Aggregated access to FTTP needed for independent ISPs, CRTC told

The crisis in competition when it comes to internet connectivity is longstanding and will only get worse, a CRTC panel heard. The commission held its final day of a week-long proceeding Friday. Bob Allen, president of the BC Broadband Association, read a statement into the record in his opening remarks. “Plainly speaking there are virtually no new entrants in the market, and due to mergers and acquisitions along with financial distress and insolvency, the number of existing competitors will continue to diminish,” he said. “The stronger, more adaptive ISPs will be the ones that survive and continue to provide choice to consumers. They will need the commission to ensure a level playing field if they are to have any chance of competing against the market forces of today’s telecom giants.” He then revealed he was quoting himself from a hearing 10 years ago. The only thing that has changed is that incumbents are now gaining market share in areas where they previously did not have a footprint. “We believe the commission must limit the market power of incumbents if independent competitors are to continue to exist,” Allen stated. “While there appears to be benefits to Canadians in the short term by allowing national mobile providers to access mandated wholesale pricing in that they can obtain home internet services at a relatively affordable price, it is unlikely that these prices will remain in the market once the remaining competitors are driven from the marketplace.” He was preceded by the Competitive Network Operators of Canada. It pointed to some good news in the sector but warned about a dire future. “Despite these successes, the lack of regulatory certainty has meant the affordability and competition crisis in Canadian telecom remains a pressing issue for the people and businesses of Canada,” president Paul Andersen testified. “Fortunately, we have a path forward. The commission must maintain its current trajectory towards a more open and competitive telecom sector in Canada by mandating aggregated wholesale access to incumbent‑owned fibre‑to‑the‑premises (or FTTP) networks.” He said the current situation leaves one to conclude one of two things. Either the incumbent local exchange carriers (ILECs) are using below cost pricing to an anticompetitive effect or the current wholesale rates are too high and must be lowered. “Unless the commission acts swiftly to address the lack of functional wholesale fibre access cited in its previous decision, independent ISPs risk irrelevance as incumbent market power continues to fester,” he said. “Decisive regulatory intervention is required to end the crisis and maintain independent ISPs as viable competitors.” Pierre Aube, COO of TekSavvy Solutions Inc., spoke during the afternoon session. He told the panel how precarious the situation is for small players. “TekSavvy itself has shrunk significantly in recent years due to the current regulatory environment. I’ll be frank here, we have lost over 100,000 subscriptions since our peak,” he noted. Aube listed several independent ISPs that had been bought by ILECs over the past few years. The company’s VP of regulatory and carrier affairs, Andy Kaplan-Myrth, cited statistics from the Competition Bureau to bolster the firm’s argument. “ILECs have seen their own subscriber numbers increase,” he stated. “The bureau found that the ILECs’ increase in retail subscribers from 2018 to 2022 was large enough to offset the decline in wholesale‑based subscribers on their network.” Kaplan-Myrth said ILECs are in the process of replacing their copper networks with FTTP grids. This currently means customers are left with fewer options for internet service. Aube reported that TekSavvy has rolled out its own fibre network in its home territory of Chatham-Kent, Ont. but has abandoned plans to expand beyond that region. The COO said incumbents frequently use independent ISP connections to bolster their numbers ahead of quarterly reports. The off-tariff agreements are limited, he added. “I make the calls out all the time to try and see if we can negotiate some deals, to try and get things running for better rates. And it’s a very one‑way street, as in it’s them that will offer whatever they feel they need to, most of the time, hit the quarter numbers that they’re trying to achieve,” he averred. “So, you know, I’ll get the call, ‘Pierre, hey, can you get an extra 2,000 subs this quarter, and then we’re going to offer you this offer.’” –Reporting by Paul Park at ppark@thewirereport.ca.

Aggregated access to FTTP needed for independent ISPs, CRTC told

News | February 20, 2024

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