Cable sufficient alternative in wholesale service area gaps: incumbents

There is little evidence to suggest there is a lack of competition in so-called wholesale wireline service area gaps, given that cable facilities already exist in those areas, incumbents argued in comments to the CRTC. The companies responded this week to a Part 1 application from the Canadian Network Operators Consortium (CNOC), which is asking the regulator to allow small providers to get wholesale access to fibre-to-the-premises (FTTP) infrastructure under the current aggregated regime — something the CRTC said in July 2015 won’t happen until a new disaggregated regime comes into force. “The basis of CNOC’s argument is that under the current regime ‘wholesale service gaps’ have occurred in which CNOC’s members cannot effectively compete unless they receive immediate access to FTTP,” Rogers Communications Inc. said in its submission to the regulator. “However, CNOC ignored the presence of cable carriers’ facilities CNOC can fully access, which provide the same level of speed and performance” as the fibre networks of telcos like BCE Inc. and Telus Corp., Rogers added. “These wholesale service gaps therefore do not exist except in very limited instances.” CNOC argued service gaps exist in newly developed areas where the only facilities are FTTP, locations with FTTP where the incumbent has removed legacy facilities, and areas where the alternative to FTTP is legacy facilities, which only allow speeds of up to about 6-7Mbps. But even in those situations, “CNOC’s members…have options to sell service tiers that are substitutes for FTTP services,” Rogers said. That’s because CNOC members are able to “offer the entire menu of Rogers speed offerings,” which Rogers says are “complete substitutes for Bell’s service tiers.” In its own submission, Bell said CNOC is “factually incorrect” in its suggestion that there is a weak level of retail competition in service gap areas when “in 98 per cent of alleged ‘gap’ cases a cable broadband facility is present along with our FTTP.” “There is no pressing competition concern in so-called ‘Wholesale HSA Access Gaps’ that requires a wholesale regulatory remedy,” Bell argued, adding mandating such services in the interim would be a “complex and time-consuming endeavour, with no commensurate benefits.” Telus said that there is in fact competition in some of these areas, but CNOC members choose not to invest in facilities in them. “Clearly, the Commission was aware of these arguments and determined that any such gaps were insufficiently concerning to warrant a deviation from the implementation process,” Telus added. “CNOC has provided no new evidence in this respect.” In an email, Christopher Hickey, CNOC’s director of industry affairs, raised the CRTC’s recent decision that required Rogers to provide wholesale access over its FTTP infrastrcture to TekSavvy Solutions Inc. in a Toronto condo building after it had removed its non-FTTP facilities. “Whether facilities from a large telephone company were also available in the neighbourhood was not a factor in the Commission’s finding that the inability of competitors to offer retail Internet service over the large cable carrier’s facilities resulted in foreclosure of competition in the neighbourhood,” Hickey said. The major telecom companies said that CNOC presented no new evidence that would suggest a need for interim wholesale high-speed access through FTTP. Rogers said CNOC did not establish that “there has been a fundamental change in circumstances” since the CRTC made its 2015 wholesale wireline decision. CNOC is “simply re-arguing its case…without any more evidence that its concerns are more of a policy concern today than they were then,” Bell said. But the Public Interest Advocacy Centre (PIAC) argued in its submission that the CRTC should allow the application on the basis that it would partly serve the commission’s universal service objective of ensuring universal access to broadband Internet, with small Internet service providers playing a key role by increasing competition and therefore consumer choice and lower broadband costs. Moreover, OpenMedia argued that Canadian Internet users, particularly low-income residents who don’t live in heavily populated areas, are being “left in the lurch” without wholesale access to FTTP. The incumbents “continue to accumulate a head start as near-exclusive providers of FTTP access to consumers, in precisely the competition-foreclosing way” that the commission was warned about before the July decision, the advocacy group added. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Cable sufficient alternative in wholesale service area gaps: incumbents

News | May 5, 2017

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Cable sufficient alternative in wholesale service area gaps: incumbents

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