There is no evidence that Big 3 acting as fiber wholesalers would hurt smaller providers: CRTC

The CRTC has denied a request by Bell Canada and some independent Internet providers for an expedited ruling that would prevent the big carriers from using rivals’ fiber networks to deliver their services to customers.

The regulator said the application, submitted in March, “did not provide sufficient evidence of irreparable harm”.

CRTC Secretary General Marc Morin delivered the response in a letter Friday to the coalition, which also includes TekSavvy, Eastlink, Cogeco Communications Inc. and Canada’s competitive network operators.

The companies had argued that giving Canada’s big three Internet operators, including Bell itself, access to each other’s fiber networks would threaten the viability of independent Internet service providers.

“However, they do not provide sufficient evidence to support these statements,” Morin wrote.

Last November, the CRTC issued an interim ruling requiring Bell’s parent company, BCE Inc. and Telus Corp., to provide competitors with access to their fiber networks in Ontario and Quebec within six months. This means that independent telcos could pay to use these networks to provide fiber service to their customers.

The decision was intended to spur competition for Internet services in Canada’s two largest provinces, where the CRTC said Internet competition has suffered the most in recent years.

The rules came into force on Tuesday, but apply only temporarily as the regulator is in the midst of a wider review of internet competition.

He has said his consultation, which included a five-day hearing in February, could make those temporary rules permanent and applicable to other provinces under a wholesale national framework.

Morin said the regulator expects to make a final decision on wholesale fiber access later this summer.

“The implementation of the temporary mandate … will result in greater competitive choice for Canadians,” Morin said.

“This benefit to the public outweighs any potential harm identified by the applicants that could result during the short period of time until the commission makes its final decision.”

Bell has vehemently opposed the CRTC’s interim decision, seeking to overturn it since it was made.

He has previously accused the CRTC of “predetermined” outcomes related to its Internet review, saying the commission’s current direction reduces Bell’s incentive to continue building its fiber network.

It responded to the interim ruling by cutting $1.1 billion in network spending plans through 2025. It also partially blamed the regulator’s initial decision when it announced it would cut nine percent of its workforce earlier this year.

In February, the Federal Court of Appeal rejected Bell’s request to stay the interim decision, but said it would hear the company’s appeal. Bell is also awaiting a decision from the federal cabinet, which he asked to review the regulator’s move.

During the CRTC hearing three months ago, Bell executives proposed multiple conditions, should the CRTC expand the wholesale internet regime, to help mitigate the potential negative effects it would face.

This included restricting the eligibility of national wireless carriers Bell, Rogers Communications Inc. and Telus to sell Internet over fiber networks built by its rivals.

Bell representatives argued that without such restrictions, the bigger players would become increasingly dependent on others’ existing networks rather than investing in expanding their own. While it would theoretically benefit from this deal, the company joined smaller players in arguing for it.

“Allowing incumbents to be resold to the other networks will permanently distort Canada’s Internet market in favor of the large carriers and come at the expense of smaller Internet providers,” Bell spokeswoman Jacqueline Michelis said Tuesday. in a statement.

“We hope the CRTC’s final decision this summer creates incentives for Bell to continue investing in network expansion that connects more Canadians to high-speed fiber Internet wherever they live.”

Noting the “divergent views on this issue,” Morin declined to comment on the question of eligibility for wholesale access “in isolation.” He said in his letter last week that it would be “inappropriate” to do so when this point “is so closely linked with other issues” in the ongoing consultation.

“The commission reiterates its previous statement that the access established through the temporary mandate may differ from the final decision,” said Morin.

“Therefore, any provider planning to use the temporary mandate should assess the risks of doing so.”

CNOC chairman and president Paul Andersen said the CRTC’s response runs counter to its stated intent for its wholesale review, which “was to ensure that independent Internet service providers can compete with the big operators”.

“By rejecting this request and allowing the big carriers to sell networks to each other and bundle wireless services, Canadians will see less competition for high-speed Internet services,” he said in a statement.

Some independent Internet companies have emphasized the importance of wholesale access to their operations.

TekSavvy’s vice president of carrier and regulatory affairs Andy Kaplan-Myrth previously called the CRTC hearing on the matter the most critical regulatory proceeding for TekSavvy ever.

He told commissioners earlier this year that TekSavvy has lost more than 100,000 subscribers since its peak in 2019 amid an unfavorable regulatory environment for wholesalers.

“The Big Three have an unfortunate history of predatory pricing to undercut wholesale competition,” Kaplan-Myrth said in a statement.

“Without rules to protect against that, we see no reason why they won’t continue to do that when it comes to fiber.”

This report by The Canadian Press was first published on May 7, 2024.

CTV News is a division of Bell Media, part of BCE Inc.

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