CTS 2023 regulatory panel react to CRTC mandated FTTP wholesale access

UPDATED: CTS regulatory blockbuster react to CRTC FTTP decision MISSISSAUGA, Ont. — Regulatory experts at The 2023 Canadian Telecom Summit reacted to a CRTC decision mandating large incumbent telephone companies to provide wholesale access to their FTTP networks in Ontario and Quebec, with Telus Corp. saying it is still assessing the decision, Cogeco Inc. recommending a holiday period for smaller carriers in the broader decision, and Iristel Inc. accused BCE Inc. of pulling a hissy fit in their response. Telus vice-president, telecom policy and chief regulatory legal counsel, Stephen Schmidt, kicked off the discussion on Tuesday evening saying the company was still reviewing the decision. He then added that the commission is lagging behind and its current work is taking away focus on “other meritorious issues” such as climate policy or Indigenous connectivity. “Time has moved on for peer regulators, and they’re focusing on privacy, on 6G, on AI, on digital markets,” he said. “But the commission is a quarter century into doing something that’s a quarter century old. And the big worry on that is the extent to which it crowds out other meritorious works… from sitting at the center of focus.” The interim decision only affects Telus and Bell, who will have six months to implement the changes. In its decision, the commission noted that incumbent local exchange carriers (ILECs) have primarily focused on FTTP deployment, passing more than 10 million Canadian premises by the end of 2022. However, cable carriers have limited FTTP coverage, reaching around 625,000 Canadian premises. The CRTC decided that mandating cable carriers to provide temporary aggregated FTTP access would have limited additional benefit and could slow down the regulatory process, which would be contrary to the 2023 Policy Direction emphasizing timely operations. As a result, the commission determined that only ILECs would be mandated to provide temporary aggregated FTTP access. Bell’s regulatory experts were absent from this year’s blockbuster panel, but hours after the decision came out the company issued a press release stating it was cutting its fibre investments by more than $1 billion in 2024-25. Iristel founder and CEO Samer Bishay accused Bell of “throwing a hissy fit just to make some noise,” but ultimately the CRTC’s decision is no game changer and leaves more questions than answers. “This is not going to change the landscape. It’s not going to provide affordable internet service to Canadians,” Bishay said. “This looks to me like maybe a … baby step in the right direction, but it’s nowhere near what was needed to be done many years back.” According to the commission, the decision is aimed at improving competition and will provide more affordable high-speed internet options to more than five million households. After accounting for incumbent carrier acquisitions of wholesale-based competitors, the number of subscribers to wholesale-based competitors in Ontario and Quebec has nearly halved since the end of 2020. “These provinces are where competitors have historically attracted the largest number of subscribers, and where they are currently losing subscribers the fastest,” the commission wrote in its Monday decision. Start.ca, Altima, VMedia, Oxio, Ebox and Distributel have all been acquired in the past two years, with Telus taking the former two and Bell purchasing the latter two. Cogeco, which acquired Oxio, is exempt from the interim decision. Paul Beaudry, president of regulatory affairs, said the company is pleased with the exemption, but there needs to be further protections in the broader decision on the issue of fibre. Cogeco has deployed fibre in recent years, but, as noted by the commission, it makes up a very small amount of its overall footprint. Beaudry noted that the fiber deployments are completely new projects in areas that have never had high-speed internet before which make the business case challenging even with government subsidies. Beaudry said Cogeco wants an exemption for a certain threshold of homes passed to protect smaller carriers whose fibre deployments are amortized on a smaller amount of potential customers. “That doesn't represent a significant proportion of overall fiber connections in Canada,” he said. Beaudry also recommended that the commission implement a three-year holiday for new fiber deployments that are affected going forward. “We think that measures like this will maintain incentives to invest… for players like us who have recently gotten into the fibre game and don't have the seven-year headstart that ILECs have had. This is an important part of the puzzle,” he said. The commission has established interim rates that wholesale-based competitors will pay to incumbent companies for access. Bell and Telus put forward some suggestions during the proceeding. The CRTC decided not to accept Bell's suggestion to include a specific cost factor. Instead, they're making it easier by using a single rate for FTTP access to ensure fair and straightforward pricing. The commission also temporarily rejected Bell’s request to add extra charges for faster internet speeds to allow for more consistent pricing. Costs linked to weather events, like storms, won't be part of the FTTP rates. This decision aligns with their past rules. The CRTC did agree to add a 30 per cent markup to FTTP access rates for Bell in Ontario and Quebec, along with Telus in Quebec. This is to keep pricing consistent and it is changing how they bill for capacity-based internet usage. For some parts, they're reducing the rates by 26.4 per cent to be fair to all companies. TekSavvy Solutions Inc. issued a press release welcoming the decision but raising concern over the rates noting that telecoms are already selling fibre internet below those rates. The Competitive Network Operators of Canada chair Paul Andersen said he is cautiously optimistic and concerned about the regional nature of the decision. “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. This is essential, as the right structure is the cornerstone for innovation and investment in the services that our members provide," Andersen stated. "We've seen how restrictive rates can impede our ability to innovate; therefore, we are optimistic that the CRTC will continue on the path they have started and quickly establish a national framework with final rates that supports vigorous national competition." This decision will remain in effect until the CRTC concludes its broader review on the merits of establishing long-term wholesale access to FTTP networks nationwide. A public hearing will commence on Feb. 12 in Gatineau, Que. — Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Paul Park at ppark@thewirereport.ca

CTS 2023 regulatory panel react to CRTC mandated FTTP wholesale access

News | November 8, 2023

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CTS 2023 regulatory panel react to CRTC mandated FTTP wholesale access

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