Leave fibre to the home free from wholesale access regs, Bell says

The CRTC should not mandate wholesale Internet access to next-generation fibre-to-the-home networks, said Mirko Bibic, chief legal and regulatory officer at BCE Inc. “The problem with mandated access is that it always undermines the returns on investments and it can act as a disincentive to further investment,” Bibic said in a telephone interview this week. “It doesn’t mean that at some point down the road we won’t find the right element in place to do deal with wholesale ISPs , but it certainly should not be mandated,” he said. CRTC regulations require Bell and other incumbent telecom providers to offer small ISPs wholesale access to their copper, cable, and fibre-to-the-node networks, allowing those small ISPs to compete with their own retail Internet services. The wholesale regulations do not require incumbents to offer small ISPs wholesale access to newer, faster fibre-to-the-home networks—which extend fibre lines through “the last mile,” or all the way to customers' homes—and which cost the incumbents hundreds of millions of dollars to build out. The issue for small ISPs is the speed and capacity that the incumbents, using fibre, will have to deliver Internet data through the last mile. Small ISPs contacted by The Wire Report also said incumbent operators will have licences to valuable spectrum they can use to deliver Internet connectivity wirelessly through the last mile in rural or remote areas where fibre is too expensive to extend to the home. Most small ISPs do not have the necessary spectrum, or capital to acquire their own spectrum, to deliver last-mile connectivity wirelessly, said Jean-Francois Mezei, a consultant with Montreal firm Vaxination Informatique and a critic of incumbent wholesale Internet pricing. “We need to have competition and we can’t allow the incumbents to regain their monopoly by redeploying fibre and not allowing competition on it,” he said in a phone interview. “In order to get competition in Canada for Internet access, we’ll need to have access to fibre.” Dominque Jodoin, the corporate vice-president for small ISP Mustang Technologies Inc., said it will be important for companies like his to have wholesale access to fibre-to-the-home down the road. “How fast will the demand grow? My guess, from experience, is probably faster than slower,” Jodoin said. He said researchers are testing fourth-generation, LTE wireless services with download speeds of up to 200 Mbps, which could be used to connect the last mile. Small ISPs will need access to networks that can handle similar speeds to offer a competitive service, he said. “That would be really an uncompetitive situation,” Jodoin said. “It has to be a level playing field.” Jean-Philippe Béique, president and owner of small ISP Electronic Box Inc., said in a phone interview that there is now little demand for wholesale access to fibre-to-the-home networks because the technology is not yet in most areas across the country. That won’t be the case for long, he said, adding that the incumbents are steadily upgrading their network with fibre. “The more we advance in the future, the more area will be covered by FTTH ,” he said. BCE subsidiary Bell Aliant operates Canada’s largest fibre-to-the-home network in Atlantic Canada. Glen LeBlanc, the company’s executive vice-president and chief financial officer, said in September its network will pass 650,000 homes by the end of 2012, and that that the company hopes to expand the footprint to more than one million homes “in the coming years,” including in Sudbury, Ont. BCE's Bell Canada is also building out fibre-to-the-home in Quebec City and fibre-to-the-node in Montreal and Toronto. Bibic said fibre-to-the-home networks represent “a massive undertaking” incurring large capital expenditures. Bell said this year its fibre-to-the-home build in Quebec will cost the company $240 million. Bell Aliant estimated it will spend $500 million on its fibre-to-the-home network by the end of 2012. Bell has no particular advantage over its competitors in building out its fibre networks, Bibic said, and the company must be able to recoup its capital investments through retail services without being forced to provide access to small ISPs that will compete for customers. “We’re taking the risk. We’re making the investment. We need to be able to generate a return on the investment so we can continue to do more,” Bibic said. He said wholesale access to fibre-to-the-home should only be mandated in cases where there is not enough competition. Competition now exists in Canada, where Internet users can choose between competing copper, cable, fibre and fixed wireless Internet services, he added. “There isn’t a market failure,” Bibic said. “You’ve got those multiple platforms into the home with multiple providers … If you have competition to that degree, then you don’t need mandated access.” Telus Corp., MTS Allstream and SaskTel are similarly rolling out fibre networks in their operating territories in Western Canada. The Wire Report reported Wednesday that cableco Rogers Communications Inc. is building out a new fibre-to-the home service in Toronto and Atlantic Canada, offering download and upload speeds of up to 250 Mbps. Brian McCullagh, director of business development for Vianet Internet Solutions, a small ISP that has built its own fibre-to-the-home lines in Sudbury and Chapleau, Ont., said wholesale prices for connecting to a fibre-to-the-home network would have to be higher than the costs of connecting to DSL phone and cable networks, “just because it is brand new infrastructure.” Béique and other small ISPs contacted by The Wire Report said it is important for the CRTC to start a file on wholesale access to fibre-to-the-home in 2013 to have rules in place before new technologies impact their ability to compete. nkyonka@thewirereport.ca

Leave fibre to the home free from wholesale access regs, Bell says

News | November 21, 2012

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Leave fibre to the home free from wholesale access regs, Bell says

News | November 21, 2012

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