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Summer 2016 Newsletter: More Fibre In Your Diet

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There will be competition in the internet market as fibre is rolled out in Canada. The Federal Cabinet recently denied a Petition to overturn the CRTC’s decision to allow competitor access to Bell Canada’s fibre network. PIAC participated in the initial hearings regarding wholesale fibre access for third parties, and also acted when Bell asked the Governor in Council to reverse the decision in a petition filed October of 2015.

In the wholesale fibre access hearings at the CRTC, PIAC and the Consumers’ Association of Canada (CAC) argued that consumers would benefit from mandated open access to the established telecom providers’ fibre lines because it would drive competition from third party providers and encourage more reasonable pricing of high-speed internet access now and into the future. Without access to those lines, many third-party internet providers would be left in the dust in terms of internet speed. The cost of building a parallel fibre network for one of the non-incumbent internet providers would be astronomical and impossible.

Bell argued that for them to build out their fibre network, they need customers to subscribe not just to their internet service, but also their TV and phone services. In their Petition, they argued that being paid for wholesale internet access only can’t make up for the potential revenue loss of signing up customers for all three of the services, which is the basis on which they are building their fibre-to-the-home network. They also stated that mandating wholesale fibre access for these smaller providers would likely cause them to scale back the building process. Whether that is true or not remains to be seen.

“We argued that Bell will continue to build because fibre-to-the-home is much faster than copper based networks. Bell has  so much content it’s producing that it can sell down those lines, so they’re going to do it anyway.” noted John Lawford, PIAC’s Executive Director. “Bell is still being paid a wholesale rate which will be breaking even plus extra on the internet connection. What they want to use it for over and above that connection is irrelevant.”

Bell has benefitted from rights and certain protections to build up their infrastructure, for example, access to rights of way so that they can afford to efficiently invest and build their fibre-to-the-home network. Smaller telecom companies simply cannot gain similar access at this point. The CRTC noted this, just as they did in the past wholesale hearing, and made a sound decision to create a competitive market for fibre speeds.

“The CRTC very clearly and responsibly consulted on the issues, and considered all of the evidence and views before it,” said Geoff White, Counsel to PIAC. “The Cabinet standing behind the CRTC, instead of second-guessing it, is the right public policy, and the best consumer outcome.”

It could take roughly a year to set tariffs for fibre-to-the-home wholesale rates, but once those are set, many additional providers will begin offering fibre speeds to Canadians. The additional competition means it won’t just be the big names setting rates, but we hope, a more competitive market.

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