Follow up on CRTC hearing on internet access

fibre optics smallAs many followers of Cybera's blog may recall, last year the Canadian Radio-television and Telecommunications Commission (CRTC) initiated an open review of the regulatory status and policies covering telecommunications wholesale services. It focused on the question of whether the government should mandate open access to an incumbent telco’s fibre.

Last week, the commission concluded its eight-day hearing on this issue, which featured testimony from a variety of interested groups, including Cybera.

If you are an internet user and/or active member of Canada’s technology innovation scene, you will be affected by the outcomes of this hearing. See below for Cybera’s general overview of this issue and the arguments put forward by the various stakeholder communities at the recent hearing.

Background

The CRTC review was created to look at the current state of wholesale telecommunications services in Canada. It is trying to determine whether these services (including fibre to the premises, or FTTP) should be unbundled and made more accessible to other providers. The intent is to help Canadians get better telecommunications services, including high-speed internet, by encouraging more competition among providers.

Cybera submitted a response to this review, and initiated a “call to action” to others to make their voices heard: from the smaller Canadian internet service providers (ISPs), to business incubators who are fostering new IT company development, to consumer groups. Many of these groups submitted their own responses. The resulting hearing began on November 24, 2014, and wrapped up on December 4, with all sides of the issue weighing in.

Hearing Overview

The Argument Against Regulation

The biggest argument from the larger telco’s was that mandated access to FTTP would squash new infrastructure investment. Companies like Telus and Bell say the cost of building and maintaining new fibre connections is high, and mandating access would disincentivize them from developing this infrastructure. And it would guarantee that no fibre would be rolled out in rural areas. Shaw also said it would be unfair to give competitors free access to the fibre assets for which it had paid a great deal of money.

They further argued that there is already plenty of competition between telco’s, and that the markets that don’t currently have fibre access are being offered sufficient alternatives via fixed wireless, satellite and mobile technologies.

The Competition Bureau called for further studies to be conducted into the consumer demand for FTTP, before implementing any regulations. The Bureau’s anti-regulation opinion was met with stiff questions by the panel following its testimony.

The Argument For Regulation

Independent ISPs are on the rise in Canada — a 2014 CRTC Communications Monitoring report showed that these competitors now make up 8% of the market. However, difficult access to last-mile fibre, and the costs of using incumbent networks — such as through capacity-based billing — are high and inconsistent. This in turn is forcing smaller ISPs to charge their customers more for services, such as bundled voice, internet and tv.

The Canadian Network Operators Consortium said capacity-based billing is making it very difficult to compete with the bigger providers. Independent carrier Distributel Communications also noted that telco’s are not required to treat their wholesale customers the same as their retail customers. It noted that wholesale companies may wait 10 days to get a connection from the incumbent carrier, during which time the larger telco can offer next-day service connections to win back its retail customers.

The independent ISPs called for capacity-based billing to be made transparent to promote consistent rates. They would also like to obtain disaggregated high speed services like broadband access, which would allow them to leverage existing broadband facilities, co-locations and unbundled local loops.

The Consumers Association of Canada and the Public Interest Advocacy Centre also countered the big telco argument that there is sufficient fibre alternatives in Canada, saying that there is no comparable substitute for fixed broadband.

Cybera’s Argument — Internet as a Right

Cybera’s President and CEO, Robin Winsor, said that Canada is simply too big, with a population that is too scattered, for facilities-based competition to ever work here. Rather, he suggested the CRTC focus on service-based competition that runs over fibre networks that are freely accessible to any provider.

CANARIE also spoke at the hearing, and echoed Cybera’s call for network fibre to be treated as critical infrastructure that should be put in place in every corner of Canada — an investment into the future needs of a digital economy.

See below for the full video of Robin’s testimony, or click here to read a transcript of his statement.

The Commission is accepting final written statements from the respondents until December 19, after which it will make its decision.