Canada's telecommunications regulator has once again sided with small competitors of Canada's telco and cable giants, in a ruling it says will spur more competition in the market for ultra high-speed internet services.
Companies like BCE (BCE.TO -1.31%), Telus (T.TO -0.77%) and Rogers Communications (RCIb.TO -0.95%) will be required to make their new–and costly–fibre-optic networks available to small competitors like TekSavvy, Distributel, Primus and hundreds of others. Other so-called "wireline incumbents" like Manitoba Telecom and SaskTel will also be required to make their fibre-optic networks available.
The decision was announced Wednesday by the Canadian Radio-Television and Telecommunications Commission, following its review of Canada's market for wholesale wireline services. That review included a hearing held in November last year.
Large incumbent companies will now have to make their fibre facilities available to their competitors. This measure will ensure that Canadians have more choice for high-speed Internet services and are able to fully leverage the benefits of the broadband home or business.
The large incumbent companies will continue to be required to provide access to wholesale high-speed access services throughout their region and transition this access to a disaggregated architecture. The provision of wholesale high-speed access services on a disaggregated basis will be implemented in phases across Canada, starting with Ontario and Quebec.
The CRTC’s wholesale services framework sets out the rates, terms and conditions under which telecommunications service providers are required to make parts of their respective networks available to competitors.
"The CRTC's decision to extend wholesale broadband regulation to fibre to the home means the CRTC has updated its regulatory approach to keep pace with changing technology and consumer demand. The decision strikes the right balance between the private sector having incentive to invest and consumers having a competitive choice.
"Therefore, the Governor in Council is denying Bell Canada's petition and letting the CRTC decision stand.
This means the incumbents will have to make their FTTH facilities available to their competitors.
Question, can someone explain to me how this decision will make it cheaper for canadians? In readers digest version please. Don't the 3-5 companies own the infrastrcuture etc? How would this make things cheaper for us?
All the incumbents need to do to jack up wholesale rates is to increase retail prices. Published retail prices for internet and telephone have skyrocketed in recent years. Then they turn around and offer discounts to people who want them. Some deals and discounts, especially when combined with win back or retention offers, can be better than what the competition offers. It wasn't always that way but big companies are good at finding loopholes that increase their bottom line.
After analyzing the tariff applications, the CRTC is of the view that the rates proposed by certain of the large companies were not just and reasonable and had to be revised downwards. The CRTC is very concerned that certain large companies have not conducted their cost studies in accordance with well-established costing principles and methodologies.
In light of this finding, the CRTC is setting revised interim rates that better reflect costs that are just and reasonable.
"Competitors that provide retail Internet services to Canadians using wholesale high-speed services must have access to these services at just and reasonable prices. The fact that these large companies did not respect accepted costing principles and methodologies is very disturbing. What's even more concerning is the fact that Canadians' access to a choice of broadband Internet services would have been at stake had we not revised these rates. As always, we strive to create a dynamic competitive telecommunications market for Canadians." Jean-Pierre Blais, CRTC Chairman and CEO
See the press release for links to the interim wholesale rates for each provider as set by the CRTC. You can also find more info on the CRTC site for some of the steps that brought us here.