Reseller market is healthy, incumbents tell CRTC internet hearing

Two large incumbent telecoms told the CRTC that broadband resellers are not in a threatened position. BCE Inc. and Telus Corp. appeared at the commission’s proceedings into high speed internet access Wednesday. André Leblanc, VP pricing, revenue management and content for Bell said there is no sign that resellers are in decline. Any firms that have been sold, mostly to ILECs, opted to dispose of themselves, he argued. Legal and regulatory VP Mark Graham noted that many resellers are not using the maximum speeds currently available to them from the incumbents. He worried that the hearings would tilt in one direction. “We are concerned that the commission appears to define the success of the wholesale regime on whether it guarantees reseller market share,” he said. Stephen Schmidt, VP at Telus, pointed out that his firm was buying resellers in parts of the country where it does not have a footprint. He contrasted that with Bell, which has been purchasing smaller players in its own territory. An executive vice president with the western telecom disputed that there even is a national market for internet service. “Telus is an incumbent in our traditional serving territories in British Columbia, Alberta and a small part of eastern Quebec. We are not an incumbent in any major centre east of Alberta,” Zainul Mawji stated. “When it comes to Ontario and Quebec, Telus is a new entrant, in the strongest possible position to drive competition.” Telus does not believe that ILECs should be permitted access to other networks in their own operating region. They should be allowed to venture into other ILECs operating zones however. That brought a retort from Bell’s EVP and chief legal regulatory officer Robert Malcolmson. “If I could just add, because I must say that I thought the Telus appearance in front of you today was a tour de force performance of regulatory gymnastics,” he replied. “And I say that with respect and fondness.” The ILEC proposal was one of several recommendations the BC company had for the commission. The wholesale market should be disaggregated, it argued. If there is to be aggregated share, it should consist of fibre, cable and low earth orbit satellites. Rural and remote areas should be exempt from wholesale regulations. Bell likewise urged a restriction on ILEC access. Access for resellers should start five years after the network was rolled out, allowing facilities-based companies to recoup their investment. Capacity should be capped at 1.5 Gigabits, the eastern telecom averred. The firm is concerned that the regulator may have already made up its mind on the proceedings. Bell has announced it is scaling back the rollout of fibre to the premises (FTTP) grids in response to CRTC rulings. “The commission’s goal of prioritizing resale over network investment may be predetermined,” Malcolmson testified. “We nevertheless urge you to consider the many negative long term implications of yet more wholesale regulation of brand new FTTP networks.” The current competition regime is resulting in lower prices for internet services, he stated. He cited Statistics Canada data that showed from 2016 to 2023 internet prices to consumers declined seven per cent while inflation for the economy as a whole increased by 25 per cent. Bell is inching into the reseller market. Not only has it purchased many resellers in the past few months but the parent firm is reselling cable service in a limited number of markets. Cogeco Inc., Quebecor Inc. and Rogers Communications Inc. are to appear on Thursday. The hearings conclude on Friday with the Competitive Network Operators of Canada, the BC Broadband Association and TekSavvy Solutions Inc. on the docket. –Reporting by Paul Park at ppark@thewirereport.ca.

Reseller market is healthy, incumbents tell CRTC internet hearing

News | February 15, 2024

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Reseller market is healthy, incumbents tell CRTC internet hearing

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