Small ISPs laud government denial of Bell’s FTTH appeal

Independent Internet Service Providers (ISPs) and advocacy groups said Wednesday they’re encouraged by the federal government’s rejection of BCE Inc.’s appeal of the CRTC decision mandating wholesale access to fibre-to-the-home (FTTH) networks, which could be the first glimpse into the new Liberal government’s telecom policy. The denial of the appeal to cabinet petition is a “very positive signal for consumers to let them know that this new government is serious about both maintaining telecom competition, but also about respecting the CRTC’s role and expertise,” Bram Abramson, TekSavvy Solutions Inc.’s chief regulatory officer, said in a phone interview. John Lawford, Public Interest Advocacy Centre (PIAC) executive director, said in a phone interview that “it’s encouraging in the sense that they seem to have read and considered everything, and to have looked at the Internet market as probably the most important enabler of the digital economy.” Navdeep Bains, Minister of Innovation, Science and Economic Development, said in a Wednesday morning statement that the CRTC decision last July to allow smaller Internet service providers (ISPs) access to existing infrastructure meant the commission has “updated its regulatory approach to keep pace with changing technology and consumer demand.” The statement added: “The decision strikes the right balance between the private sector having incentive to invest and consumers having a competitive choice.” Distributel Communications Ltd. CEO Matt Stein pointed to Bains’ statement, which highlighted wholesale broadband as a “proven regulatory tool for enabling retail competition in the Internet service market,” and said in a phone interview that it signalled “that this government clearly recognizes the value that the wholesale market plays in creating competitive choice.” For the company’s subscribers, Stein said the decision “means stable access to the latest and greatest technologies so we can continue to offer competitive choice to our customers.” But Ken Engelhart, former vice-president of regulatory affairs for Rogers Communications Inc. and principal of his eponymous law firm, said the appeal “never had much chance” and that he wouldn’t put much stock in the decision indicating much about the government’s policy direction. “If you recall, under the last government, when the CRTC tried to impair the prospects of the wholesale ISPs, there were 400,000 emails to the minister who tweeted out that if the CRTC doesn’t change their position, he’ll change it for them,” Engelhart said, referring to former industry minister Tony Clement’s public push for the CRTC to review its 2011 usage-based billing decision. “So I think any government is going to be concerned about that many voters who are happy with a decision.” Traditionally, Liberal governments are seen as being more willing to intervene in the market than Conservative governments, Engelhart said. “But in telecom, you had a Conservative government, which was very interventionist and introduced a whole lot of new regulations,” he said, adding that he thinks the Liberals are likely to be as interventionist as the previous government, and that he doesn’t see any major trends towards deregulation coming. Bell launched its appeal days after last fall’s election, calling the CRTC’s July decision “surprising” and arguing that mandating access to its fibre infrastructure would delay and decrease investment and fibre deployment, with smaller and more-remote communities to be the hardest hit. The warnings about lagging investment were empty threats, said Lawford, citing a need to compete with other large providers and for Bell to upgrade its own infrastructure just to support its broadcasting content. Bell and other incumbents also made it clear during the CRTC’s three-week proceeding on basic telecom services that the investment to rural and more-remote areas wasn’t happening anyway, he said. During his appearance before the commission’s panel, Ted Woodhead, Telus Corp. senior vice-president of federal government and regulatory affairs said “there may be pockets of this country that may never be served, frankly.” “The attitude is: if there’s not a return, if there’s not a business case, as they call it, for building in rural areas, they were saying they’re not going to build it without a subsidy. They’re not going to build it. So how does that reconcile if their position is ‘we’re going to slow down building out to rural and remote areas if we have to share it?’” Lawford said. “They just said they’re not going to do it unless they can make a return on each one of those lines.” The government had until July — one year from the original decision — to make its ruling on the appeal. In light of the government’s decision, Bell will “abide by the rules and move forward,” company spokeswoman Jacqueline Michelis said in an email. CRTC spokeswoman Patricia Valladao said in an email that the government’s ruling was clear. “The government has decided to uphold the CRTC’s decision based on a fulsome record,” she said. “Our decision was made to give Canadians access to more choice, innovative services and reasonable prices, so that they can fully leverage the benefits of the broadband home or business. The government’s decision supports our approach.” The government’s decision may also point to more deference to the CRTC on regulatory issues, instead of sticking its fingers in too many pies, Lawford said. “In terms of how to stimulate broadband roll out and otherwise create a national policy for how Internet will work in the country and what level we all need, that’s now the job that I think they’ve bought themselves a more narrow mandate, which is probably helpful because if the government thinks they’ve got to solve all the problems, including the regulatory problems, they’re going to be distracted,” he said. Though the decision is encouraging, it’s just one step on a long road, noted Abramson. “The CRTC is certainly continuing to move forward with the framework whose broad lines are sketched out in the decision” that Bell’s petition sough to overturn, he said. “But at the same time, those broad lines really do need fleshing out in very specific detail. The commission has been embroiled and continues to move forward in a whole bunch of proceedings that are helping sketch out what telecom competition looks like when broadband and Internet rather than voice and the public switch telephone network are at its core.” Among those are the CRTC’s review of wholesale high-speed Internet rates small companies pay to larger ones and a court challenge, also spearheaded by Bell, over a CRTC decision on zero rating. “There’s an elaborate pivot taking place from voice to broadband and to Internet as the centre of competition and that will not happen simply,” Abramson said. “It’s important to get it right and it’s important to recognize that it’s a matter that’s full of issues and micro issues to be solved.” While the decision on the appeal removes the “sword hanging over the whole process, which threatened to descend at any time and cut people off at the knees or otherwise,” Abramson noted that how the dust settles around those details will determine the future of wholesale network access. “If they get it right, we could see a very competitive market emerge and very strong competitors to TekSavvy and to incumbents, and so on, emerge,” he said. “If they don’t get it right then it will continue on as a marketplace that’s really dominated by historic incumbents with newer players continuing to be relegated to the sidelines — still in the game but with both hands kind of tied behind their back.” — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Small ISPs laud government denial of Bell’s FTTH appeal

News | May 11, 2016

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Small ISPs laud government denial of Bell’s FTTH appeal

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