Ottawa Upholds CRTC’s Decision to Allow Small Internet Providers Access to High-Speed Networks
TORONTO — Indie Internet providers are celebrating Ottawa’s decision to uphold a ruling by Canada’s telecom watchdog that forces big Internet providers to sell smaller competitors wholesale access to their new, expensive and much faster fibre networks.
The federal government announced Wednesday it has rejected Bell Canada’s plea to quash the Canadian Radio-television and Telecommunications Commission ruling that aimed to provide consumers more choice in high-speed Internet providers, citing the need to support competition and increase high-speed broadband coverage.
Bell argued that having to sell access to its ultra-fast network that connects directly to homes would stifle investments in the fibre cables that deliver faster service in the first place. (Bell alone has spent $2.5 billion on these networks since 2010.)
But for small providers who buy and resell access to the networks built by big players with deep pockets — namely BCE Inc., Telus Inc. and Rogers Communications Inc. — the government’s decision gives them a chance to compete using infrastructure they couldn’t feasibly reproduce.
“It’s a big win for everybody,” Toronto-based VMedia Inc. co-founder George Burger said in an interview. “The gravitation toward the higher speeds ultimately meant with no access, there was no opportunity for competitive prices.”
Bell filed its petition the day after the federal election ushered in a new Liberal government, stating it might have to claw back annual investments by $384 million in Ontario and Quebec alone. Bell, which has only filed five such petitions in two decades, argued the CRTC decision would most hurt rural communities without sufficient returns to justify building fibre infrastructure.
But the Liberal government sided with the CRTC — and nearly 80,000 people who signed OpenMedia’s online petition asking the feds to “reject Bell’s price-gauging scheme” — citing the need for accessible, reliable and affordable high-speed Internet for middle-class and low-income families.
“We are committed to increasing higher-speed broadband coverage and supporting competition, choice and availability of services for Canadian consumers and business users,” Minister of Innovation, Science and Economic Development Navdeep Bains said in a statement.
Independent providers were grateful for the Liberals’ response to Bell’s petition, which Burger called a “grave, existential threat” to the market due to its potential to exclude small players from serving high-use Internet users. (Bell’s fibre cables allow top download speeds of up to 940 megabits per second compared to VMedia’s top speeds of 250 megabits per second. Most consumers opt for speeds between 25 and 60 megabits per second.)
Bram Abramson, chief legal and regulatory officer for Chatham, Ont.-based TekSavvy, said in an interview the decision “removes a sword hanging over our heads,” but that the devil will be in the details of how much big players can charge for network access. The final wholesale rate — it will likely take at least a year to set — will be the critical determinant of whether small players can offer cheaper prices, Abramson said.
Bell will abide by the rules and move forward, spokesman Murray MacDonald said in an email. But Bell was tight lipped when it came to questions regarding how the decision will influence its plans to invest in broadband infrastructure and whether it will cut investments moving forward.