New aggregated wholesale rates ‘fair,’ ‘reasonable’: smaller ISPs

Wholesale-based ISPs are praising a decision by the CRTC to lower the rates they pay for wholesale access under the aggregated regime, though whether the regulator will issue a similar decision for fibre-to-the-home networks remains to be seen. President of the Canadian Network Operators Consortium (CNOC) and CEO of Distributel Communications Ltd. Matt Stein said in a phone interview with The Wire Report that the “final rates enshrine fair rates for Canadian broadband.” The CRTC said in a press release that capacity rates under the old aggregated regime will be 15 per cent to 43 per cent lower than the interim rates currently in place, while access rates will be three per cent to to 77 per cent lower. “The Commission considers that the final rates will facilitate greater competition and promote innovative broadband services and more affordable prices for consumers,” the CRTC said in its decision, issued after the markets closed on Thursday. The new rates are retroactive to 2016, when the CRTC said that the wholesale rates that were then in place were not “just and reasonable.” It lowered the rates a few months later. It said Thursday that the “final rates announced today are lower than the interim rates” from October 2016, and retroactive to March 2016 for nearly all companies. The new tariffs apply to the aggregated wholesale regime, with the final rates on the newer disaggregated regime coming at a later time, the CRTC said. The regulator introduced the disaggregated regime, which includes access to fibre-to-the-home networks, back in 2015, with the idea of transitioning the industry towards it. But while that newer regime was initially welcomed by wholesale-based ISPs, a year ago they said it had turned out to be so unworkable it amounted to an existential crisis. The old aggregated regime -- which doesn’t include FTTH access -- was then given a new lease on life, with the CRTC temporarily eliminating a speed cap it had placed on the service that could be sold through the old regime, a measure meant to encourage providers to switch to the newer wholesale system. Incumbent telecoms are appealing the decision to lift the cap. “Time will tell,” Stein said in response to a question about the outstanding rates for the disaggregated regime. “There’s still a lot more to be written on that one, but the good news now is that these have finally been brought to a fair point.” TekSavvy Solutions Inc.’s vice-president of regulatory affairs Andy Kaplan-Myrth said that the new rates would improve competition. “TekSavvy has been ringing alarm bells about this for years and today, after a lengthy process, the CRTC set realistic final rates that will allow wholesale-based providers to effectively compete,” he said in an emailed statement, adding that the decision is “one important step toward a fair framework.” In an emailed statement, OpenMedia executive director Laura Tribe said that the CRTC decision “is a much overdue step towards lowering the bar for smaller ISPs to provide affordable Internet access in Canada.” “While today’s decision still does not does not address the outstanding need for fibre wholesale rates that Canadians have been waiting to gain access to since the CRTC’s 2015 decision, hopefully this paves the way for more affordable rates to come,” Tribe said. Canadian Internet Registration Authority (CIRA) CEO Byron Holland also praised the decision in an emailed statement, adding: “Going forward, we hope the CRTC will work quickly to set the final wholesale rates for next-generation fibre-to-the-premises (FTTP) facilities so that small providers are not left out of the race to sell Canadians fibre internet access.” Late Thursday afternoon, a spokesperson from BCE Inc. said in an emailed statement that the company was ”assessing the impact of the decision and our next steps,” but declined to say whether or not the CRTC had struck the right balance with the decision. A Shaw Communications Inc. spokesperson declined to comment on the new wholesale rate regime, while Rogers Communications Inc. and Quebecor Inc. didn’t immediately respond to a request for comment. — With reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and reporting and editing by Anja Karadeglija at akarad@thewirereport.ca

New aggregated wholesale rates ‘fair,’ ‘reasonable’: smaller ISPs

News | August 15, 2019

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