Ottawa Upholds CRTC Wholesale Internet Rules Amid Telecom Pushback

Canada's telecom regulator, CRTC, upheld a ruling that allows incumbents to resell internet over each other's networks. Industry Minister Mélanie Joly backed the decision, stating it would contribute to the government's mandate to bring down costs for consumers. However, major carriers such as Rogers and Bell have opposed the policy, warning it could harm investment and competition in the long term.

The Canadian Radio-television and Telecommunications Commission (CRTC) has upheld its decision to allow major telecom providers to resell internet services over each other's networks. Industry Minister Mélanie Joly has backed this policy, stating it will contribute to the government's mandate to reduce costs for consumers. However, this decision has sparked opposition from major carriers such as Rogers and Bell, who warn it could negatively impact investment and competition in the long term [2].

The CRTC's ruling, which allows incumbents like Bell, Telus, and Rogers to re-sell internet services on existing fibre networks built by others, has been a contentious issue. Bell, in particular, has been vocal about its displeasure, arguing that the policy discourages major providers from investing in their own infrastructure. The company has already slashed $500 million in investment plans this year in response to the policy [2].

Bell's President and CEO Mirko Bibic expressed his disappointment with the government's decision to uphold the CRTC's ruling. He emphasized that the policy does not fully compensate network builders for the significant build costs and investment risks they undertake. Bibic also highlighted that the policy could lead to a reduction in competition and higher prices for consumers [2].

Rogers, another major carrier, has also criticized the decision. Sarah Schmidt, a spokeswoman for Rogers, called it "a shocking reversal from the federal government’s principled position less than one year ago." She warned that the policy could result in cuts to capital investment, a loss of network construction jobs, and reduced competition, ultimately leading to higher prices for Canadians [2].

The CRTC's policy has also drawn legal challenges. Cogeco Inc. and Eastlink have filed an appeal at the Federal Court of Appeal, arguing that the policy is detrimental to consumers and the broader Canadian economy. Cogeco president and CEO Frédéric Perron stated that the current approach undermines choice and affordability, halting crucial innovation and investment [2].

Despite the concerns raised by major carriers, the CRTC maintains that its framework balances the need for both competition and investment. The regulator has said that the policy will immediately allow for more competition on existing networks [2].

Bell's fibre network expansion has hit a standstill in Canada, but the company sees growth potential south of the border. Last week, Bell closed a $5 billion deal to buy U.S. fibre internet provider Ziply Fiber, expanding its fibre footprint into the U.S. by 1.4 million locations. The acquisition will enable Bell to reach up to eight million total fibre passings in the U.S. through its partnership with Network FiberCo [2].

The CRTC's decision to uphold its wholesale policy has significant implications for the Canadian telecom industry. While it may contribute to lower consumer costs in the short term, it could also lead to reduced investment and competition in the long term. The industry will closely monitor the impact of this policy and the potential legal challenges that may arise.

References:
[1] https://www.offshore-technology.com/news/fluor-jgc-jv-feed-contract-lng-canada-phase-2/
[2] https://www.castanet.net/news/Business/565423/Bell-s-fibre-footprint-to-plateau-after-Ottawa-sticks-with-CRTC-s-wholesale-policy