CRTC planning consult on cabinet order that it revisit blocking Big Three’s wholesale access to fibre in Ontario, Quebec

Reporting by: Phalen Tynes-MacDonald Hannah Daley The CRTC has been ordered to reconsider whether it should block three of Canada’s largest telecommunications companies from accessing fibre networks on a wholesale basis in Ontario and Quebec. Issued the evening of Wednesday, Nov. 6, Canada’s cabinet directed the CRTC to revisit an interim decision from November 2023 requiring large incumbents BCE Inc. and Telus Corp. to provide aggregated wholesale access to their fibre-to-the-premises (FTTP) networks in the two provinces. The companies were given six months to allow competitors access to their networks. At the time, there were no restrictions on Bell, Telus, or Rogers Communications Inc. from using the regime to resell each other’s networks. Now, the government is specifically asking the CRTC to reconsider whether such restrictions should be added, citing “concerns about the viability of small and regional Internet service providers.” The commission was told to come to a decision within the next 90 days. The CRTC told The Wire Report it has received cabinet’s order and is “working quickly to launch a public consultation.” Minister of Innovation, Science and Industry François-Philippe Champagne (Saint-Maurice–Champlain, Que.) recommended the cabinet order. "Wholesale access is a proven regulatory tool to encourage competition. Workable wholesale access to fibre networks is needed. The CRTC has moved quickly to improve competition through this decision and others coming out of its broad review of Internet competition,” Champagne said in a press release. “In this case, however, the CRTC is being directed to reconsider a discrete aspect. The government has concerns about fostering the viability of small and regional Internet service providers that provide alternatives and about maintaining investments in Internet infrastructure, particularly in underserved areas including rural, remote and Indigenous communities.” Wednesday’s order follows a petition filed by Bell to cabinet in February 2024, asking it to rescind entirely the CRTC’s interim November decision granting competitors wholesale access in Ontario and Quebec. Bell argued that the CRTC’s decision would discourage network investment and adversely affect consumers. Bell had initially responded to the decision by announcing it planned to reduce its network investments by $1 billion in 2024-2025. Then the telecom giant tried to appeal the CRTC decision, but the action was postponed and eventually discontinued. "The Governor-in-Council is declining Bell Canada's petition to rescind or vary the decision and instead is referring it back to the CRTC with the direction to reconsider the restriction on the three largest service providers (Bell, Rogers and TELUS) from accessing wholesale fibre services,” Champagne said in a press release. Bell, Bragg Communications Inc., Cogeco Inc., TekSavvy Solutions Inc. and the Competitive Network Operators of Canada had also previously filed a joint application urging the CRTC to block Canada’s Big Three telcos from accessing incumbent networks, saying it would make it even more difficult for independent internet service providers (ISPs) to operate and harm competition. Rogers was opposed to the request, saying it would “intentionally perpetuate regulatory asymmetry, to the obvious benefit of Bell.” The Toronto-based telecom accused Bell of trying to prevent Rogers and Telus from accessing its FTTP facilities, while Bell “continues to ride” on mandated access to the cable carrier’s services. Rogers called for technology-neutral exclusions that consider other high-speed services, such as its hybrid fibre-coaxial cables. The CRTC eventually denied the request, explaining that it was still reviewing the wholesale access framework at the time. The Wire Report has reached out to Bell, Telus, and Rogers for comment on the Cabinet order. Ted Woodhead, an alumnus of Rogers, Telus, and the CRTC who is now a regulatory consultant in private practice, noted Champagne appears to be concerned about two things: “He’s concerned about the sustainability of the independent ISPs, number one, and he’s concerned about incentives to invest, particularly with rural and remote and Indigenous areas.” Woodhead said he assumes there were people urging cabinet to send the CRTC’s decision back to the commission for reconsideration. “I would have thought Cogeco Inc., Videotron, at least for Ontario some of the independent ISPs. They have a great deal to lose by increased competitive intensity, as does Bell in both Ontario and Quebec.” Geoff White is the executive director of the Public Interest Advocacy Centre and formerly held the same role at the Competitive Network Operators of Canada. In an email to The Wire Report, White called the cabinet order “a good outcome,” despite generally taking issue with the cabinet appeal route as “an expensive, time-consuming, superfluous check on the CRTC.” “This is a play to help the smaller competitors and it’s an important one. The wholesale regime has already been litigated to death and, as a result, smaller players that were at one time gaining market share and competing on price and better customer service were forced to liquidate or sell out to the bigger players,” White said. “The government’s 2023 Policy Direction is clear on the need to strengthen the regime, and yesterday’s direction doubles down on that commitment.” White argued there is “no reason” bigger telcos should get access to each other’s networks out-of-territory. “The regime exists for the very sake of disciplining incumbent behaviour – high prices, poor customer service,” White alleged, “not entrenching their dominance in the market. White anticipates there could be “trouble ahead” for the wholesale regime, anticipating further appeals of the CRTC’s wholesale access mandate. Even once the mandate truly kicks in, White said, it will take time for smaller companies to “re-muster and make an impact that consumers will see.” “That’s why it’s crucial that the CRTC get busy on direct consumer protection measures to protect consumers from misleading and aggressive sales practices, random arbitrary price increases, and inadequate disclosure, and at the same time strengthen authority and independence,” White argued. Mandated wholesale access expanded throughout Canada this summer This past August, the CRTC further mandated aggregated wholesale access to fibre networks across Canada – a decision which has been met with some dispute. Additionally, Telus has asked for an additional four months until it has to provide competitors with wholesale access to its fibre networks in Alberta and British Columbia. Bell, Telus, and Saskatchewan Telecommunications Holding Corp. were ordered to provide competitors wholesale access to their existing fibre networks. The telecom providers, all of which are incumbent local exchange carriers (ILECs) — meaning they were the original operators in their regions — will have until Feb. 13, 2025 to provide competitors with aggregated access to their fibre across Canada. The CRTC chose to exempt the companies’ new fibre builds from wholesale access until Aug. 13, 2029, in an effort to encourage continued investment in fibre, including in rural and remote areas, said the commission, giving Bell, SaskTel, and Telus more time to recoup their investments. While cabinet’s new order primarily references the CRTC’s Nov. 6, 2023 interim decision on wholesale access in Ontario and Quebec, it only just once acknowledges the broader August 2024 wholesale access decision without any mention of the in-territory restrictions that were placed on incumbents. It also did not mention the commission’s October 2024 decision setting interim rates for wholesale access throughout Canada. According to the most recent wholesale access policy, Bell, Telus, SaskTel, and their affiliated flanker brands are prohibited from using other companies’ networks to offer services in areas where they already have their own well-established infrastructure. The CRTC allowed them to use the regime outside of their territories, stating that when an incumbent operates out-of-territory, “it is acting as a new competitor with the potential to disrupt the status quo, to the benefit of consumers.” Telus had asked the CRTC for this measure during a public hearing on the wholesale framework this February. “Such access enables the incumbents to provide new competitive offers and puts pressure on all competitors to deliver additional benefits for consumers,” the commission said at the time. Cable carriers such as Rogers are not required to offer wholesale aggregated FTTP services at this time and therefore not restricted from accessing other companies’ networks. At the end of October, the CRTC set interim rates for that access, some of which were virtually unchanged from the earlier rates set for FTTP access in Ontario and Quebec, before mandated access was expanded throughout Canada. Telecommunications consultant Mark Goldberg noted in an interview with The Wire Report Thursday that paragraph nine of the CRTC’s interim rates decision in October seemingly deals with the motivation behind cabinet’s order. That paragraph states that the rates “will allow competitors to better serve Canadians using the latest available technology. “The rates will provide competitors with the opportunity to innovate and to attract customers by selling a range of communications services over FTTP, including Internet, television, home phone, and smart home solutions. The rates will also ensure that those who build Internet networks will continue to invest in high-quality Internet access across Canada,” the decision states. “It actually talks about coming up with rates that deal with both maintaining a favourable competitive environment while maintaining a separate favourable investment environment, which is quite a tightrope to walk for the CRTC,” Goldberg said about that portion of the CRTC’s October decision in an interview. Goldberg’s theory is that timeline constraints could have led cabinet to come to a decision on an order to the CRTC at this time, referring primarily to the November 2023 interim access decision for Ontario and Quebec, rather than an order more deeply taking into consideration the August 2024 decision expanding access throughout Canada and the October 2024 decision setting interim rates. According to Canada’s Telecommunications Act, anybody could try to appeal a CRTC decision by filing a petition to cabinet within 90 days of the commission having made that decision. Goldberg notes that if cabinet wants to act, it has one year until after the CRTC decision was made. Cabinet could also on its own decide to make changes to the decision or rescind it. Cabinet’s order was issued exactly one year after the Nov. 6, 2023 decision that it is referring back to the CRTC for reconsideration. “Among the things I’m wondering is it could very well be that the Governor in Council didn’t take into consideration. They don’t list it in the preamble,” Goldberg said. “If you think about the timeline from the time cabinet comes up with something and then has to get it translated into both official languages, it’s quite possible that these things crossed in the mail.” Goldberg also said the CRTC itself left the door open for reconsideration of its own decision, by virtue of setting interim rates for wholesale access throughout Canada in October, with a decision on final rates expected at a later date. Goldberg explained that the CRTC’s August decision opening up wholesale access throughout Canada could also be challenged in a similar way. “It’s a completely new decision, and the clock is that same 90-day clock. If you start the countdown from the August decision, we’re probably looking at next week before the expiration of that countdown clock .” The Wire Report has reached out to Champagne’s department of Innovation, Science, and Economic Development (ISED) for comment on the specifics of the decision. phalentm@thewirereport.ca hdaley@thewirereport.ca With a file from Paul Park at ppark@thewirereport.ca

CRTC planning consult on cabinet order that it revisit blocking Big Three’s wholesale access to fibre in Ontario, Quebec

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By Wire Report Staff
| November 7, 2024

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CRTC planning consult on cabinet order that it revisit blocking Big Three’s wholesale access to fibre in Ontario, Quebec

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