In an effort to stoke competition in the broadband internet market, Canada’s telecom regulator is now making new wholesale internet services, including the use of fibre facilities, available to Quebec and Ontario companies competing with reigning incumbents like Bell or Rogers.
The Canadian Radio-television and Telecommunications Commission (CRTC) first announced the initiative in the summer of 2015, following an “extensive review” in which it found that “the large incumbent companies continue to possess market power in the provision of wholesale high-speed access services.”
In response, the Commission decided to require that the incumbents make those services available to competitors under a new architecture that provides ‘last-mile’ connections.
Additionally, the CRTC ordered that the incumbents make their fibre facilities available to competitors in the same way, an element that Bell disagreed with, stating that mandated access would lower its return on investment to the point that it would be unable to spend on fibre-to-the-home infrastructure.
A company purchases wholesale internet access primarily when it does not have the infrastructure to provide service directly to its customers. Instead, it purchases the service in bulk at wholesale rates from companies that have infrastructure — often large incumbents — and sells it on to its customers.
“This decision, along with multiple decisions rendered by the CRTC in recent years, continue to help ensure a healthy wholesale market, which is crucial to providing Canadians with choice.”
In 2015, the CRTC promised that its provisions would be implemented in phases across Canada, starting in Quebec and Ontario — and that’s precisely what the Commission is now doing.
As of today, the regulator says providers in Ontario and Quebec will have access to services based on a new architecture that will “enable greater competition.”
The new architecture is based on a switch from aggregated wholesale access to disaggregated wholesale access. Small internet service providers will still buy wholesale access to connections from a telecom’s network to the customer’s home, but under the new architecture, they must also separately lease or build their own transmission facilities within those locations.
The CRTC says this architecture gives resellers more control over their costs, while incumbents argued that network complications would arise due to variations in network equipment.
An in-depth review to establish final rates for these wholesale services is ongoing, according to the CRTC, but it says it decided to make these services available now with interim rates in the meantime to foster competition immediately.
For those interested, the interim rates are available to view in Telecom Order CRTC 2017-312 in the appendices.
“Today, the CRTC is fostering a more dynamic competitive telecommunications market by ensuring competitors have access to the wholesale services they need at reasonable prices,” stated interim CRTC chairperson Judith A. LaRocque in a press release.
“This decision, along with multiple decisions rendered by the CRTC in recent years, continue to help ensure a healthy wholesale market, which is crucial to providing Canadians with choice.”
The move is consistent with Innovation, Science and Economic Development’s mandate to increase competition in telecom pricing, which also saw ISED Minister Navdeep Bains order the CRTC to reconsider its decision on mandated wholesale roaming in early June 2017.
Source: CRTC
