Canada's telecom regulator is considering whether to force big companies such as BCE Inc. and Rogers Communications Inc. to open their books and face more scrutiny about the costs they charge independent Internet service providers to lease space on their networks.
The Canadian Radio-television and Telecommunications Commission announced Thursday that it is holding a consultation to determine if confidential information submitted by incumbents to establish wholesale service rates should be put on the public record.
Moreover, the CRTC is signalling that it could become more rigorous about what it admits as secret information down the road. That means incumbents could face tougher questions about whether their costing information is actually commercially sensitive.
Independent Internet service providers, such as TekSavvy Solutions Inc., have long demanded more transparency around incumbents' costs and markups, arguing the prices they pay are artificially high and limit competition in the market.
That's because the wholesale rates paid by smaller firms influence consumer prices. In that regard, some smaller ISPs have started hiking residential rates in the wake of the CRTC's recent compromise decision on usage-based billing (UBB).
In announcing its new consultation, the CRTC said it is in "the public interest to obtain as full and complete a record as possible" on which to base its decisions on wholesale rates – a stance that is bound to be welcomed by consumers given the public outcry over UBB in recent years.
"Accordingly, the commission is initiating this proceeding to consider if additional cost study elements and markups should be expected to be disclosed," the CRTC said in its notice.
"The Commission notes that this proceeding does not preclude future consideration of other potential approaches to parties' access to incumbent carrier costing information."
The CRTC said it expects to publish a decision on its consultation by late October. Incumbents including BCE and Shaw Communications Inc. declined comment. Rogers, though, confirmed it would participate in the consultation and would submit its comments in due course.
For their part, independent ISPs immediately cheered the CRTC's consultation, saying they currently have no way to verify whether the wholesale costs they pay are reasonable. They also question why those prices vary so widely from incumbent to incumbent.
"We did not have the benefit of any transparency in the UBB decisions of last year and we know what that led to," said TekSavvy spokesman George Burger. "And we think that it is in everybody's interest to have a clear understanding of what forms the basis of the decisions of the CRTC in setting prices for wholesale services."
Bill Sandiford, president of the Canadian Network Operators Consortium, a group that represents smaller ISPs, echoed that view: "We believe that transparency in the process is in the best interests of Canadians and consumers as a whole because it will lead to proper pricing of wholesale services."
He added: "Independent ISPs do not expect to ride on the incumbents' networks for free. They are more than willing to pay their just and reasonable costs for the facilities that they use."
The CRTC had issued a new pricing model in November that would see smaller ISPs, which lease space on the networks of larger providers like Bell Canada, pay for the total capacity they need rather than the volume of data downloaded.
That compromise decision, however, is now being appealed by CNOC and companies including BCE, Rogers and Quebecor Media Inc.
A CRTC spokesman confirmed Thursday that the consultation is separate from that appeals' process. As a result, if the consultation results in changes to the disclosure of confidential costing information, those new rules would not apply to the current appeals process.