Providers debate wholesale fibre access in rural areas at CRTC hearing

To bring affordable internet and consumer choice to rural communities, the CRTC must mandate aggregated wholesale fibre access to incumbents’ networks, stated several internet service providers (ISPs) to the CRTC on Tuesday. During the second day of the regulator’s week-long hearing – reviewing the wholesale high-speed access (HSA) framework – presentations were heard from Xplore Inc., National Capital FreeNet (NCF), Build Nova Scotia, Community Fibre Company, Bragg Communications Inc.’s Eastlink, Beanfield Technologies Inc., and Saskatchewan Telecommunications Holding Corp. Aggregated fibre-to-the-premises’ (FTTP) access is critical in leveling the playing field between smaller ISPs and industry giants, especially in rural areas, said Xplore’s CEO Rizwan Jamal. Originally of the view that rural areas should be excluded from the HSA framework, the company has now changed its tune. “Part of our challenge is scale,” said Jamal, “if we want to be able to be competitive from a price innovation perspective with the incumbents over time, it is absolutely critical for us to gain scale…” Xplore’s fibre network currently serves around 65,000 homes, he said it aims to expand to over 400,000. However, the predominantly rural ISP “does not have the steady and substantial revenue of a densely populated urban market” to help fund its expansion, explained Jamal. The costs associated with rolling out fibre in rural areas are considered much higher than in urban ones. This was used as a main sticking point by incumbents in their arguments against mandating FTTP access, who said it could disincentivize or divert infrastructure investments by eating into their financial returns, leaving communities disconnected. But by excluding smaller ISPs like Xplore from having to provide wholesale access to their networks until they reach a certain size, Jamal argued the framework could solve this “scale barrier” by balancing consumer choice with investment incentives. "This will immediately accelerate investment in competitive fibre facilities beyond our cities," he said. Support for mandated wholesale FTTP access also came from Community Fibre Company, an ISP based in Lanark Highlands, a rural township outside of Ottawa. Benjamin LaHaise, the company’s founder, said he believes mandated wholesale fibre services could help address the cost challenges that startups face. "What it would do is it would open us up to being able to expand to some of these neighborhoods that are on the edge of service territories that would cost too much for us to get to on our own," he said. LaHaise criticized government subsidies for fibre expansion for going exclusively to large incumbents like BCE Inc., saying it makes competition impossible and is his chief concern. He called on regulators to ensure fair wholesale rates that account for those subsidies and give smaller ISPs affordable access to infrastructure like poles and existing fibre networks. Echoing previous statements, Eastlink executive vice-chair Lee Bragg urged caution, saying mandating aggregated access could discourage investment and argued in favour of facilities-based competition. The regional cable provider operates mainly in rural Atlantic Canada, where he said costs can be “tenfold” higher than those in urban cities. If the business case for upgrading a service area is affected by the wholesale regime, “we'll be forced to remove our facilities and stop providing service,” Bragg warned. Like Xplore, he proposed establishing an exemption threshold based on the number of homes passed by fibre as a temporary protection to recover initial fibre costs. Build Nova Scotia, a provincial crown corporation represented by VP Jonathan Veal, also urged balancing competition with incentives. He said ensuring robust rural networks requires considering each facilities-based provider's ability to "continue to invest and compete." – Reporting by Phalen Tynes-MacDonald at pcreed@thewirereport.ca.

Providers debate wholesale fibre access in rural areas at CRTC hearing

News | February 14, 2024

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Providers debate wholesale fibre access in rural areas at CRTC hearing

News | February 14, 2024

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