William Sandiford is chair of the board and president of Canadian Network Operators Consortium Inc.
In July, after a long public proceeding in which thousands of pages of economic evidence were submitted and an oral hearing was held, the Canadian Radio-television and Telecommunications Commission (CRTC) issued a landmark ruling (CRTC 2015-326) that will enable Canadian consumers to have access to the fastest Internet speeds available at affordable prices.
In a nutshell, the CRTC required the largest telecommunications companies, such as Bell Canada, to provide independent competitors access to their “fibre to the home” networks at rates designed to compensate the large telecommunications providers for the cost and risk associated with building these advanced networks.
The CRTC decided that granting competitors access to these networks was necessary in order to protect consumers and enable competition to continue to develop in the market for Internet connectivity in Canada. Make no mistake, fully fibre networks are the future. Fibre will enable consumers to access the Internet at speeds previously considered unimaginable. Download speeds of 100 gigabits per second and more are entirely possible. Fibre will revolutionize our economy and our daily lives.
However, only the large telecommunications companies in Canada, such as Bell, have the resources necessary to build these networks on a national basis. This is because for more than a century, these companies enjoyed taxpayer subsidies and protection from competition, as well as other exclusive benefits such as exclusive rights-of-way and building access, thus allowing them to grow into behemoths earning billions of dollars in annual profit. While millennials have grown up in a world of choice and competition, previous generations will no doubt remember the days when you had just one option for home phone service and making a long-distance call was something for which you needed to budget in advance. Notably, the very choice and competition in telephone services now enjoyed by millennials was introduced by the CRTC during previous Liberal government terms.
Prior to July’s CRTC ruling, we were faced with returning to the “bad old days” with regard to the fastest Internet speeds. Bell, and other telecommunications companies, were refusing to provide competitors access to their next-generation networks. The result would have been a return to the days of regional monopolies or duopolies and higher costs for consumers and businesses.
Therefore, all Canadians should be alarmed at Bell’s recent move to appeal the CRTC’s ruling to the new Liberal cabinet. Bell claims that the ruling will require it to substantially scale back investment in its fibre network and result in job losses. Reading the appeal, one is left with the impression that if the CRTC’s ruling is not overturned and competitors denied access, Bell will be mortally wounded as a viable company.
This is pure fear-mongering and an attempt by Bell to crush competitors and regain its monopoly by playing to the priorities of a new government that may not yet be fully briefed on the state of the Internet in Canada. Let’s be clear, requiring Bell to grant access to competitors, for a fee that completely compensates Bell and allows it to earn a profit, will not result in any slowing of investment in next generation networks in Canada. Bell itself has made this clear through its recent announcement of a $1.14-billion deployment of fibre in Toronto, which was made prior to the CRTC decision despite Bell being fully aware that the CRTC could mandate access to its fibre network.
If Bell’s actions in Toronto were not enough to convince the cabinet that it is bluffing with regard to the negative impacts on investment in next-generation networks, one need look no further than Bell’s parent company’s own quarterly reports to its shareholders. In its most recent quarterly report, released on Aug. 5, BCE Inc. states: “Although it is not possible at this time to assess the financial impact of Telecom Decision 2015-326, it could have a negative effect on our business and financial performance as it is progressively implemented over the next few years. However, the nature of such effect, if any, will only be ascertainable once the CRTC has completed its costing models and set the wholesale access rates to be charged by the incumbent telephone companies and cable carriers.”
In other words, out of the 55 pages in the report, BCE decided that the ruling merited only this one brief paragraph in which it indicated that there could actually be no impact on BCE’s finances at all if the rates are properly set by the CRTC, something that the CRTC is currently working on. This nonchalant attitude to the ruling contradicts the statements that Bell makes in its appeal to the cabinet, in which it claims that it will unequivocally suffer massive losses as a result of mandated competitor access.
What Bell is really doing is playing politics with affordable Internet access rates. The company is heavily lobbying politicians to remove, with the stroke of a pen, what the CRTC (the arm’s-length organization responsible for making telecom policy in Canada) decided, after two years of consultations, was best for Canadians.
If Canada’s biggest corporate entities get to decide the future of telecommunications policy, it really will be a game-changer – a game where corporate interests win and the middle class pays the price. Our new government should be careful not to be misled by a company that tells its investors one thing but the government another. The CRTC decision promotes Canadians’ best interests and should be upheld.Report Typo/Error
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