AOL Canada tests high-speed Internet access using Regional’s cable network

A pilot project underway in the small Ontario town of Sturgeon Falls could force other cable operators to begin sharing their high-speed networks with Internet service providers (ISPs) and other competitors. Regional Cablesystems Inc is breaking ranks with its cable brethren through a deal that sees AOL Canada delivering its service over the cable operator's coaxial network to about 100 customers in the small community of 6,000 residents. The trial began April 10. AOL Canada says it's the first time in Canada that any company — other than a cableco — has been able to provide broadband Internet over a cable-owned network. Trial participants receive the cable modems and required software at no charge, and pay only for AOL Canada's standard service. "We can roll out the service anywhere that Regional Cable has two-way services," Ian Hembery, AOL Canada's VP marketing, said in an interview with Canadian Communications Reports. Regional currently offers interactive digital service in Sudbury and Timmins. It operates cable TV systems in about 1,100 non-urban communities throughout western Canada, Ontario, Quebec, and Newfoundland. The trial comes at a difficult time for Canada's large cable operators. The Canadian Association of Internet Providers (CAIP) is putting pressure on the CRTC to honour a September 1999 ruling that ordered cable operators to begin reselling their high-speed Internet service to third-party ISPs on December 13 — Telecom PN 99-11 (CCR, Sept. 15/99). The deadline came and went, and still no access agreements have been reached. Cable operators claim there are still technical and costing hurdles to overcome before third party access can be provided. CAIP disputes the claim, and has fired off several letters to the CRTC demanding an expedited resolution to the impasse. Its most recent complaints against Canada's largest cable operators are detailed in two separate letters filed April 4 with the commission. The terms, conditions and rates for access as proposed by the cable industry are among CAIP's biggest concerns. Hembery says AOL Canada's trial with Regional is demonstrating that third party access is both financially viable and technically possible. "The large cable companies have been indicating that it's technically difficult, if not impossible," he notes. "That's why other people can't buy wholesale access from cable companies." AOL Canada views the Sturgeon Bay trial as an opportunity to get a head start in resolving any complications that may arise, in preparation for the day when cablecos will have no choice but to open their networks. "We want to make sure that, when open access does open up with the cable companies, we can get going and provide a competitive service with those offered by the cable companies," says Hembery. Sleeping with "the enemy" Negotiations between AOL Canada and Regional Cablesystems began late last year. Sturgeon Falls was chosen as the test area because of its proximity to one of Regional's main offices in North Bay ON. As well, the community has a large number of retired people, a fast-growing market for the Internet in Canada. Regional decided to partner with AOL Canada, rather than offer a consumer Internet service of its own, explains Hembery. "Their strategy is to be a wholesale supplier of access to companies like us. So it's the perfect marriage between two companies that know their own niche." Regional isn't known for following the pack when it comes to cable industry solidarity. It's not a member of the Canadian Cable Television Association, and is not averse to doing deals with rival telcos. On March 17, Regional confirmed that it is in talks with St. John's NF-based NewTel Communications Inc "to explore the viability of jointly expanding cable television and other broadband communications offerings throughout Newfoundland and Labrador".

AOL Canada tests high-speed Internet access using Regional’s cable network

Broadcast | April 27, 2000

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