Rogers, Cogeco, Eastlink ask CRTC to block Big Three from wholesale access

Multiple telecom companies -- including Rogers, Cogeco, Eastlink, and TekSavvy -- have filed requests with the CRTC asking it to revise its decision to mandate aggregated wholesale access to fibre networks across Canada, with many renewing calls to block the country’s largest telcos from using the wholesale regime to resell over each other’s networks. Rogers Communications Inc. filed an application on Nov. 12 arguing that the current rules threaten investment, stifle competition, and disproportionately harm cable companies such as itself. Echoing previous arguments the company has made for more “technologically neutral” regulations, Rogers is urging the CRTC to ban itself, BCE Inc., and Telus Corp. – the Big Three – from using the wholesale access regime to access each other’s high-speed networks, regardless of what kind of technology they have. Currently the framework prohibits incumbent telcos from accessing each other’s fibre-to-the-premises (FTTP) networks within their own traditional serving territory, but Rogers wants to see it include other high-speed technologies, such as its own hybrid fibre-coaxial (HFC) cables. The restriction should also apply across the country, despite what territory a given network is in, the company added. Rogers also wants the CRTC to expand the five-year exemption, currently only granted to new FTTP builds, to include new HFC networks. The decision's failure to grant a similar "head start" to cable carriers is "competitively and technologically inequitable,” the company argues, emphasizing that this asymmetry puts it at a disadvantage compared to the other incumbents, who enjoy a five-year grace period before being required to provide wholesale access to their new high-speed deployments. If the exemption is not expanded, then Rogers said it would at least like to see a 1.5 gigabits per second (Gbps) speed cap on mandated aggregated wholesale high-speed access (HSA) services, limiting wholesale competition from the highest speed tiers of all networks. The telecom also called on the CRTC to provide a clearer explanation for why wholesale regulatory intervention is necessary, asking for sound evidence that shows facilities-based competition has not resulted in competitive outcomes and that mandated aggregated wholesale access will have a “substantial impact” on affordability and choice. “The decision – if left unchanged – will inevitably distort and diminish network investment, innovation and facilities-based competition,” argued Rogers. Allowing incumbents to access each other’s out-of-territory FTTP networks “effectively rewards other incumbent carriers, including Bell and Telus, for minimizing their wireline network coverage and penalizes Rogers for its greater investment in wireline network coverage,” Rogers argued. This, along with a five-year “head start” to FTTP builds and not HFC builds, “incents Canada’s largest incumbent carriers to become resellers rather than network builders and prioritizes wholesale-based competition over facilities-based competition.” Cable companies and competitors united Cogeco Inc., Bragg Communications Inc.’s Eastlink, and the Competitive Network Operators of Canada (CNOC) filed a joint application on Nov. 7 with a similar request. The coalition also urged the commission to block the Big Three from accessing each other’s networks anywhere in the country, regardless of the kind of technology. “A policy that was designed to support smaller, regional competitors in the retail Internet market is now having the opposite effect,” said the application. The filings come off the heels of a recent cabinet order directing the CRTC to reconsider whether the Big Three should be restricted from using the wholesale access regime, which cited “concerns about the viability of small and regional Internet service providers.” “We urge the commission to widen the scope of any reconsideration proceeding to the policy, so it covers a prohibition on the Big Three from using mandated wholesale HSA on all technologies, anywhere in the country,” the joint application wrote. “By allowing the Big Three to use wholesale HSA outside their respective territories, the commission failed to consider the Big Three’s distinct advantages,” it stated, highlighting the large telcos’ ability to “leverage their existing balance sheets to offer low-priced, but temporary plans with the outcome of forcing the regional competitors out of the market,” as well as “cross-subsidize their Internet plans” by bundling them with wireless services. “These dominant carriers gain mandated access to markets where they presently have wireless facilities, allowing them to further grow their market share at a fraction of the cost compared to having to build facilities to serve the same markets. This access further entrenches their dominance in the Canadian telecommunications market to the detriment of regional facilities-based and service-based competitors,” said the coalition. In addition to wireless-wireline bundles, the coalition noted that the wholesale regime is “incoherent” with the broader regulatory regime, particularly the mobile virtual network operator (MVNO) policy, aimed at boosting competition in the mobile wireless market. Under the MVNO policy, although the cost for new entrants is high, the Big Three are banned from using the mandated MVNO service entirely. The coalition notes that this was because the CRTC found that the large incumbents “do not require additional regulatory assistance to expand their networks.” “The policy rationale for preventing a dominant class of carriers from accessing certain wholesale services at regulated rates, terms and conditions is straightforward,” said Cogeco, Eastlink, and CNOC. The signatories acknowledged that they have formed “an unlikely coalition of signatories.” Adding, “while we do not see eye-to-eye on a variety of issues that fall under Canada’s telecom regulatory framework, we all agree that the policy, if left unchanged, poses a fundamental threat to Canada’s regional facilities-based and service-based competitors.” TekSavvy takes aim at five-year head start, cable companies’ exemption TekSavvy Solutions Inc. also jumped in with its own application, its focus, however, was on other aspects of the CRTC’s wholesale decision. The company acknowledged the application from Cogeco, Eastlink, and CNOC, but opted to save elaborating on that view as part of its interventions on the other application. TekSavvy wants the CRTC to reverse course on the five-year exemption provision granting incumbents a grace period in which they would not have to allow competitors to access their new FTTP. The CRTC’s reasoning for the exemption was to encourage continued investment in fibre, including in rural and remote areas, giving incumbents more time to recoup their investments. But TekSavvy, a primarily wholesale-based competitor that has some network facilities of its own, argues that incumbents do not need any extra incentives to invest in areas within their existing territories. TekSavvy notes that connecting new building developments and multi-unit dwellings in territories with existing FTTP facilities is “typically much less costly” than it would be to build out to new areas incumbents do not already have service. The company argues that this difference in cost means there is “little reason” to expect that incumbents need any extra incentive to grow their networks to new builds in their existing FTTP-serving territories. The Chatham, Ont.-based company also wants the CRTC to set a specific deadline for when cable carriers would be ordered to let competitors access their FTTP networks, if it would not go as far as to walk back the exemption entirely. The CRTC has so far said only that cable carriers are not required to provide wholesale aggregated FTTP access “at this time.” TekSavvy believes getting access to cable carriers’ fibre networks is a necessary move to “enhance market certainty and prevent investment strategies steered by regulatory gaming.” phalentm@thewirereport.ca With files from Hannah Daley.

Rogers, Cogeco, Eastlink ask CRTC to block Big Three from wholesale access

Regulatory |
By Phalen Tynes-MacDonald
| November 14, 2024

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Rogers, Cogeco, Eastlink ask CRTC to block Big Three from wholesale access

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