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Recent CRTC decisions highlight independent streak

Konrad von Finckenstein, chairman of the CRTC

Sean Kilpatrick

The CRTC seems to have got its mojo back.

The last two days, certainly, have been full of regulatory swagger - a strut straight out of Gatineau, QC., where the Canadian Radio-Television and Telecommunications Commission has apparently started firing policy from the hip; industry titans and politicians be damned.

On Monday, the CRTC reaffirmed a decision the federal cabinet - after furious appeals by Bell and Telus - had thrown back at them. The decision, contrary to the wishes of the big telcos, ruled that the ISPs must provide the same download speeds to wholesale resellers (like TekSavvy) that they do to their own customers.

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That means, you may soon be able to go to TekSavvy and other resellers and order service at more than the 5 Megabits-per-second that they currently offer. But here's the rub: While the telcos offer nice download speeds - up to 25 Mbps - they usually cap the amount of data a customer can download and upload and then charge a fee for users who go over the cap. Bell's $52.95 Fibe25 service, for example, offers 25Mbps speed but users are allowed only 75 Gigabytes of bandwidth per month. For another $5 you can add 40GB more. Go over that 115GB and it'll cost you.

Techsavvy, on the other hand, offers two high speed Internet services, both of which limited to speeds of 5Mbps: 200 GB/month bandwidth for $31.99 a month and an unlimited plan for $39.99 a month.

Now imagine a 25Mbps service with unlimited bandwidth. Even if it's priced higher than existing telco plans, users might still see huge value in blazing speeds with no bandwidth cap.

You can see why Bell and Rogers might not want that.

As an added insult, the regulator ordered the telcos to share their new fibre optic networks with the resellers as well, despite the fact that telcos swore they wouldn't invest and expand networks into rural areas if the regulator ruled so - since sharing the networks reduces the returns on hefty network investments.

Then came Tuesday. The dust, of course, hadn't even settled from the ignominious day prior, when, Blam!, the CRTC ordered the telcos to rebate $311-million to consumers, something the telcos had resisted and consumer groups had pushed for (since the monies were coming from a fund made up of mandated overcharges to stimulate competition).

They also ruled that the telcos must spend the remaining money in the fund, $421-million, for expanding rural broadband. But, against Bell's demands, they said the company's HSPA+ wireless broadband network simply wouldn't do since it was not comparable to services the company offers in urban areas, and that it would have to be wired DSL (Digital Subscriber Line) Internet, which one guy from Bell told me was a decision rooted in 2005 thinking.

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This morning, Bell sent out a fiery press release saying that the federal government was abandoning its rural citizens - which, if any didn't notice, were the ones who voted the Tories in (which is why the only two Conservative politicians in my Twitterfeed are constantly tweeting from corn roasts, I think).

"Considering the federal government's commitment to ensuring Canada's leadership in the digital economy and its strong support for intensified investment in the latest broadband technologies, this is quite frankly a shocking decision by the CRTC. It's a clear opportunity missed, and it perpetuates the digital divide between rural and urban Canada," Bell's CEO George Cope is quoted as saying in the release.

Of course, most of us are used to watching the CRTC - which, despite what some may say, is still a useful and necessary regulator - flail around as it deals with Ottawa's politicians. The CRTC had its Globalive/Wind Mobile decision tossed out by the government. It had the next-generation network sharing agreement (mentioned above) thrown back at it, too. And Industry Minister Tony Clement publicly contradicted CRTC chairman Konrad von Finckenstein on whether the liberalization of foreign ownership can be done without touching the broadcasting act.

"Recent history has shown that this government is prepared to overrule the CRTC," Dvai Ghose, an analyst at Toronto's Canaccord Genuity, told me back in May.

Mr. von Finckenstein's very appointment all these years ago was itself a sign the Prime Minister wanted a more free market-minded telecom regulator (which, essentially, means a more impotent one). Now, as one of my Globe colleagues has recently written, he might even be moved.

But now, lo and behold, the CRTC rises again! What this means before October hearings into whether high-speed broadband Internet should be considered a "basic service" like home phone and dial-up Internet is something some very important people are likely pondering.

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Will wireless be sufficient or will Bell and Telus (or Rogers) be forced to string cables into remote communities, grumbling the whole time since there's no money to be made there? It will be interesting to find out.

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