CRTC allows smaller internet companies to sell service over telecoms' fibre networks

Sammy Hudes, The Canadian Press

In a move it says is meant to revive dwindling competition for internet services in Canada's two largest provinces, the CRTC will allow independent competitors to sell over the large telephone companies' fibre networks in Ontario and Quebec.

The national telecommunications regulator announced the interim decision Monday at the Canadian Telecom Summit in Toronto amid an ongoing review of third-party access to fibre networks in the hope of lowering prices for customers.

It marks a partial decision, with more hearings to come, in a review launched by the CRTC in March into the rates that smaller competitors pay the major telecom companies for access to their networks. At the time, the commission also announced it would lower some wholesale internet rates by 10 per cent.

The review, which has received more than 300 interventions, included an expedited probe of whether big carriers should provide smaller competitors with access to their fibre-to-the-home networks.

The CRTC said its review found there has been a significant competitive decline in Ontario and Quebec, where independent internet providers currently serve 47 per cent fewer customers than two years ago.

"At the same time, several competitors have been bought out by larger internet providers. This has left many Canadians with fewer options for high-speed internet services," CRTC chairwoman Vicky Eatrides said in her speech to conference attendees on Monday.

"The CRTC is acting quickly to help stabilize the market."

The decision requires large telephone companies, namely BCE Inc. and Telus Corp., to provide competitors with access to their fibre-to-the-home networks within six months. It said the delay will allow companies to prepare their networks and develop information technology and billing systems.

The CRTC said it is also setting interim rates that smaller competitors will pay for access to fibre networks, which will support both competition and continued investment in high-quality networks.

The move is meant to stabilize the market in areas where it will make a significant impact on choice and affordability for consumers, in line with Industry Minister François-Philippe Champagne's direction earlier this year for the CRTC to enhance consumer rights, the regulator said.

It was met with cautious praise from the Competitive Network Operators of Canada, which called the decision "an important and essential step towards a fairer competitive landscape."

But the organization, which represents independent internet providers, said its "optimism is tempered," noting the decision "only implements an interim regional regime for two major telephone companies and rates are still interim."

"A national permanent framework applicable to all dominant carriers with just and reasonable rates is required to allow for true competition which is yet to be established," said CNOC president and chair Paul Andersen.

"This is essential, as the right structure is the cornerstone for innovation and investment in the services that our members provide ... Until final rates that are just and reasonable are set, significant competition is unlikely to be stimulated."

In a statement, Telus spokeswoman Kalene DeBaeremaeker said the company is reviewing the interim decision "and (looks) forward to participating in the remainder of the CRTC proceeding."

Bell Canada did not immediately respond to a request for comment.

Last week, Bell chief executive Mirko Bibic warned that if the regulator's decision in the review favoured the position of smaller players over the big companies, it would prompt Bell to slow down its fibre build plans.

"It’s as simple as that,” Bibic told analysts as the company reported its third-quarter earnings.

“That would be unfortunate because when we enter a community with fibre, we actually increase competition … The customer gets better service, better value, lower prices and that’s what’s being put at stake here with the conversation that we’re generally having in the regulatory proceedings.”

The regulator said the broader review remains ongoing, with the next public hearing set for Feb. 12, 2024.

No decisions have been made yet as to whether there will be a similar move affecting internet services in other provinces.

BNN Bloomberg is owned by Bell Media, which is a division of BCE.

Canada’s Largest Telecom Cuts Spending

After Blow From Regulator

Derek Decloet, Bloomberg News

(Bloomberg) -- BCE Inc., Canada’s largest telecommunications company, said it will chop capital spending by C$1 billion ($730 million) after a regulator ordered the country’s major phone providers to open up their broadband networks to smaller rivals at prescribed rates.

The decision by Canada’s telecom regulator applies to Ontario and Quebec, the two provinces where more than 60% of the population lives, and is intended to bring more competition to home internet services and reduce costs for consumers.

Vicky Eatrides, the chair and chief executive officer of the Canadian Radio-television and Telecommunications Commission, said the ruling was a response to years of declining competition from independent internet sellers, a number of which have been acquired by the major telecom firms.

The regulator will set interim rates at which BCE and other large phone companies must sell wholesale access to their high-speed “fiber to the home” networks, and will hold more public hearings on the issue starting in February, Eatrides said in a speech Monday.

For BCE, the ruling is set to curb growth in one its most important lines of business. The company has invested heavily in laying fiberoptic networks in Canadian cities and towns to sell higher-quality internet and television services, aiming to grab market share from Rogers Communications Inc. and other rivals. Ontario and Quebec are BCE’s most critical markets.

BCE, which said it has spent more than C$18 billion on its networks since 2020, will now slow the pace at which it builds. The Montreal-based company said it expects to reach 700,000 fewer locations by the end of 2025. “Rolling back fiber network expansion is a direct result of the CRTC’s decision,” it said in a statement late Monday.

The company spent C$3.5 billion in capital expenditures in the first nine months of this year, according to its most recent financial statements.

During that same period, BCE reported C$6.1 billion in wireline data revenue, which includes high-speed home internet services — more than the C$5.3 billion it got from its wireless service unit.

CRTC takes action to increase choice and affordability of high-speed Internet

CNW Group
Mon, November 6, 2023

OTTAWA, ON and GATINEAU, QC, Nov. 6, 2023 /CNW/ - Canadian Radio-television and Telecommunications Commission (CRTC)

The CRTC is taking action to increase choice and affordability of high-speed Internet services for more than five million Canadian households.

In March 2023, the CRTC announced a major public proceeding to improve Internet services competition. As part of the proceeding, the CRTC launched an expedited process to determine whether competitors should be able to access the fibre-to-the-home networks of large telephone and cable companies on an interim basis. Today's initial decision is the result of that expedited process.

The record of the proceeding, which includes over 300 interventions, shows that competition in the Internet services market is declining. In recent years, the percentage of customers served by competitors has decreased dramatically. This decrease is most significant in Ontario and Quebec, where independent competitors now serve 47% fewer customers than they did just two years ago. At the same time, several competitors have been bought out by larger Internet providers. This has left many Canadians with fewer options for high-speed Internet services.

Based on this record, the CRTC is acting quickly to help stabilize the market. On a temporary and expedited basis, the CRTC is providing competitors with a workable way to sell Internet services using the fibre-to-the-home networks of large telephone companies in Ontario and Quebec, where competition has declined most significantly. The CRTC is also setting the interim rates that competitors will pay when selling services over these fibre-to-the-home networks. These rates were chosen to allow Canada's large Internet companies to continue investing in their networks to deliver high-quality services to Canadians.

Today's initial decision aligns with the government's policy direction that requires the CRTC to foster Internet services competition, and to conduct proceedings and issue decisions in a timely manner. The CRTC is continuing to work on this proceeding and looks forward to a public hearing that will start on February 12, 2024.

Quote

"The CRTC is acting quickly to improve Internet services competition across Canada. Today's initial decision will bring new options to more than five million households. As the CRTC's review advances, Canadians can expect continued action to increase choice and affordability, while supporting investment in high-quality networks."

- Vicky Eatrides, Chairperson and Chief Executive Officer, CRTC

Quick facts

For more than 20 years, the CRTC has required large incumbent telephone and cable companies to sell access to their networks under specific rates, terms, and conditions.
Competitors need this access to offer more choice of Internet services to Canadians.
Large telephone companies have the most extensive fibre-to-the-home networks across Canada. By the end of 2022, 60% of Canadian homes and businesses reached by the large telephone companies, not including the territories, had access to fibre-to-the-home networks. By contrast, less than 5% of homes and businesses passed by cable companies have access to fibre-to-the-home networks.
As a result of today's initial decision, large telephone companies are required to provide competitors with access to their fibre-to-the-home networks within six months. The six-month period will allow companies to prepare their networks, and to develop information technology and billing systems.

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