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CRTC Wholesale Decision

 

On July 22, 2015, the CRTC issued its decision on wholesale wireline services and associated policies (Telecom Regulatory Policy CRTC 2015-326).  The decision was a significant win for competitive telecommunications service providers and smaller ISPs.  The CRTC sided with competitors on two of their most significant positions:

  • Mandated Disaggregated Internet Access – the current wholesale model for Internet access is aggregated.  This means that competitors must pay a tariffed rate for wholesale Internet access, which includes a fixed fee access component and a transport component – for the transport leg from the incumbent end office/head end to the competitor’s Internet gateway.  The transport component is based on data traffic carried.  What competitors have found in recent years is that data used per customer has skyrocketed, so using an aggregated model has meant that the cost of this wholesale service has increased greatly and it would soon be unprofitable.  The disaggregated model will allow competitors to only order the access component and it would be responsible for transporting the traffic from the end office/head end.  This model particularly helps competitors that have already developed a transport network, such as Primus Canada.  Bell Canada and other incumbents argued strongly against this model.  However, the CRTC ruled in favour of the competitors on this point and this should be enable competitors to strengthen their position as  ISPs and support them to be able to offer television services over the Internet (something that could effectively done under the aggregated model).
  • Mandated Access to Fibre to the Premises – currently, the ILECs do not have to provide the home fibre services (i.e. their Internet services that offer speeds of 100 Mbps or greater) to competitors.   Competitors strenuously argued that home fibre services needed to be mandated otherwise their own service offerings would be inferior, especially as the consumer take-up for higher speed services grows.  The incumbents argued against mandating fibre to the home, arguing, among other things, that mandating access would curtail their investment incentives.  Again, the CRTC sided with competitors and accepted their argument that mandating access to fibre would not dis-incent them from investing in fibre because otherwise they would fall behind the cable Internet network (which now has comparable download speeds to fibre).

 

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