Cable no substitute in wholesale service gap areas: CNOC

The presence of cable infrastructure in locations where there is no telco option for wholesale Internet service is not a sufficient alternative, small Internet service providers (ISPS) are arguing in a proceeding in front of the CRTC. In reply comments this week, the Canadian Network Operators Consortium (CNOC) said that “prohibitive switching costs leave many Competitors with no choice but to commit to one wholesale service platform. Once committed, the Competitor is bound by costs that constitute a daunting barrier to competition in areas that may be served by another wholesale HSA service platform.” CNOC initiated the Part One proceeding in March, telling the CRTC that its members are encountering an increasing number of areas where they have no access to wholesale Internet service from telcos because the only sufficiently fast option is fibre-to-the-premises (FTTP) infrastructure. While the CRTC mandated wholesale access to FTTP facilities in July 2015, that will only begin once the new disaggregated wholesale regime is implemented, because that FTTP access doesn’t apply to the current aggregated wholesale regime. In documents filed earlier this month, large ISPs responded that there is no lack of competition in such cases, given that cable facilities already exist in those areas. CNOC said that factors contributing to high cost of switching to the cablecos’ wholesale service include complex administrative procedures that are unique to every incumbent, and the cost of purchasing thousands of IPv4 addresses that would be necessary in order to switch to cableco wholesale service. The only way to do so would be to pay market rates, which are currently between $10 and $12 an address, and are expected to increase in the coming months, CNOC said. “Depending on the desired coverage area of the Competitor, tens of thousands of IPv4 addresses may be required. Clearly, these costs — which represent just another source of costs associated with switching Incumbent wholesale HSA service platforms — accumulate rapidly to the point of becoming prohibitive for many Competitors,” it said. CNOC noted that even though there are small ISPs that currently subscribe to both cable and telco service, they make up a minority of such companies. “Moreover, end-users select one or the other platforms offered by the Competitor and do not routinely switch platforms, given the switching costs they would have to bear, such as switching modems and inside wiring and ensuring that comparable or better service is available if a switch is made, which is not necessarily the case.” It added that the CRTC has “long mandated” that both types of wholesale service be available, even in areas where they overlap. “This regulatory policy goes beyond merely establishing technological and regulatory neutrality. It ensures that Competitors can access the wholesale HSA service platform appropriate to their customers’ needs,” CNOC wrote. “Contrary to the submissions of Responding Incumbents, these platforms are not interchangeable: they have distinct differences which afford different retail services to customers.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

Cable no substitute in wholesale service gap areas: CNOC

News | May 19, 2017

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Cable no substitute in wholesale service gap areas: CNOC

News | May 19, 2017

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