Reversing the CRTC's Decision on Wholesale Internet Access: A Threat to Competition and Innovation

The Canadian government must reverse a recent CRTC decision allowing large telecoms to resell internet services on each other's networks, which undermines competition. The policy lets Canada's Big Three national incumbents access existing infrastructure built by smaller regional ISPs. If not reversed, it will lead to a less competitive market, disincentivize investment, and make Canada an international outlier.

The Canadian government is under growing pressure to reverse a recent Canadian Radio-television and Telecommunications Commission (CRTC) decision that allows large telecoms to resell internet services on each other's networks. This policy, which mandates wholesale access to existing broadband networks, has raised concerns about the potential negative impact on competition and investment in the Canadian internet ecosystem.

The CRTC's decision permits Canada's Big Three national incumbents—Rogers, Bell, and Telus—to access each other's networks, as well as those built by smaller regional ISPs often in areas the major carriers chose not to serve. This has sparked a petition from regional ISPs such as Eastlink, Cogeco, SaskTel, and the Competitive Network Operators of Canada (CNOC), who argue that the policy undermines competition and disincentivizes investment in underserved areas [1].

The policy's critics contend that it lets dominant national incumbents leverage regulation to gain even more market power. Nathan Simington, a former commissioner of the U.S. Federal Communications Commission, has warned that such a policy could chill network construction and impose significant barriers for new competitors, making Canada an international outlier in terms of broadband policy [1].

If the policy is not reversed, regional ISPs may struggle to compete against the bundled services and scale advantages of the Big Three. This could lead to a less competitive market, with fewer incentives for investment in new infrastructure. The Big Three, which already control 87 percent of the market, could further consolidate their dominance, potentially leading to higher prices and reduced service quality for consumers [1].

Moreover, the policy could have unintended consequences for the Canadian economy. A less competitive broadband market may hinder innovation and entrepreneurship, as smaller ISPs are often more agile and better positioned to serve niche markets and rural communities [2].

The Canadian government has the authority and precedent to fix this issue. The petition filed by the regional ISPs is grounded in the public record and aligns with the broader national interest. If the cabinet does not act, Canada risks becoming a negative international outlier, with a regulatory regime that fuses incumbent privilege with disincentives to build [1].

In conclusion, the Canadian government must carefully consider the implications of the CRTC's decision. Reversing the policy could help maintain a competitive and dynamic broadband market, ensuring that Canadians have more options for internet service and that investment in new infrastructure continues to grow.

References:
[1] https://www.theglobeandmail.com/business/commentary/article-crtc-wholesale-internet-access-ottawa-should-reverse/
[2] https://www.facebook.com/montreal.economic.institute/posts/forcing-companies-to-let-competitors-piggyback-on-their-infrastructure-at-regula/780752717854290/