms database, March 2019.

Table 6: IO Non-Niche MVNOs vs. IO Niche MVNOs OECD 2018

Source: TeleGeography, GlobalComms database, March 2019.

NERA Economic Consulting 10

19. Considering the 5.3 percent average IO MVNO subscriber share shown in Table 2, this

implies a subscriber share of IO MVNOs that attempt to compete with MNOs of less than

1 percent.

20. The high level of niche MVNOs also explains their limited overall market success. Market

saturation and the MNOs’ increasing marketing sophistication (i.e., via OO MVNOs and

targeted promotions) has made it increasingly challenging for IO MVNOs to identify

niches and add value to the customer experience, particularly as these niches are also

addressed by OO MVNOs.

21. As summarized in column (2) of Table 7, the most recent data indicate that the remaining

consumer niches for IO MVNOs include the following types.

. Budget MVNOs offering customers cheap, no frills mobile wireless plans. An example of a budget MVNO is FreedomPop, which operates in the United States on Sprint’s network.

. MVNOs offering bundled plans to attract subscribers by bundling wireless services with other related services they already offer. An example of a bundled MVNO is Comcast’s Xfinity, which operates on Verizon and bundles its offering with its fixed broadband and video services. Another example is Sky UK operating on O2 UK.

. MVNOs tailoring their retail plans to suit small and medium-size enterprises (SMEs). An example of a business MVNO is French MVNO Legos, which operates on both the SFR and Orange networks.

. MVNOs offering international calling that aim at immigrant communities seeking to call relatives in their previous home country. An example of an international-calling MVNO is PhoneBox, which targets students and international visitors in Canada and operates on the Rogers network. Lycamobile, which operates in several countries and offers plans with large amounts of international minutes and SMS, is another example.

. An MVNO exclusively offering data, which includes hotspot, tablet, and cell phone plans. An example of a data MVNO is Cansel Connect, a Canadian MVNO that uses Rogers’ network. Another example is BigSIM, which operates on both the Vodafone and Telefonica networks in Germany.

NERA Economic Consulting 11

. Lifestyle MVNOs that tailor their retail plans to suit the lifestyle and habits of select consumer groups. An example of a lifestyle MVNO is Armed Forces Mobile, an American nonprofit that donates a portion of its proceeds to support veterans.

Table 7: Niche IO and OO MVNOs in OECD Countries

Number of Number of Category IO MVNOs OO MVNOs

(1) (2) (3)

Niche Business 64 7 Budget 177 70 Bundled 67 8 Data 31 2 Device 1 0 Ethnic 18 5 Family 6 0 Financial 1 0 International 44 10 Lifestyle 26 5 M2M 6 0 Premium 12 0 Youth 12 15 Total Niche 465 122

Non-Niche All 46 8 Other 18 2 None Listed 6 2 Total Non-Niche 70 12

Total 535 134 % Niche 87 % 91 %

Source: TeleGeography, GlobalComms database, March 2019.

NERA Economic Consulting 12

22. Canada’s MVNO experience largely mirrors that of the OECD countries. As shown in

Table 8, of the known Canadian IO MVNOs, 7 of the 14 (or 50 percent) focus on budget

conscious customers.15 This compares to 38 percent in the OECD countries.16

Table 8: Canadian MVNOs – December 2018 Launch Current MVNO Year Host Ownership Target Market

PC Mobile 2005 BCE Independent Budget Lucky Mobile 2017 BCE MNO-owned Budget Cityfone 2002 Rogers MNO-owned Budget Primus Canada 2004 Rogers Independent Budget 7-Eleven SpeakOut 2005 Rogers Independent Budget Petro-Canada Mobility 2006 Rogers Independent Budget Chatr Wireless 2010 Rogers MNO-owned Budget good2GO Mobile Unknown Rogers Independent Budget Simply Connect Unknown Rogers Independent Budget ZoomerWireless Unknown Rogers Independent Budget Koodo Mobile 2008 TELUS MNO-owned Budget Public Mobile 2013 TELUS MNO-owned Budget Fizz 2018 Videotron MNO-owned Budget DCI Wireless Unknown Rogers Independent Business Cansel Connect Unknown Rogers Independent Data PhoneBox 2011 Rogers Independent International iRoam Unknown Rogers Independent International OnStar Before 2000 BCE Independent M2M KORE Wireless Canada 2004 Rogers Independent M2M Virgin Mobile Canada 2005 BCE MNO-owned Youth Fido 2004 Rogers MNO-owned Youth dot.mobile 2020 Independent Other

Note: Sears Connect is no longer active. Source: TeleGeography, GlobalComms database, March 2019; Jeanne Wright, “Onstar From GM: It’s Only Human,” Los Angeles Times, July 5, 2000 (OnStar date); Shruty Shekar, “Dotmobile aims to be the next Canadian MVNO to offer affordable wireless services,” Mobilesyrup, March 7, 2019 (dot.mobile date); Emily Jackson, “Quebecor testing new low-cost wireless brand named Fizz,” Financial Post, September 13, 2018 (Fizz ownership).

23. Considering all the facts, the evidence reveals that a typical “MVNO market” consists of

15 IO MVNOs with a total market share of approximately 5.3 percent. Of these MVNOs,

15 Note that MVNO counts may vary by whether MVNOs without known start dates are included. 16 177/465 = 0.381. NERA Economic Consulting 13

approximately two compete with the MNOs, gaining less than 1 percent of the subscriber

market. The remaining 13 focus on niche markets, most commonly budget-conscious

consumers. The Canadian experience is no exception to the international experience. This

implies that an “MVNO market” is not sustainable because it fails to attract a sufficiently

large subscriber base, especially for IO MVNOs. The MVNOs’ predominate niche-market

strategy means that their small market share does not arise from competition with MNOs

but from finding subscribers that MNOs either do not serve or did not adequately serve.

B. The Empirical Evidence Demonstrates No Retail Effects

24. The evidence presented above yields the reasonable conclusion that MVNOs do not

provide substantial competitive retail options as by far most MVNOs focus on niche

categories; however, the introduction of additional regulation most likely would put

upward pressure on prices. Thus, creating a regulated MVNO wholesale market promises

few measurable benefits to Canadian consumers. Notwithstanding this deductive

conclusion, this section aims to rule out any doubt by empirically examining whether the

size of the “MVNO market” is correlated with consumers benefits, including faster

download speeds, greater 4G take-up rates, ARPU, better per-capita data usage, higher

churn rates, and more spectrum capacity utilization. The answer to all these questions is

that MVNO subscriber shares are not correlated with any of these metrics, refuting the

CRTC’s expectation of consumer benefits.

25. Figure 1 examines the correlation between wireless ARPU and MVNO subscriber shares

in OECD countries. If MVNOs had an impact on competition, then the ARPU would

change with an increasing MVNO share of the market. For instance, if MVNOs were to

offer competitive retail options, as anticipated by the CRTC, one would expect the ARPU

NERA Economic Consulting 14

to decrease, holding everything else constant. Alternatively, if one were to expect MVNOs

to introduce better service options (e.g., better download speeds), ARPU might increase.

26. Fitting a (regression) line through the data indicates that there is no relationship between

the weighted blended ARPU and total MVNO subscriber count in the OECD countries.17

The lack of a correlation between the ARPU and the MVNO share of the market reveals

that MVNOs have no impact on the ARPU.

Figure 1: Correlation Values – ARPU and Total “MVNO Market” Share

$60

$50 y=18.47+30.58x r-squared=0.096 p-value=0.172 $40

$30

$20 Weighted Blended ARPU (US dollars) (US ARPUWeighted Blended

$10

$0 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

MVNO Share (percent)

Source: TeleGeography, GlobalComms database, March 2019.

27. Specifically, the p-value of the slope of the trendline in Figure 1 is 0.172. The p-value

measures the strength of the correlation between ARPU and MVNO. In statistics, a

probability of more than 5 percent, or a p-value of greater than 0.05, is typically

17 ARPU is calculated as the weighted average of prepay and post-pay revenues and users. NERA Economic Consulting 15

insufficiently robust to draw a valid conclusion. Thus, relationships with a p-value of more

than 0.05, such as the relationship between ARPU and MVNO share of the market,

economists deem statistically insignificant and consider the two variables uncorrelated. As

shown in Figure 2, not surprisingly, there is also no correlation between ARPU and IO

MVNOs.

Figure 2: Correlation Values – ARPU and IO “MVNO Market” Share

$45

$40

$35 y=23.55-9.295x r-squared=0.002 p-value=0.827 $30

$25

$20

$15 Weighted Blended ARPU (US dollars) (US ARPUWeighted Blended

$10

$0 0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

IO MVNO Share (percent)

Source: TeleGeography, GlobalComms Database, March 2019.

28. I further examined whether MVNOs contribute to competition with non-revenue metrics.

In Figure 3 and Figure 4 I summarize the results of the correlation analyses between

wireless download speeds as measured by Ookla and total IO MVNOs. With a p-value of

0.837 and 0.923 for total and IO MVNOs, respectively, there is strong evidence that a

larger MVNO subscriber share does not drive MNOs to invest in infrastructure that, in turn,

NERA Economic Consulting 16

would increase download speeds. This result is not entirely surprising as MVNOs are not

facilities based, thus they cannot offer competitively differentiated retail services with

respect to download speeds.

Figure 3: Correlation Values – Download Speed and Total “MVNO Market” Share

60 y=36.98+3.140x r-squared=0.001 p-value=0.837

Wireless Download Speed (mbps) Speed WirelessDownload 20

0 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% MVNO Share (percent)

Source: TeleGeography, GlobalComms Database, March 2019; Ookla Speedtest Global Index, June 2018.

NERA Economic Consulting 17

Figure 4: Correlation Values – Download Speed and IO “MVNO Market” Share

60 y=37.65-5.016x r-squared=0.0003 p-value=0.923 50

30 Wireless Download Speed (mbps) Speed WirelessDownload 20

0 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% IO MVNO Share (percent)

Source: TeleGeography, GlobalComms Database, March 2019; Ookla Speedtest Global Index, June 2018.

29. As summarized in Table 5 and Table 6, a larger MVNO share of the market also does not

indicate higher churn rates, which one would expect if MVNOs were to contribute

meaningfully to competition.

NERA Economic Consulting 18

Figure 5: Correlation Values – Churn Rates and Total “MVNO Market” Share

3.5%

3.0% y=.022-.013x r-squared=0.060 p-value=0.113 2.5%

2.0%

1.5%

Weighted Blended Churn Rate(percent) Churn WeightedBlended 1.0%

0.5%

0.0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

MVNO Share (percent)

Source: TeleGeography, GlobalComms Database, March 2019.

Figure 6: Correlation Values – Churn Rates and IO “MVNO Market” Share

60 y=37.65-5.016x r-squared=0.0003 p-value=0.923 50

30 Wireless Download Speed (mbps) Speed WirelessDownload 20

0 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% IO MVNO Share (percent) Source: TeleGeography, GlobalComms Database, March 2019.

NERA Economic Consulting 19

30. The size of the MVNO share of the market is also uncorrelated with data usage per GB for

total MVNOs and IO MVNOs, indicating that consumption patterns are independent of

overall and IO MVNO activity. Figure 7 contains the results of this correlation analysis for

all MVNOs and Figure 8 for IO MVNOs only.

Figure 7: Correlation Values – Data Usage and Total “MVNO Market” Share

12 y=4.568-3.365x r-squared=0.014 p-value=0.541 10

GB per Subscriber per Monthper Subscriber perGB 6

0 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

MVNO Share (percent)

Source: TeleGeography, GlobalComms Database, March 2019; OECD, June 2018.

NERA Economic Consulting 20

Figure 8: Correlation Values – Data Usage and IO “MVNO Market” Share

10 y=4.234-11.34x r-squared=0.040 p-value=0.269 8

6 GB per Subscriber per Monthper Subscriber per GB 4

0 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% IO MVNO Share (percent)

Source: TeleGeography, GlobalComms Database, March 2019; OECD, June 2018.

31. MVNOs also do not entice MNOs to accelerate the deployment and more specifically the

consumer take-up for 4G LTE, as shown by the p-value of 0.112 in Figure 9. Interestingly,

the already statistically insignificant strength of this relationship becomes even more

insignificant when considering IO MVNOs only. With a p-value of 0.838, there is little

doubt that MVNOs do not contribute to consumers’ take-up rate of 4G LTE.

NERA Economic Consulting 21

Figure 9: Correlation Values – 4G Take-Up Rate and Total “MVNO Market” Share

90.0%

80.0% y=.407+.625x r-squared=0.149 p-value=0.112 70.0%

60.0%

50.0% Up Rate(percent) Up - 40.0%

4G Take 4G 30.0%

20.0%

10.0%

0.0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

MVNO Share (percent) Source: TeleGeography, GlobalComms Database, March 2019.

Figure 10: Correlation Values – 4G Take-Up Rate and IO “MVNO Market” Share

90.0%

80.0% y=.506-.166x r-squared=0.001 p-value=0.838 70.0%

60.0%

50.0% Up Rate(percent) Up

- 40.0%

4G Take 4G 30.0%

20.0%

10.0%

0.0% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

IO MVNO Share (percent) Source: TeleGeography, GlobalComms Database, March 2019.

NERA Economic Consulting 22

32. There is also no empirical evidence suggesting that a larger MVNO share of the market

yields higher spectrum utilization percentages. As summarized in Figure 11 and Figure 12,

the p-values of 0.741 for all MVNOs and 0.143 for IO MVNOs are both statistically

insignificant.

Figure 11: Correlation Values – Capacity Utilization and Total “MVNO Market” Share

35.0%

30.0% y=.152-.055x r-squared=0.005 p-value=0.741

25.0%

20.0%

15.0% Capacity Utilization (percent) Utilization Capacity 10.0%

5.0%

0.0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

MVNO Share (percent)

Source: TeleGeography, GlobalComms Database, March 2019; Rewheel/research, 2017

NERA Economic Consulting 23

Figure 12: Correlation Values – Capacity Utilization and IO “MVNO Market” Share

35.0%

30.0%

25.0% y=.179-.635x r-squared=0.087 p-value=0.143

20.0%

15.0% Capacity Utilization (percent) Utilization Capacity 10.0%

5.0%

0.0% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

MVNO Share (percent)

Source: TeleGeography, GlobalComms Database, March 2019; Rewheel/research, 2017.

33. Finally, the creation of an “MVNO market” also does not yield more MNOs that, in turn,

could provide competitive retail options to consumers. No known IO MVNOs have yet

climbed the ladder of investment and transitioned from an MVNO to an MNO.18 Therefore,

this finding means that there are extremely limited, and likely no, potential long-term

consumer upsides from a sustainable retail “MVNO market.” These companies’ business

plans do not include any material network investments. Rather, they count on indefinitely

obtaining wholesale access which allows to benefit from network improvements, as will

be the case in the transition from 4G to 5G, while investing very little.

18 Drillisch in Germany recently announced that it intends to acquire spectrum in the country’s 5G (2 and 3.5 GHz) auction. However, it is too early to tell if, how, and when Drillisch will deploy this spectrum under its own brand name. (1&1 Drillisch confirms plans to participate in 5G auction, TeleGeography, January 25, 2019.) NERA Economic Consulting 24

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Regulators Continue to Refrain From Regulating for Wholesale Mobile Services MVNO Access

34. Thus, no matter how one analyzes the CRTC’s anticipated consumer benefits from

MVNOs, the finding is that it is insignificant. MVNOs offer no change in ARPU or quality

improvements, and they do not intend to convert to an MNO. As I highlighted in my 2014

report, “the MVNO business model is to focus on underserved segments – not to compete

with the MNOs.”19 This remains true today.

35. This view is confirmed by the European Commission’s analysis of the recent MNO merger

in the Netherlands that concluded:

The Commission, based on the results of the Market Investigation and the analysis of the internal documents of the Parties, does not consider that MVNOs are able to exercise the same degree of competitive pressure that is exercised by MNOs. The Commission therefore considers that MVNOs are unable to meaningfully constrain the competitive behaviour of MNOs on the market for retail mobile telecommunication services.20

III. REGULATORS CONTINUE TO REFRAIN FROM REGULATING MVNO ACCESS

36. This section reviews the international experience in regulating wholesale MVNO access.

It reveals that the CRTC’s view, albeit preliminary, of implementing such regulation is the

rare exception. It also demonstrates that the few countries opting to implement MVNO

access regulation fared no better than those that continued to rely on commercial

negotiations between MNOs and MVNOs.

1. Regulators do not endorse MVNO wholesale access regulation

37. My 2014 report on MVNOs explained, “[R]egulators typically do not take MVNOs into

account” and “only a few countries exist where regulators have intervened in this [the

19 2014 MVNO Report, ¶ 64, 20 European Commission, DG Investigation, Commission Decision of 27.11.2018 declaring a concentration to be compatible with the internal market and the functioning of the EEA Agreement (Case M.8792 - T-Mobile NL/Tele2 NL) provisional, ¶ 589.

NERA Economic Consulting 25

MNO-MVNO] relationship.” 21 The international regulators’ view on MVNOs remains

unchanged today. As shown in Table 9, the most recent (2018) data for the 36 OECD

countries shows that only three countries (8 percent) regulate the MNO-MVNO

relationship (albeit all differently).

Table 9: MVNO Access Regulation in OECD Countries and IO MVNO Share

IO MVNO IO MVNO Country Mandatory Access Share Country Mandatory Access Share (1) (2) (3) (1) (2) (3)

Chile Yes 1.9% Greece No n/a Czech Republic Yes 6.7% Hungary No 1.0% Japan Yes 2.9% New Zealand No 0.4% Turkey SMP - One Carrier (Expires in April 2019) n/a Slovakia No 0.0% Slovenia SMP - One Carrier 2.7% Estonia No n/a Norway SMP - One Carrier 6.3% Luxembourg No n/a South Korea SMP - One Carrier 4.4% Latvia No 0.0% Ireland Conditional - Merger & Spectrum Auction 1.6% Australia No 6.6% Austria Conditional - Merger 8.3% Belgium No 11.6% Germany Conditional - Merger 23.7% Italy No 10.7% Poland Conditional - Spectrum Auction 1.2% Sweden No 0.9% France Conditional - Spectrum Auction 9.5% United States No 9.8% Israel Regulatory Backstop 2.9% Spain No 6.8% Finland No n/a United Kingdom No 8.0% Mexico No 1.1% Netherlands No 9.1% Iceland No 2.0% Switzerland No 8.5% Lithuania No n/a Canada No n/a Portugal No 2.2% Denmark No 1.8%

Source: TeleGeography, GlobalComms database, March-May 2019; Ian Streule, Janette Stewart and Audrey Bellis, Final report for Trustpower “MVNO aspects of the Commission’s mobile market review,” Analysys Mason, Oct. 25, 2018; Danish Business Authority; Comisión Nacional de los Mercados y la Competencia.

38. Before I discuss some of the individual countries, it is important to note that there is no

relationship between regulatory models and the performance of MVNOs because every

regulatory category exhibits a range of low to high subscriber shares. The three countries

that seem to require mandatory access are Chile, the Czech Republic, and Japan. Twenty-

four others, or two-thirds of all OECD countries, do not regulate MVNO access at all. 22

21 Ibid., ¶¶ 34, 98. 22 This count includes Turkey, where the one service provider with an MVNO mandate will lose that status in April 2019. NERA Economic Consulting 26

Interestingly, Spain, which was one of the rare exceptions of MVNO-related regulation in

2014, has decided to forbear from intervening in the MNO-MVNO relationship.

39. The remaining nine countries exhibit a limited MVNO mandate. In Ireland, Austria, and

Germany, MVNO regulation was part of a merger remedy and only applied to the merged

parties. As I explain below, these “merger MVNOs” are not relevant in the present matter.

In Poland, France, and Ireland (which is also subject to an MVNO merger remedy), MVNO

access is part of selected spectrum licenses.23 This type of regulation is also not relevant in

the present context. Unlike the intervention envisioned by the CRTC, requiring MVNO

access as part of a spectrum license auction allows bidders to adjust their maximum

willingness to pay accordingly. Moreover, Canada already has spectrum set-asides and

adding an MVNO mandate to the licenses of the three incumbent national carriers would

further distort the competitive outcome of the auctions. Finally, in Slovenia, Norway, and

South Korea, MVNO regulation only applies to a single carrier, the previous monopoly

carriers, with individual (rather than collective) significant market power (SMP). This

situation also does not apply to Canada because the CRTC has not found any individual

MNO to possess SMP (although it did find the presence of collective SMP).24

40. I note that in addition to the discontinuation of MVNO wholesale regulation in Turkey and

Spain, Israel explicitly ruled against regulatory intervention with respect to MVNOs.

Instead, the Israeli Ministry of Communications (MOC) relies on commercial negotiations

and only intervenes if (a) negotiations are unsuccessful, (b) one or both parties file a

23 In Poland, it applied to the 900 MHz auctioned in 2008 and only to P4 and Aero2. In France, one of the auction conditions for the remaining 2100 MHz spectrum was to improve the access conditions for MVNOs. SFR and Orange won blocks in the 2010 auction. In Ireland’s 2002 auction for 900 MHz, the winner of the sole class A concession would receive additional spectrum but was required to allow MVNOs to operate over the frequencies. (TeleGeography, GlobalComms, Poland, France, Ireland, accessed March 14, 2019.) 24 Notice, ¶ 11. NERA Economic Consulting 27

complaint with the MOC, and (c) the regulator finds, after a thorough review, that market

forces are to blame for the failed negotiations. The MOC implemented this regime in 2009

on my recommendation. Currently, Israel is home to three MVNOs (Cellact

Communication, Rami Levy Communications, and Telzar 019). The MNOs Cellcom and

Pelephone acquired what were the fourth and fifth MVNOs (Home Cellular and

YouPhone) in 2015, both of which no longer function separately.25 I am unaware of any

instances in which the MOC received a request to review a failed negotiation.

41. Furthermore, the countries in the European Union generally do not regulate wholesale

access to mobile networks and have not done so since 2007. As explained by the European

Commission, “EU telecoms rules have paved the way for effective competition in many of

the 18 [product] markets that were predefined as susceptible to ex ante regulation in the

2003 Recommendation on relevant markets. In November 2007, the Commission therefore

removed 10 markets from the list and merged two of the remaining markets.” 26 As

summarized by the Belgian regulator, BIPT:

The European telecom framework does not allow direct regulation of the end-user market for mobile telephony. In this market, it is assumed that operators do not have significant market power and that commercial access is possible through MVNO contracts. Furthermore, the European Commission is of the opinion that problems must be solved through competition law. … BIPT could obligate operators with a mobile network to offer access on their network to other operators. Through such regulation on the wholesale market for mobile telephony, other operators can become active on the end-user market. … However, this option is not very realistic. The market for mobile access is no longer among the markets on the European Commission's recommendation list. In addition, almost no other Member State regulates mobile access. …. Demonstrating the existence of market participants with significant market power in this market (individual or collective) is difficult in a market with at least three parties. Such an

25 TeleGeography, GlobalComms Database, Israel, p. 28 (accessed March 14, 2019). 26 EU press release, “Telecoms: the ‘Article 7’ procedure and the role of the Commission – Frequently Asked Questions,” MEMO/08/620, October 15, 2008; EU, “Commission acts to reduce telecoms regulation by 50% to focus on broadband competition,” IP/07/1678, November 13, 2007. NERA Economic Consulting 28

access obligation imposed after a market analysis would therefore be difficult to accept for the European Commission, which has a veto on such market analyses. Moreover, the existence of MVNO contracts, shows market entry is possible on a commercial basis. BIPT therefore considers this [regulatory] option unrealistic.27

42. BIPT opines that it is difficult to find individual or collective SMP in markets with three

MNOs and reiterates the EC’s opinion that competition law suffices to ensure wholesale

MVNO access. Interestingly, the Belgian regulator specifically found that the EC

discourages implementing MVNO wholesale access regulation and might veto it if

implemented nevertheless. Extending this reading of EC competition policy to Canada and

recognizing that the Canadian mobile wireless market is home to three nationwide

providers and several regional providers, this would mean that the EC would disagree with

the CRTC’s preliminary view of regulating wholesale MVNO access.

2. Regulated MVNO regimes refrained from wholesale access

43. The rare exceptions of regulated wholesale MVNO access are far less intrusive than the

wholesale MVNO access envisioned by the CRTC and show that even regulated MVNO

regimes do not yield a sustainable “MVNO market” that offers “competitive retail options.”

44. In the case of Chile, MVNO regulation was imposed after the Chilean Supreme Court ruled

that the country’s four MNOs (Movistar Chile owned by Telefonica, Entel Chile, Claro

Chile, and WOM) had created a barrier to MVNO entry by refusing to negotiate with them.

Rather than mandating wholesale MVNO access, however, the court “ordered [the MNOs]

to submit a plan to offer access to MVNOs and to respond to requests from companies

27 Belgisch Instituut voor postdiensten en telecommunicatie, “Impactstudie van 26 juni 2018 betreffende een vierde mobiele netwerkoperator op de Belgische mobiele markt,” ¶¶ 159–162 (footnote omitted, translation by NERA).

NERA Economic Consulting 29

wishing to access their networks.”28 A more detailed set of regulations was introduced in

June 2015 by the regulator (Subtel) setting forth “the rights and obligations of both parties,

as well as systems for conflict resolution.”29 Subtel also refrained from mandated wholesale

MVNO access but instead requested nondiscriminatory commercial negotiations. A recent

Chilean court decision found this type of hands-off regulation to be effective. Specifically,

in a complaint to the court alleging that the MNOs continued to discriminate against

MVNOs, the court found that the complainants had been offered access and that “wholesale

access granted to MVNOs did allow entry to the market by efficient competitors.”30 Since

2012, four MVNOs have entered the market with a combined subscriber share of merely

1.9 percent.31

45. In the Czech Republic, motivated by its 2012 review of wholesale access that found

wholesale prices “varied considerably depending on the nature (i.e., type) of each

MVNO,”32 the Czech regulator (CTU) ordered modifications of the wholesale contracts,

particularly as they pertained to the 4G networks of the country’s three MNOs (T-Mobile

Czech Republic, O2 Czech Republic, and Vodafone Czech Republic). LTE spectrum had

as “a condition of the licence awards included assurances from operators that wholesale

prices for LTE services to virtual operators or third-party operators leasing capacity and

data spectrum would be set at a level to allow them to operate profitably.”33 In 2015, to

reduce the MNO markups, the CTU ordered prices to be set “based on the assessment

28 TeleGeography, GlobalComms Database, Chile, p. 10 (accessed March 14, 2019). 29 Ibid. 30 OECD, Directorate for Financial and Enterprise Affairs, Competition Committee, “Annual Report on Competition Policy Developments in Chile – 2016,” DAF/COMP/AR(2017)28, ¶¶ 15–16.) 31 During that period an additional four MVNOs entered and exited the market. 32 TeleGeography, GlobalComms Database, Czech Republic, p. 12 (accessed March 14, 2019) 33 Ibid., p. 11 (accessed March 14, 2019).

NERA Economic Consulting 30

whether the difference between the wholesale and retail prices (mark-up) of the MNO

services is sufficient to cover the retail costs of the MNOs.”34 In 2016, after a second round

of investigation, the CTU reduced wholesale access prices to incorporate changes in retail

revenues and costs.35 The price decrease mandate was set for 2017.36 Although robust

MVNO counts do not exist, it appears that the number of MVNOs increased from

approximately 70 MVNOs as of December 2015 to 84 MVNOs in January 2019. However,

the combined MVNO share of the market remained low and almost unchanged, increasing

slightly from 9 percent in December 2015 to 9.4 percent in January 2019.37

46. The objective of MVNO regulation in Japan was to “help would be entrants negotiate the

use of the infrastructure operated by the three incumbents.”38 Again, the regulator elected

not to rely on wholesale MVNO access regulation. Instead, the Japanese regulator (MIAC)

mandated that MNOs engage in commercial negotiations with MVNOs. If the participants

cannot reach a wholesale access agreement, “MIAC may grant an award.”39 MIAC revised

its method of calculating wholesale access charges in 2016 for “budget smartphone

operators” to “lower communications charges in in the domestic market.”40 In December

2008, MVNOs had a 1.4 percent share of subscribers. By December 2016, this share had

reached 9.2 percent, and currently MVNOs have around an 11.8 percent share.

47. The international experience in Chile, the Czech Republic, and Japan is informative for the

present consultation for several reasons. First, the motivation for MVNO regulation differs

34 Czech Telecommunication Office, Annual Report 2016, p. 46. 35 Ibid., pp. 46-47. 36 TeleGeography, GlobalComms Database, Czech Republic, pp. 11–12 (accessed March 14, 2019). 37 Ibid, p. 37. 38 The incumbents include NTT DOCOMO, KDDI, and Softbank Mobile. (TeleGeography, GlobalComms Database, Japan, p. 10 (accessed March 14, 2019).) 39 Hiromi Hayshi and Akira Marumo, “Japan,” International Comparative Legal Guide to: Telecoms, Media & Internet Law & Regulations 2018, 11th ed. (Global Legal Group, Nov. 13, 2017), items 2.9, 2.14. 40 TeleGeography, GlobalComms Database, Japan, pp. 10, 13 (accessed March 14, 2019). NERA Economic Consulting 31

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework MVNO Merger Remedies Are Not relevant and for Wholesale Mobile Services Confirm the Lack of MVNO Competitive Impact

in each of the three countries with no country having any concerns about the failure to

develop “a sustainable retail MVNO market.” Instead, the three regulators aimed at

facilitating the MNO-MVNO relationship and addressed only specific failures to negotiate

honestly and fairly. As I will explain in Chapter V, this is different from Canadian

circumstances where there is no evidence of wholesale market failure, and there are already

several regulatory wholesale measures in place. Second, and most important, even with an

alleged finding of market failure, the three regulators refrained from mandating wholesale

MVNO access regulation. Instead, all three regulators continued to rely on commercial

negotiations, albeit with varying different regulatory measures. Thus, if the CRTC were to

implement MVNO wholesale access regulation, it would be the only country with such an

intrusive regulatory regime, especially given the existence of wholesale regulation for the

provision of roaming.41

IV. MVNO MERGER REMEDIES ARE NOT RELEVANT AND CONFIRM THE LACK OF MVNO COMPETITIVE IMPACT

48. Although there has been no shift since 2014 in the perception of MVNOs as niche players

with no competitive impact, the European Commission used MVNOs in three European

market consolidations as part of merger remedies. As this section explains, these merger

MVNOs are not relevant to the CRTC’s consultation and its preliminary view to mandate

wholesale access for MVNOs. Furthermore, and notwithstanding, these remedies confirm,

41 I am aware that Australia recently considered and New Zealand is currently considering MVNO wholesale access regulation. Australia did not implement wholesale access regulation, and no decision has been reached in New Zealand as of the time of writing this report. (Australian Competition & Consumer Commission, Communications Sector Market Study, Final Report, April 2018; Commerce Commission New Zealand, Study of mobile telecommunications markets in New Zealand, Issues Paper, August 31, 2018.) NERA Economic Consulting 32

once more, that MVNOs are not competition enhancing and promise no material consumer

benefits.

A. Merger Remedies Mandating MVNOs Are Irrelevant for the Current Review

49. European mobile wireless markets have been subject to several consolidations, particularly

instances where two of the four MNOs merged. These so-called 4-to-3 mergers have taken

place in recent years in Austria (Hutchison 3G and Orange in 2012), Ireland (Hutchison

3G UK and Telefonica Ireland in 2014), Germany (Telefonica Deutschland and E-Plus in

2014), Italy (Hutchison 3G Italy and WIND in 2016), and the Netherlands (T-Mobile NL

and Tele-2 NL in 2018). Whereas the EC approved the merger in the Netherlands with no

remedies, it imposed specific merger remedies in Austria, Ireland, Germany, and Italy. As

summarized in Table 10, the remedies fall into two general categories – MNO Components

and MVNO Components.

NERA Economic Consulting 33

Table 10: EC Remedy Components in 4-to-3 Mergers

50. The MNO component required the merged parties to encourage facilities-based entry, most

commonly through divesting some spectrum. The MNO components applied to all four

countries with remedies. Additionally, in Austria, Ireland, and Germany, the EC also

required an MVNO component, mandating the merged parties to commit network capacity

to MVNOs.

51. Although the EC’s MVNO components had a goal of helping to mitigate the risk of higher

retail prices in the post-merger market, this does not imply that MVNOs serve as an

effective regulatory tool or that the EC endorses MVNOs as such. There are several reasons

why the merger MVNOs in Austria, Ireland, and Germany are irrelevant for the present

consideration. First, the EC applied the MVNO remedies exclusively in 4-to-3 merger

settings. The present matter is not a merger setting but one where “the Commission has

twice had to intervene in the mobile wireless services market to address disputes between

NERA Economic Consulting 34

a carrier and a potential MVNO” and where “a sustainable MVNO market has failed to

develop on its own.”42 Second, Canada’s market structure is very different from those in

the countries with the 4-to-3 mergers. Canada is home to three nationwide MNOs plus

several regional MNOs. There are four MNOs in each province. Third, the regulators

applied the MVNO remedies to the merged entity only, whereas the regulations envisioned

by the CRTC will apply to all MNOs. Fourth, the MVNO remedy was a limited part of a

larger set of merger specific remedies, thus the regulators were merely attempting to

somewhat improve competitive conditions.

52. In addition, and notwithstanding the irrelevancy of the European merger MVNO

experiences, the merger remedies had a limited impact in Austria, likely no impact in

Germany, and clearly no impact in Ireland.

1. Austria

53. At first glance, the Austrian MVNO remedy gives a false impression that it might have

been effective. As of December 2018, about 36 OO and IO MVNOs had a 25.5 percent

share of the market compared to about 15 MVNOs with a combined share of the market of

13.6 percent prior to the merger.43 However, a closer look at these numbers reveals that OO

MVNOs bob and yesss! served approximately 53 percent of the 25.5 percent MVNO share

of the market, which is 13.5 percent of the Austrian mobile wireless market.44 This implies

that the remaining 34 MVNOs (which include OO and IO MVNOs) hold a combined share

of the market of approximately 12 percent. In this group is IO MVNO HoT Telekom that

serves 6.6 percent of Austrian mobile wireless subscribers.45 This, in turn, implies that the

42 Notice, ¶ 38. 43 TeleGeography, GlobalComms Wireless Company Database, Austria. 44 Ibid. 45 Ibid.; see also TeleGeography, GlobalComms Wireless Country Database, Austria. NERA Economic Consulting 35

remaining 33 MVNOs serve 5.4 percent of the Austrian market, yielding an average

subscriber share of far less than 1 percent. Thus, the merger remedy had a rather limited

impact as it managed to create merely one IO MVNO (HoT Telekom) with a share of the

market comparable to that of the two OO MVNOs (bob and yesss!). It is highly doubtful

that an increase in the count of MVNOs (which undoubtedly occurred) and the presence of

one moderately successful IO MVNO (HoT Telekom) is adequate to discipline prices in

Austria. Furthermore, HoT Telekom focuses only the prepaid plans niche, whereas 64

percent of Austrian subscribers purchase postpaid plans.46

2. Ireland

54. The MVNO remedies in Ireland had an even more limited impact on the market. No

MVNO entry occurred until almost two years after the merger when iD Mobile entered the

market. Hosted on Three Ireland’s network, iD Mobile launched its services in October

2015 with the intent of capturing 5 to 6 percent of the market within five years.47 Per the

Body of European Regulators for Electronic Communications (BEREC), as of the third

quarter of 2017, the MVNO succeeded in attracting a subscriber share of only 0.7 percent.48

In fact, having suffered a loss of GBP 10 million in its 2017 fiscal year (ending April 2017),

the MVNO “has been put up for sale by Dixons Carphone, its listed British parent group.”49

46 RTR, Telekom Monitor Annual Review, 2016, p. 20. 47 See Mark Paul, “Dixons Carphone looks to offload ID Mobile in Ireland,” The Irish Times, June 29, 2017, https://www.irishtimes.com/business/technology/dixons-carphone-looks-to-offload-id-mobile-in-ireland-1.3137079; see also TeleGeography Country Profile: Ireland, March 2018, p. 28. 48 See Body of European Regulators for Electronic Communications, “BEREC Report on Post-Merger Market Developments – Price Effects of Mobile Mergers in Austria, Ireland and Germany,” June 15, 2018, p. 24. 49 Mark Paul, “Dixons Carphone looks to offload ID Mobile in Ireland,” The Irish Times, June 29, 2017, https://www.irishtimes.com/business/technology/dixons-carphone-looks-to-offload-id-mobile-in-ireland-1.3137079.

NERA Economic Consulting 36

Failing to find a buyer for iD Mobile, Dixons Carphone commenced the liquidation of iD

Mobile in March 2018.50

55. The second MVNO to enter the Irish market under the EC remedy plan was Virgin Mobile,

which launched service in October 2015.51 Although still operational, Virgin Mobile is also

struggling. The MVNO grew to a subscriber share of 1.0 percent by the third quarter of

2017 and reached merely 1.6 percent in the fourth quarter of 2018.52 Tellingly, Virgin

Mobile rejected the opportunity to purchase its competitor iD Mobile “due to its low

customer numbers and because favourable terms on Three’s network were set to end

soon.”53

56. Thus, the EC’s MVNO remedy for Ireland caused only two MVNOs to enter the market.

One of these MVNOs has in the meantime exited the market, whereas the sole survivor has

managed to gain merely 1.6 percent of the market.

3. Germany

57. Prior to the merger, Germany was already home to over 100 MVNOs serving 45.7 percent

of subscribers.54 Post-merger, the MVNO count increased to over 120 MVNOs as of March

2018.55 Exact MVNO counts for Germany do not exist; therefore, it is unclear whether the

most recent count reflects a more accurate count or an increase in MVNOs making it

50 “Liquidator appointed to telecoms operator iD Mobile,” The Irish Times, March 6, 2018, https://www.irishtimes.com/business/retail-and-services/liquidator-appointed-to-telecoms-operator-id-mobile- 1.3416823. 51 TeleGeography Country Profile: Ireland, March 2018, p. 28; TeleGeography, “MVNO Monday: a guide to the week’s virtual operator developments,” October 5, 2015. 52 See TeleGeography, GlobalComms Wireless Company Database, Ireland. 53 Adrian Weckler, “Struggling iD Mobile to wind down after losses,” Irish Independent, March 7, 2018, https://www.independent.ie/business/irish/struggling-id-mobile-to-wind-down-after-losses-36678118.html. 54 TeleGeography, GlobalComms Wireless Company Database, Germany; see also TeleGeography Country Profile: Germany, March 2018, pp. 39–48. 55 Ibid.

NERA Economic Consulting 37

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework The 2014 Commission Review Serves as a for Wholesale Mobile Services Proper Starting Point for the Current Review

impossible to establish even a causal link between an increase in MVNOs and the merger

remedy. Similarly, although analysts report that the market share of independent MVNOs

increased by three percentage points from 2014 to 2017, it is unclear whether this increase

represents random market share fluctuations or a statistically significant long-term market

share increase. 56 Thus, the apparent conclusion is that the impact of the MVNO remedy in

Germany was limited at best.

V. THE 2014 COMMISSION REVIEW SERVES AS A PROPER STARTING POINT FOR THE CURRENT REVIEW

58. Sections II through IV document not only the MVNOs’ failure to affect the competitive

outcome but also the international regulators’ continued reliance on commercial

negotiations and their forbearance from intervening in the MNO-MVNO relationship,

similar to the approach adopted by both the CRTC and ISED to date. Although the evidence

clearly indicates that the CRTC’s preliminary view of implementing regulated wholesale

MVNO access is without any basis and stands apart from the approaches in virtually all

other OECD countries, this section examines whether the competitive and regulatory

environment in Canada “effectively supports competition in the retail market.” 57 The

answer to this important question is affirmative because there are not only competitive

forces but also ample regulatory measures. There is also no evidence of retail market

failure.

56 TeleGeography Country Profile: Germany, March 2018, p. 39. 57 Notice, Q6. NERA Economic Consulting 38

A. The CRTC Has Already Addressed MVNO Wholesale Access

59. In its order following the 2014 wholesale mobile wireless review, the CRTC concluded

that although the three incumbent national carriers collectively possessed market power in

both wholesale roaming and wholesale access,58 it would refrain from mandating wholesale

MVNO access.59 The Commission expressed concern that such regulation would affect the

MNOs’ extensive investments in Canadian telecommunications infrastructure.

Specifically, the CRTC found that wholesale MVNO access regulation “would likely

discourage continued investment by wireless carriers, because they could rely on this

access rather than investing in their own mobile wireless network infrastructure.”60 Nothing

has changed that would warrant overriding these concerns. In fact, with the impeding

deployment of 5G networks, infrastructure investment is more important than ever. 5G

technology is “almost a total reimagining of what you can do in a cellular network” and

will require a complete upgrade of all networks in Canada.61 In fact, the CRTC specifically

highlighted the need for 5G investment:

In order to begin introducing 5G technology, wireless carriers will be required to make significant investments in network infrastructure, and to negotiate with a variety of stakeholders to secure adequate access to fibre facilities, rights of way, and small-cell sites.62

60. Similarly, ISED confirmed the economic importance of 5G, stating:

As demand for all things connected increases—from self-driving cars to smart homes—our wireless technology infrastructure needs to keep pace. That’s why we are about to see fifth-generation (5G) wireless technology—

58 See CRTC 2015-177, ¶ 87. 59 Ibid., ¶ 125. 60 Ibid., ¶ 122. 61 Jesse Ferreras, “With 5G, data could reach you in as little as a millisecond, 50 times faster than 4G,” Global News, Jan. 26, 2019, https://globalnews.ca/news/4892059/introducing-5g-wireless-technology-canada. 62 Notice, ¶ 19.

NERA Economic Consulting 39

a leap that will unlock massive innovation potential and create well-paying jobs across Canada.”63

61. Imposing a wholesale MVNO access regime during what is the largest network upgrade to

occur in decades promises to place Canada behind most other countries and deprive rural

areas from competitive alternatives to fixed wireless or satellite broadband services.

62. Furthermore, the CRTC already took specific steps to facilitate MVNO entry. It provided

MVNOs their own mobile network codes (MNCs) that allow “a full MVNO to more easily

switch its host wireless carrier, make arrangements with multiple wireless carriers, and

negotiate its own wholesale roaming arrangements (e.g. with international wireless

carriers).”64

63. Upon WIND’s (currently owned by Shaw and operating as Freedom) statement that

roaming limitations “impeded its ability to support MVNOs on its network,” the

Commission also required the three incumbent national carriers to provide roaming on their

GSM networks to “the subscribers of any MVNOs operating on their wholesale roaming

partners’ networks.”65 This measure widens the wholesale market for MVNOs by enabling

them also to enter into an MVNO access deal with regional providers, including Freedom,

Videotron, Sasktel, and Tbaytel.

64. These measures remain in place today, and there is no reason to believe that the investment

concern that prevented the CRTC from previously mandating regulated wholesale MVNO

access has dissipated. In fact, the investment issues remain as paramount as before, given

the need for commitment from the MNOs to invest in 5G networks. The CRTC has already

63 ISED, “Government of Canada invests in research and development for technologies behind 5G networks,” January 25, 2019 (https://www.newswire.ca/news-releases/government-of-canada-invests-in-research-and- development-for-technologies-behind-5g-networks-824265523.html). 64 CRTC 2015-177, ¶ 161. 65 Ibid., ¶¶ 163, 167. NERA Economic Consulting 40

addressed the concerns raised by the MVNOs, and the current regulatory framework

provides more than adequate regulatory protection for MVNOs.

B. The Relevant Market Remains Very Competitive

65. Moreover, and most important from an economic and regulatory perspective, as Dr.

Crandall explains in detail, the Canadian market for mobile wireless services remains

competitive. 66 Dr. Crandall’s findings confirm those of Dr. Eisenach who in 2014

concluded, “[T]he level of competition in Canadian wireless markets is sufficient to protect

consumer welfare.”67

66. There is widespread agreement among economists and regulators that the process of

competition in effectively competitive retail markets leads to the best outcome for

consumers. Given Drs. Crandall’s and Eisenach’s findings, implementing further

wholesale regulation will not serve the public interest and will stand to harm, not benefit,

Canadian consumers.

C. Wholesale and Retail Markets Have Grown Since 2014

67. There is also ample evidence that wholesale and retail markets have grown since the

CRTC’s 2015 decision, further undermining a need for additional regulatory intervention.

For instance, due to its acquisition by Shaw, one of Canada’s largest ISPs, Freedom now

has access to spectrum in all provinces except Saskatchewan and Manitoba, 68 and it

66 Crandall Report, Executive Summary. 67 Before the Canadian Radio-television and Telecommunications Commission, “Expert Report of Jeffrey Eisenach, PhD, on behalf of TELUS Communications Company,” CRTC 2014-76, May 15, 2014, ¶ 13. 68 As of August 31, 2018, it had 1.9 million consumer Internet subscribers. (Shaw Communications, Management’s Discussion & Analysis, p. 9.) The spectrum in Quebec covers Northern Quebec. (Shaw, Acquisition of WIND, Investor Conference Call, December 17, 2015, slide 14.)

NERA Economic Consulting 41

currently offers service in British Colombia (Greater Vancouver), Alberta (Calgary,

Edmonton), and Ontario (Greater Toronto Area, Ottawa).69 According to Shaw, its wireless

“footprint now covers approximately 16 million people in some of Canada’s largest urban

centres, or almost half of the Canadian population.” In fiscal 2019, it “expect[s] to expand

to an additional population of 1.3 million, primarily in Western Canada.” 70 This

development not only adds to retail competition but also provides additional wholesale

competition.

68. On the retail side, Videotron has recently launched its own sub-brand “Fizz,” and Lucky

Mobile entered the market as a new sub-brand of Bell. A new IO MVNO, dot.mobile, is

planning to launch in 2020.71

D. Existing Wholesale Regulation Already Enables Retail Competition

69. The Canadian mobile wireless market is also one of the most regulated markets in the

world—it has more than enough regulatory measures for wholesale and retail competition.

For instance, the CRTC’s recently implemented regulatory framework for domestic

wholesale roaming is not only unprecedented in the developed world but already addresses

the very problem the CRTC is attempting to resolve with its current review of regulated

wholesale MVNO access. It opened a mandated wholesale access market and permits

facilities-based competitors (other than the three nationwide MNOs) access to the three

nationwide networks on a cost-based and risk-free basis.

69 Other locations include Victoria, Red Deer, Kingston, and Peterborough. (See Freedom, https://www.freedommobile.ca/en/comingsoon, accessed April 4, 2019.) 70 See Shaw, News Release, “Shaw Announces Second Quarter and Year-To-Date Fiscal 2019 Results,” April 9, 2019, p. 9. 71 Shruti Shekar, “Dotmobile aims to be the next Canadian MNVO to offer affordable wireless services,” mobilesyrup.com, March 7, 2019.

NERA Economic Consulting 42

70. The CRTC’s expectations were that this new regulatory regime would yield increased

innovation and investment in addition to sustainable competition that would provide

benefits, such as reasonable prices. 72 Thus, as detailed below, the CRTC already has

implemented the regulatory measures it allegedly needs to ensure “sustainable

competition” and “reasonable prices.” There is no reason to believe that the mandated

opening of yet another wholesale market that provides access to non-facilities-based

providers will bear any consumer benefits. The evidence clearly demonstrates that MVNOs

are predominately niche players. Thus, wholesale MVNO access will have no positive

effect on downstream retail markets, but rather is likely to have negative effects.

71. Regulatory measures in the form of spectrum set-asides and spectrum caps are also in place

at the licensing level. These measures allegedly ensure that smaller providers (those with

less than 10 percent nationwide market share) gain access to spectrum, which, in turn, is

supposed to induce competitive entry, increase wholesale competition (thereby also

benefiting MVNOs), and enhance retail competition to the benefit of Canadian consumers.

72. ISED first implemented set-asides in its 2008 Advanced Wireless Services (AWS) auction

with the effect of significantly increasing the prices of the non-set-aside licenses and

providing the winners of set-aside licenses a significant windfall. 73 Using spectrum

acquired from the set-asides, WIND launched in 2009 with Mobilicity, Public Mobile, and

Videotron following in 2010.74 Shaw has since acquired WIND, and it now operates under

the brand name Freedom. Further, Rogers acquired Mobilicity and TELUS acquired Public

72 CRTC 2015-177, ¶ 16. 73 See “Regulatory Policy Goals and Spectrum Auction Design, Lessons from the Canadian AWS Auction,” A Statement by Christian Michael Dippon, March 20, 2009. 74 At the time of the Consultation, “Shaw and Bragg Communications Inc. [were] also expected to launch service in the near future.” (Industry Canada 700 MHz Consultation, p. 6.)

NERA Economic Consulting 43

Mobile.75 In its 700 and 2500 MHz auctions, ISED used spectrum caps instead of set-

asides. According to ISED, “These spectrum caps will give four or more service providers

in most regions, including AWS entrants or future new entrants, the opportunity to access

prime spectrum in both the 700 MHz and 2500 MHz bands.”76 ISED auctioned the 700

MHz spectrum in 2014 with Videotron and Bragg (Eastlink) among those obtaining

spectrum. 77 In 2015, ISED auctioned the 2500 MHz spectrum with Videotron, Bragg

(Eastlink), Corridor Communications, and Xplornet obtaining spectrum.78 In subsequent

AWS-3 and 600 MHz auctions, ISED reverted to set-asides. The 600 MHZ auction started

on March 12, 2019.79 The provisional auction results were announced on April 10, 2019,

and the service providers benefiting from set-asides paid only 42 percent of what the non-

set-aside service providers paid on a per population covered basis.80

73. Finally, the CRTC also implemented various competitive regulatory measures at the retail

level. For instance, in December 2018, the Commission required the introduction of entry-

level data-only plans by the three nationwide MNOs.81 According to the Commission, these

plans “would add several new lower-cost data-only options that did not previously exist.”82

Interestingly, although the Commission viewed the new plans as “an important step

75 TeleGeography, GlobalComms Database, Canada, p. 33 (accessed March 14, 2019). 76 Industry Canada, Policy and Technical Framework, Mobile Broadband Services (MBS)—700 MHz Band, Broadband Radio Service (BRS)—2500 MHz Band, SMSE-002-12, March 2012, ¶¶ 34–35 (hereinafter Industry Canada, 700 & 2500 MHz Auction Technical Framework). 77 Government of Canada, Announcement of 700 MHz Spectrum Auction Results, https://www.ic.gc.ca/eic/site/064.nsf/eng/07477.html (modified Apr. 16, 2014). 78 Government of Canada, 2500 MHz Auction—Final Results, June 25, 2015, https://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf11030.html. 79 Government of Canada, Table of Key Dates—Technical, Policy and Licensing Framework for Spectrum in the 600 MHz Band, https://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf11369.html (modified Mar. 28, 2018). 80 Government of Canada, 600 MHz Auction—Provisional Results, April 10, 2019, http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf11499.html. 81 See CRTC, Telecom Decision CRTC 2018-475, Lower-cost data-only plans for mobile wireless services, Dec. 17, 2018, Public record: 1011-NOC2018-0098 (hereinafter CRTC Decision 2018-475). 82 Ibid., ¶ 42.

NERA Economic Consulting 44

forward in developing and supporting more affordable and innovative mobile wireless

services,” most of the other Canadian service providers, including Cogeco, Eastlink, Shaw,

SSi Micro, and Videotron, expressed concern that such plans “would foreclose this market

opportunity for them.”83 The CRTC also introduced a code of conduct for mobile wireless

services with the aim to “contribute to a more dynamic marketplace.”84 To that end, it

limited early cancellation fees, thus enabling subscribers “to take advantage of competitive

offers at least every two years.” 85 In addition, it required service providers to unlock

wireless devices at the subscriber’s request and to offer a trial period for a wireless

contract.86 The December 2017 revision mandated that all new handsets be unlocked and

that all existing handsets be unlocked upon a subscriber’s request at no charge.87 The aim

of this policy was to ensure that “customers are more able to take advantage of competitive

offers by switching WSPs.”88

74. The existing wholesale regulatory framework in Canada is already extensive and surpasses

most, if not all, frameworks in the world. Furthermore, all provinces already have a fourth

provider, thus it is unclear what problem mandated MVNO access is supposed to solve.

E. The CRTC’s Recent Market Interventions Are Not Signs of Wholesale Market Failure

75. Economic regulation of retail or wholesale markets is only warranted to correct some

explicit market failure. In its Notice, the Commission states that twice in the last five years

83 Ibid., ¶¶ 35–36, 41. 84 CRTC, Telecom Regulatory Policy CRTC 2013-271, The Wireless Code, June 3, 2013, File number: 8665- C12-201212448, p. 1. 85 Ibid. 86 Ibid. 87 CRTC, Telecom Regulatory Policy CRTC 2017-200, Review of the Wireless Code, June 15, 2017, File number: 1011-NOC2016-0293, ¶ 311 (hereinafter CRTC Wireless Code Review). 88 Ibid., ¶ 300. NERA Economic Consulting 45

it has had “to address disputes between a carrier and a potential MVNO when the

prospective MVNO was unable to successfully negotiate an agreement with a wireless

carrier, and instead sought to inappropriately use wholesale roaming as a means to enter

the market.” The Commission blames this on the failure of “a sustainable retail MVNO

market … to develop on its own.” 89 This characterization is inaccurate as the two

“problems” are not indicative of market failure but are the product of two instances where

companies attempted to abuse the Commission’s domestic roaming regime.

76. Regarding the dispute between Rogers and Ice Wireless’ MVNO affiliate Sugar Mobile,

the Commission noted that Rogers must provide roaming “to all end-users of its wholesale

roaming customers, including the end-users of any MVNOs operating on the wholesale

roaming customers’ networks.”90 Ice Wireless had a roaming agreement with Rogers.91 The

dispute arose because Ice Wireless allowed its MVNO affiliate “to connect to the [Rogers]

network when outside Ice Wireless’s operating territory.”92 Thus, the dispute concerned

Sugar Mobile’s efforts to skirt MVNO regulations by offering service outside its wholesale

provider’s network. That is, “The SIM card is registered to Ice Wireless and is embedded

with a northern Canada 867 area code, but Sugar Mobile end-users can choose a phone

number with an area code from anywhere in Canada, and it is this number that people

calling them dial.”93 The Commission rejected Sugar Mobile’s efforts to obtain permanent

instead of incidental access to Rogers’ network.94 Sugar Mobile was circumventing the

89 Notice, ¶ 38. 90 CRTC, Telecom Decision CRTC 2017-57, Ice Wireless Inc. – Application regarding roaming on Rogers Communications Canada Inc.’s network by customers of Ice Wireless Inc. and Sugar Mobile Inc., March 1, 2017, File number: 8620-J106-201601633, ¶ 10 (emphasis added). 91 Ibid., ¶ 11 (emphasis added). 92 Ibid., ¶ 13 (emphasis added). 93 Ibid., ¶¶ 12, 14–15. 94 Ibid., ¶ 37. NERA Economic Consulting 46

requirement to negotiate MVNO access by using the domestic roaming tariff to obtain

permanent roaming—an action that the Commission ruled was invalid.

77. In the other intervention mentioned in the Notice, TNW Wireless made application to the

Commission to be allowed “to offer two types of services as a wireless carrier: (i) a

traditional mobile wireless service, and (ii) an iPCS (Internet personal communications

system) service, which is a Wi-Fi-based … service.” 95 The Commission found, as with

Sugar Mobile, that iPCS users “would be able to have phone numbers from outside TNW’s

home network footprint … in a manner that would result in its end-users gaining permanent

access to the national wireless carriers’ networks.”96 Therefore, the Commission rejected

TNW Wireless’ request because it would have resulted in permanent roaming “in violation

of wholesale roaming agreements as mandated in Telecom Decision 2017-56.” 97

78. Thus, neither of these two instances is evidence of a MVNO wholesale access market

failure but simply the enforcement of a previous decision in instances where the Wi-Fi first

provider made inappropriate use of roaming agreements. These so-called problems bear no

relationship to MVNO wholesale access, let alone access to the networks of Rogers, Bell,

and TELUS. Imposing regulation on all nationwide providers for all MVNO access is

entirely unwarranted as there is no evidence that MVNOs have trouble accessing the

Rogers, Bell, or TELUS networks. Furthermore, the simple existence of an unsuccessful

negotiation is not grounds for regulatory intervention. Rather, if an MVNO and an MNO

cannot reach a wholesale agreement, the regulator must conduct a detailed analysis to

95 CRTC, Telecom Decision CRTC 2019-56, TNW Wireless Inc. – Application for final relief regarding agreements for wholesale mobile wireless roaming services from Bell Mobility Inc. and TELUS Communications Inc., Feb. 28, 2019, Public record: 8620-R63-201705675, ¶ 7. 96 Ibid., ¶ 25. 97 Ibid., ¶¶ 26–27. NERA Economic Consulting 47

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Imposing Mandated MVNO Access Will Harm for Wholesale Mobile Services Canadian Consumers

determine whether the failed negotiation is due to anticompetitive tactics by the MNO or

simply the outcome of a commercial negotiation.

VI. IMPOSING MANDATED MVNO ACCESS WILL HARM CANADIAN CONSUMERS

79. Mandating wholesale MVNO access despite the large body of evidence demonstrating that

no consumer benefits will emerge will only hurt Canadian consumers. As explained, this

consideration caused the CRTC to refrain from mandating wholesale MVNO access in

2015. The economic literature confirms the negative investment incentive of the proposed

action, and available investment data show that wholesale access seekers do not offset this

negative investment incentive. In fact, they invest minimally, which is evidence that they

do not aspire to climb the proverbial ladder of investment.

A. The Economic Literature Confirms the Negative Investment Incentive

80. A considerable body of economic literature examines the repercussions on investment by

facilities-based providers because of a regulatory mandate to open a wholesale market. For

instance, Kim et al. investigated MVNO access regulation as it affects infrastructure

investment by the incumbent operators in the mobile wireless industry.98 As Kim et al.

notes, there had been increased concerns about the impact on investment as “MVNO access

can induce spillovers that affect MNO incentives to adopt new mobile technologies or to

improve their existing networks.”99 MVNO access can be mandated or negotiated. Those

negotiated “show that it may be profit-maximizing for MNOs and MVNOs to have

98 See Jihwan Kim, Yunhee Kim, Noel Gaston, Romain Lestage, Yeonbae Kim, and David Flacher, “Access regulation and infrastructure investment in the mobile telecommunications industry,” Telecommunications Policy 35 (December 2011): 907–919, ISSN 0308-5961. 99 Ibid., p. 908. Investment spillovers occur when an MVNO can limit the ability of the investing MNO to receive the benefits from its investments.

NERA Economic Consulting 48

voluntary strategic partnerships based on resale, product differentiation, and re-

branding.”100 Based on MNO firm level data from 21 OECD countries for the period 2000–

2008, Kim et al. concluded, “The effect of mandated MVNO entry has a significant

negative impact on investment intensity of MNOs. Non-mandatory provision … is not

significantly related to the investment intensity of MNOs.”101

81. Similarly, Prof. Graeme Guthrie finds that mandatory MVNO access regulation creates

asymmetric risks:

The investment flexibility available to the entrant exposes the incumbent firm to considerable risk. After the incumbent has invested in an asset, entrants can wait to see if an innovation is successful before they enter. Therefore, the incumbent will find its profits reduced in good states by entrants seeking access. Risk-sharing is therefore asymmetric, with the incumbent bearing all of the down side risk but the incumbent and entrants sharing the upside risk. However, the incumbent has made irreversible investments and so must bear the opportunity cost of capital in both good and bad states.102

82. Recent studies focus on the potential impact of regulation on 5G rollout. Briglauer,

Cambini, and Grajek who examined wireline telecommunications networks in Europe

confirm the negative investment incentive. Their study found that access regulation causes

a decrease in investment in new technologies.103 Similarly, Bauer and Bohlin specifically

discuss mandated MVNO access. As with Guthrie, they find that mandating:

MVNO access has asymmetric effects on MNOs and the players seeking access. It reduces the ability of the MNO to negotiate custom commercial agreements and consequently the ability to appropriate returns from investment and innovation in network infrastructure. Other things being equal, this will reduce the incentives of MNOs to invest in network

100 Ibid., p. 909. 101 Ibid., p. 914. 102 Graeme Guthrie, “Regulating Infrastructure: The Impact on Risk and Investment,” Journal of Economic Literature, Vol. XLIV (December 2006): 925–972, 961. 103 See Wolfgang Briglauer, Carlo Cambini and Michał Grajek, “Speeding up the internet: Regulation and investment in the European fiber optic infrastructure,” International Journal of Industrial Organization 61 (2018): 613–652.

NERA Economic Consulting 49

deployment and upgrades and incentives to innovate in network differentiation.104

They also highlight the fact that during the early stages of a network, as will be the case

with 5G, MNOs have strong incentives in generating additional demand.105 This is another

reason to continue with the current model based on commercial negotiation. Bauer and

Bohlin conclude:

Overall, the likely effect of regulated MVNO obligations at an early stage of 5G development is to reduce investment and slow innovation. Even though it may entail higher transaction costs initially, it is a preferable strategy to allow negotiations among interested players. Competition policy can serve as a backup in case such negotiations are abused by MNOs to impede competition.106

B. Wholesale Access Seekers Invest Minimally

83. Comparing Canadian facilities-based providers investment amounts for fixed and wireless

infrastructure to those of the wholesale access seekers (i.e., resellers including MVNOs as

only aggregate data are available) puts the investment that is at risk into perspective.

Moreover, it reveals that even a 1.5 percent loss in wireless capital investment will likely

not be remedied by an offsetting investment from an access seeker because it would require

a doubling of reseller capital investments.107

84. As shown in Table 11, the facilities-based providers in Canada invest significantly more

than wholesale access seekers in both absolute plant and equipment spending and as a

104 Johannes M. Bauer and Erik Bohlin, “Roles and Effects of Access Regulation in 5G Markets (September 4, 2018): 29, https://www.researchgate.net/publication/327447217_Roles_and_Effects_of_Access_Regulation in_5G_Markets_Full_Report. 105 Ibid., p. 30. 106 Ibid. 107 The CRTC defines: “Resellers or Non-facilities-based service providers generally acquire telecommunications services from other providers and either resell those services or create their own network from which to provide services to their customers. A company that owns a small amount of facilities but has the vast majority of its operations on leased facilities may also be classified as non-facilities-based.” The CRTC lists the MVNO Primus as a “Resellers of Telecommunications Services.”

NERA Economic Consulting 50

percent of revenue.108 The Canadian facilities-based telecom providers spend an average of

close to CAD 10 billion on plant and equipment per year, which does not include their

massive investments in spectrum licenses. Mobile wireless providers contributed

approximately CAD 2.2 billion to this amount, not including their expenditures on

spectrum.109 In stark contrast, resellers invest merely an average of CAD 32 million per

year. 110 Expressed as a percentage of revenue, facilities-based providers reinvest

approximately 22 percent of their revenue, compared to 2 percent for resellers.

Table 11: Canadian Telecommunications Revenue and Investments by Provider Type

Average 2012-16 ($ million)

Revenue: (1) Incumbent Telecom Services Providers (TSPs) 28,783 (2) Alternative Service Providers (ASPs) 15,843 (3) Subtotal (1)+(2) 44,626 (4) Resellers 1,605 (5) Total Revenue (3)+(4) 46,231 (6) Resellers as a % of Total Revenue (4)/(5) 3.5%

Investment in Plant & Equipment: (7) Wireline and Wireless TSPs and ASPs Total 9,880 (8) Wireline and Wireless as a % of Related Revenue (7)/(3) 22.1% (9) Resellers 32 (10) Reseller as a % of Related Revenue (9)/(4) 2.0% (11) Total Investment (7)+(9) 9,912 (12) Resellers as a % of Total Investment (11)/(9) 0.3%

Note: Revenue includes wireless. Investment by facilities-based carriers does not include spectrum. Totals may not sum due to rounding. Source: CRTC, “Communications Monitoring Report 2017,” Tables 5.0.4 and 5.0.5.

85. Despite this stark imbalance in investment levels, the CRTC finds:

108 The CRTC only publishes wireline and wireless reseller data in an aggregate form. 109 Wireless carriers invested another CAD 2.3 billion in plant and equipment in 2017. (CRTC, “Communications Monitoring Report 2018,” Retail Mobile Sector.xlsx, Table 6.11.) 110 CRTC, “Communications Monitoring Report 2017,” Tables 5.0.4 and 5.0.5. NERA Economic Consulting 51

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Conclusions for Wholesale Mobile Services

The Commission considers that, on balance, it is likely that the benefits that a well-developed MVNO market would deliver to Canadians are now more likely to outweigh any negative impacts that a policy of mandated wholesale MVNO access might have on wireless carriers’ network investments, particularly given the extensive investments that have been made in recent years.111

86. Such a consideration is dangerous as it overlooks the fact that investments are repeat

events, particularly in the dynamic telecommunications sector. An abrupt change in

regulatory rules might not impact existing networks (as these are sunk costs) but will most

definitely shape future investments, particularly as they pertain to further deploying 4G

LTE services to rural areas. Furthermore, with the impeding deployment of 5G services,

the industry is about to commence one of the largest network upgrades in recent history.

VII. CONCLUSIONS

87. With no material consumer benefits and well-functioning market forces supplemented by

several regulatory measures, it is my expert opinion that the CRTC should forbear from

mandating MVNO access. Imposing such regulations would trigger the very investment

concerns that caused the CRTC to rule against MVNO regulation in 2014 and have a

negative impact on consumer welfare.

111 Notice, ¶ 39 (emphasis added). NERA Economic Consulting 52

CRTC TNC 2019-57 TELUS Communications Inc. Appendix C May 16, 2019 Revised An Examination of the Regulatory Framework Appendix A: Curriculum Vitae of for Wholesale Mobile Services Christian M. Dippon, Ph.D.

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

Dr. Dippon is a Managing Director at NERA and a leading authority in complex litigation disputes and competition 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. Global Arbitration Review (2019) ranks Dr. Dippon among the world’s leading commercial arbitration experts.

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 (AAA) and international arbitrations (UNCITRAL, ICC, ICSID), and submissions before international courts. He assists clients with a broad range of litigation disputes related to wireline, wireless, cable, media, Internet, consumer electronics, and the high-tech sector. Dr. Dippon also routinely testifies before US and international regulatory authorities, including the Federal Communications Commission, the International Trade Commission, the Canadian Radio-television and Telecommunications Commission, and the Competition Bureau Canada.

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).

NERA Economic Consulting 53

EDUCATION

Curtin University, Perth, Australia PhD in Economics, 2011

University of California, Santa Barbara, CA, USA MA in Economics, 1995

California State University, Hayward, CA, USA BS 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

HONORS AND PROFESSIONAL ACTIVITIES

Member, International Bar Association (IBA) 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) Who’s Who Legal Arbitration 2019, Expert Witness

TESTIMONY IN REGULATORY AND JUDICIAL PROCEEDINGS (2010–PRESENT)

ON BEHALF OF [CONFIDENTIAL SATELLITE INDUSTRY] In the Matter of an Arbitration und the Rules of Arbitration of the International Centre for Settlement of Investment Disputes, ICSID Case No. [Confidential], [Confidential], Claimant against [Confidential], Respondent against [Confidential], (Expert Report on Behalf of Claimant], January 9, 2019 (Economic Damages).

ON BEHALF OF [CONFIDENTIAL CONSUMER ELECTRONICS] In the Matter of an Arbitration under the Rules of Arbitration of the International Chamber of Commerce, ICC Case No. [Confidential], [Confidential], Claimant against [Confidential], Respondent against [Confidential], Counterclaim-Respondent, July 6, 2018 (Expert Report on Behalf of Respondent], November 16, 2018 [Second Expert Report on Behalf of Respondent], December 20 – 21, 2018 [Oral Testimony on Behalf of Respondent] (Economic Damages).

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)

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 COMPETITION BUREAU CANADA 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)

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 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, June 5, 2018, and November 21, 2018. (Economic damages). April 25, 2019 [Oral Testimony on Behalf of Claimants]

ON BEHALF OF TELUS COMMUNICATIONS INC. Before the Competition Bureau Canada, Market Study Notice: Competition in Broadband Services, “Expert Report of Christian M. Dippon, Ph.D. On Behalf of TELUS Communications Inc., August 31, 2018 and November 26, 2018 (Competition Policy).

Before Innovation, Science and Economic Development Canada, SLPB-004-18, June 2018, Spectrum Management and Telecommunications, “Expert Report of Christian M. Dippon, PhD On Behalf of TELUS Communications Inc.,” Consultation on Revisions to the 3500 MHz Band to Accommodate Flexible Use and Preliminary Consultation on Changes to the 3800 MHz Band, August 10, 2018 (Competition Policy).

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 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 TELUS COMMUNICATIONS INC.

An Accurate Price Comparison of Communications Services in Canada and Select Foreign Jurisdictions, October 19, 2018.

ON BEHALF OF [MERGING PARTY]

An Examination of the European Experience with Mergers in the Wireless Sector, Economic Lessons for the Evaluation of [Confidential], Christian M. Dippon, September 17, 2018.

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

“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.

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, Applied Economics, Volume 48, 2016 – Issue 39.

“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,” November 1, 2014.

“Consumer Demand for Mobile Phone Service in the US: An Examination beyond the Mobile Phone,” 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

“Properly Comparing International Prices of Telecommunication Services, Statistical Method and Policy Implications for the Canadian Case Study,” Presented at the 22nd Biennial Conference of the International Telecommunications Society, June 25, 2018.

“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.

“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.

“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.