Primus to lobby against Bell’s FTTH access appeal

Primus Telecommunications Canada Inc. was set to make its case against BCE Inc.’s appeal of the CRTC’s wholesale wireline decision to officials with Industry Canada on Thursday. Michael Nowlan, CEO of the independent phone and Internet service provider, said in a phone interview that “the entire competitive industry has to be looking into saying, ‘we have to respond,’ so we do need to get our points of view across within Ottawa.” “Having a pathway to access to this fibre-to-the-home is absolutely integral to the future viability of the competitive choice industry,” he said. “If they go back on this, we will essentially be moving back to what’s ultimately a monopoly or a duopoly in those services.” Nowlan added: “It’s very important to get our voice heard on this, so yes, there will be government relations activity, public relations activities. It’s just too important an issue, I believe.” Last week, Bell asked the federal cabinet to reverse mandated access to fibre-to-the-home (FTTH) networks that the CRTC imposed this summer in its decision on the wholesale wireline proceeding. Nowlan said that Bell already made many of the same arguments it put to cabinet during the proceeding and the CRTC has already considered those points in making its decision. “The CRTC spent two years of people making submissions — detailed, lengthy, complex positions,” leading to a public hearing. “The CRTC deliberated on it and came out with their position, and they’ve heard these.” In the document filed last week, Bell argued that FTTH will stop or delay investment “for years” in areas of the country where the investment required wouldn’t be justified by the possible return. Nowlan noted that Bell CEO George Cope said during the company's second-quarter earnings conference call, following the CRTC’s decision, that investment in fibre is “table stakes.” “Any common interpretation of that is you have no choice. If you’re going to be in the broadband business, you need to have fibre,” he said. “To come out and suggest that they’re not going to make the investment flies in the face of their own words, in my opinion.” He said fibre-to-the-node alone can’t complete with speeds cablecos can offer through DOCSIS, which is another reason he doesn’t “buy the dampening-of-investment thesis.” Bell spokeswoman Jacqueline Michelis said in an email Wednesday that the CRTC's decision on wholesale access to fibre-to-the-home networks "makes the return on broadband investment in smaller markets unattractive for any company. In Bell’s case, we would have to significantly delay or stop investment altogether in rural towns and remote locations." She said that following a CRTC's decision in 2010 to require wholesale access to fibre-to-the-node networks, Bell's investment in such technology resulted in the connections of 400,000 fewer homes than originally planned. In its appeal to cabinet, Bell said that the CRTC this year “unfairly” changed the rules in a move that is contrary to “Canada’s longstanding policy of facilities-based competition." It argued that it and other telecom companies relied on a decision the CRTC made in 2008 and reaffirmed in 2011, which did not mandate access to FTTH, in order to make long-term decisions on capital investment. Nowlan asked, if the July decision caught Bell by surprise, why the company still went ahead with announcements about building out fibre networks after that. “The regime, the construct, the philosophy behind the fibre-to-the home access for competitive resale is no different than what’s been allowed in all the other regulatory regimes,” he said. “So it’s a consistent regulatory framework, just applied to the new technologies. … There’s nothing inconsistent in any of it.” Bell also argued that rules designed for legacy copper networks shouldn’t apply to FTTH networks that must be built from scratch, because while the company has been an incumbent “in communications services delivered over legacy copper networks” since 1880, fibre is different. All ISPs wishing to offer FTTH start from the same point because such builds don’t use any legacy components, the company said. Nowlan responded that “the single largest barrier in this area today is access to the capital to be able to make these investments,” and incumbents like Bell have the advantage “of upwards of a century of monopoly that allowed them to build a capital base that allows them to access capital at a far cheaper price than any other alternative out there.” He added that cable companies have had “de facto monopolies in their areas” for decades. “Capital is a major advantage that still is flowing from that century-long monopoly that they had,” he said, adding that “there’s still all sorts of advantages in the rights-of-way and the existing infrastructure … they’re still building upon the historical legacy advantages that they’ve had.” The uncertainly of not knowing what the rules will be in the meantime has an impact, Nowlan said. He noted that the new federal cabinet hasn’t even been named yet, which is scheduled to happen on Nov. 4. “Even if there was a desire to address this quickly, you’ve got to have some people in the seats first, and then they’ve got to be briefed,” he said. “Primus has business plans it wants to execute upon,” and the delay “is buying another year of delay in this process.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Primus to lobby against Bell’s FTTH access appeal

News | October 28, 2015

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Primus to lobby against Bell’s FTTH access appeal

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