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Konrad von FinckensteinPawel Dwulit/The Canadian Press

Canada's telelecom carriers must share their expensive fibre-optic networks with wholesale resellers and provide to them the same Internet speeds that they do to their own retail customers, the CRTC has ruled.

The decision is a blow to Canada's entrenched telcos, which had appealed an earlier version of the Canadian Radio-television and Telecommunication Commission's decision to the federal cabinet, it may alter the expansion of advanced networks across the country and into rural areas.

"The cabinet's decision was a message to the commission that they wanted investment, first and foremost," Michael Hennessy, Telus Corp.'s senior vice-president for regulatory and government affairs, said Monday.

The CRTC decision, he said, is based on a "wrong" assumption that telcos will continue to invest despite having to share more advanced networks. Mr. Hennessy said that although this may be the case in cities, where telcos are building out Internet-based television (IPTV) to fight the cable companies, it will not be the case in rural areas, because returns on those investments are now even more uncertain.

Smaller Internet service providers (ISPs) applauded the CRTC's reassertion of its original position, though some expressed concern about the telcos' new ability to charge 10 per cent more than they did before. It is unclear how much money this will involve for the much smaller resellers.

"This was a good thing to a certain extent," said Rocky Gaudrault, chief executive officer of TekSavvy Solutions Inc., a reseller based in Chatham, Ont. "As far as what comes next ... it will be curious to see what the schematics of the pricing will be."

In a dissenting opinion to Monday's decision, commissioner Timothy Denton said it was a good ruling but does not go far enough. "The Commission has not seen fit to agree with the large carriers (cable and telephone) that the time has come to put an end to the leasing of parts of the networks owned by the large carriers, despite eloquent pleas by them to do so," Mr. Denton wrote. "It has, by the same decision, not approved the means necessary for smaller ISPs to compete effectively."

In the proceedings that led up to the decision, telcos argued that the current regulatory system favoured cable companies, because smaller ISPs preferred to hook into the phone company networks. The CRTC attempted to rectify this by ordering cable companies to make it easier for ISPs to share, but Rogers Communications Inc.'s senior vice-president for regulatory affairs, Ken Engelhart, said he is unclear what exactly the commission wants the cable companies to do.

Another appeal to cabinet is still possible. Telus said it is mulling further action and a spokesperson for Industry Minister Tony Clement said another review remains possible. "Because the decision by the CRTC can be reviewed by the Governor in Council, it would be inappropriate to comment further," the spokesperson said in an e-mail message.