Canada’s telecommunications regulator, the CRTC, has made a significant decision that will impact the internet service landscape in the country. The ruling expands on a previous decision that allowed smaller internet providers to access rivals‘ fibre networks to offer their services to customers. Starting next February, large telephone companies like Bell Canada, Telus Corp., and SaskTel must provide competitors with access to their fibre networks nationwide for a fee.
This decision comes after a temporary ruling last year that required Bell and Telus to provide access to their fibre-to-the-home networks only in Ontario and Quebec. The CRTC’s goal is to stimulate competition in provinces where independent companies are struggling the most. The regulator’s broader review could potentially make this ruling permanent and apply it to other provinces as well.
However, Bell responded to the previous ruling by reducing its network spend and cutting jobs, citing the diminished business case for investing in infrastructure. Despite this, the CRTC’s latest decision only applies to existing fibre networks, recognizing the high cost of building out fibre infrastructure. New fibre networks built by large telecoms will not be made available to competitors for five years, giving these companies a head start to recoup their investments.
The CRTC’s decision also exempts cable companies like Rogers Communications Inc. from the expanded mandate, based on a cost-benefit analysis. The regulator held a weeklong hearing in February, where various industry stakeholders and advocates provided input. The CRTC noted that fibre internet customers in Ontario and Quebec are already benefiting from increased choice and competition following the initial ruling.
The Competitive Network Operators of Canada, representing independent internet service providers, welcomed the expanded access to fibre networks. They believe this decision has the potential to bring increased internet choice to millions of Canadians. However, challenges remain, including disparities created by the head start and asymmetrical obligations between incumbent providers.
Bell had proposed conditions to mitigate potential disadvantages, emphasizing the importance of maintaining incentives for companies to invest in their networks. The CRTC’s ruling requires both telephone and cable companies to build out networks within their traditional serving territory to prevent them from halting investments and acting solely as wholesalers.
While Bell Canada and Telus did not provide comment on the decision, Quebecor Inc.’s CEO, Pierre Karl Péladeau, called it a positive step towards increasing competition. He stressed the importance of setting just and reasonable access rates, which the CRTC plans to do by the end of the year. RBC telecommunications analyst Drew McReynolds views the decision as balanced and likely better than feared, with a focus on balancing investment with increased competition and innovation.
In conclusion, the CRTC’s decision to expand access to fibre networks for smaller internet providers aims to promote competition and innovation in the Canadian internet service market. While challenges and concerns remain, the regulator’s efforts to level the playing field and ensure fair access rates are crucial for the future of internet services in the country.