CRTC directs telephone giants to offer ‘workable’ fibre access to independent competitors

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Canada’s telecom regulator has directed the country’s large telephone companies to provide independent competitors “workable” access to their fibre networks in Ontario and Quebec within six months, in an effort to improve affordability and provide more internet options.

In its decision announced Monday, the Canadian Radio-television and Telecommunications Commission set interim rates for fibre internet, giving independent telecom providers in Ontario and Quebec cheaper access to Bell Canada BCE-T and Telus Communications Inc.’s T-T networks on a temporary and expedited basis.

In response to the CRTC directive, Bell said that it would reduce planned network investment by more than $1-billion in 2024-25, including a minimum of $500-million to $600-million next year. In a statement Monday night, Bell says the regulator’s decision comes “at the expense of critical network investment.”

Fibre-to-the-home rates are the prices that independent, or wholesale, internet service providers (ISP) must pay to large telecom companies to access the fibre networks that enter Canadian homes.

Internet competition has declined most significantly in Ontario and Quebec, with the number of subscribers served by independent wholesale-based competitors dropping by 47 per cent between the end of 2018 and 2022, the CRTC found. At the same time, several competitors have been bought out by larger internet providers, the regulator said.

“The CRTC is acting quickly to help stabilize the market,” the regulator’s chair, Vicky Eatrides, told the Canadian Telecom Summit on Monday.

“Our decision requires large telephone companies to provide competitors with access to their fibre-to-the-home networks within six months. The six-month period will allow companies to prepare their networks, and to develop information technology and billing systems.”

The CRTC said its decision will enable wholesale-based competitors to offer fibre-enabled services to more than five million Canadian households. By the end of 2022, 60 per cent of Canadian homes reached by large telephone companies had access to fibre networks.

Incumbents have been required to provide competitors disaggregated access to their fibre networks since 2015, but competitors have said the rates then set by the CRTC have been far too high to enable them to offer service profitably.

Incumbents have said that lower prices would hamper their ability to invest in, and maintain, their networks. The CRTC says the interim rates were chosen to give competitors a “workable way” to provide services, while also allowing incumbents to continue investing in networks.

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Some say the decision, while welcome, has come only after many of many of Canada’s largest independents were acquired by incumbents: Ebox, Distributel and Oxio all have been purchased since 2019. This past June, The Globe and Mail reported that Canada’s largest independent ISP, TekSavvy, had put itself up for sale.

“Today’s decision should be a lifeline for small ISPs, but it comes so late, most have already sunk,” said Matt Hatfield, executive director of OpenMedia, an organization advocating for widespread inexpensive internet access, in a statement.

The Competitive Network Operators of Canada, the representative body for competitive ISPs, said in a statement that the interim rates are still well above market prices.

“Until final rates that are just and reasonable are set, significant competition is unlikely to be stimulated,” said Paul Andersen, CNOC’s president and chair, in a statement.

In a statement, Telus spokesperson Richard Gilhooley said the company is reviewing the interim decision and looking forward to participating in the remainder of the CRTC proceeding.

In its statement, Bell said the CRTC directive threatens its fibre network expansion to many households and businesses in rural, suburban and urban communities.

The CRTC said it will hold a public hearing beginning next February to discuss and finalize the fibre-to-the-home rates.