GATINEAU – The lack of wholesale access to last mile fibre infrastructure hasn’t deterred competitors from investing in their own high-speed networks, Bell Canada told the CRTC during its appearance as part of the Fibre Hearing on Wednesday.
The media and communications giant’s assertions come a day after Canadian Network Operators Consortium (CNOC) argued its members need wholesale access to the incumbent telco’s local fibre networks in order to compete.
The group noted Tuesday that in its view the current regulatory environment acts as a disincentive to invest in fibre to the premise (FTTP) facilities. Bell countered that this simply isn’t true. In fact, the company noted that there are 17 smaller ISPs building fibre to the home facilities in Ontario and Quebec and this has come in an environment where access to existing local fibre facilities hasn‘t been mandated.
“I find that (the CNOC argument) rather puzzling because there are other operators, 17 of them, building fibre to the home in our territory. They beat us to it. They don’t seem to have a problem investing. They’re building from the ground up, they’re not using our facilities, so I don’t understand why others can’t build,” said Dennis Henry, VP of regulatory, government affairs and public law at Bell Aliant, said in response to a question from vice-chair of telecommunications Peter Menzies (pictured above in a screen cap from the hearing coverage on CPAC.ca).
Mandating access to FTTP will slow investment in next-generation high-speed wireline infrastructure, Bell reiterated in its opening remarks. Dan McKeen, vice chair and senior VP of residential services at Bell Aliant, noted that of the 21 communities in which the company has deployed FTTP, nearly half of them (nine) wouldn’t have seen that investment if access to local fibre facilities for other ISPs had been mandated.
Bell also contested suggestions that the smaller ISPs are having a tough time in the market. Mirko Bibic, executive VP and chief legal officer, noted that it’s important to consider regional aspects of independent ISP competition. The CRTC’s 2014 Communications Monitoring Report said independent ISPs have 8% of the Canadian retail market but when looking at just Ontario and Quebec (where nearly all competitive Canadian independent ISPs operate) that figure more than doubles. In fact, 17% of end users on Bell’s network are customers of independent ISPs, he noted, adding that these competitors are doing well in Canada‘s two biggest provinces.
“We estimate that about 50% of net adds in 2013 are from wholesale customers… So where they are predominantly operating, they are succeeding.” – Mirko Bibic, Bell Canada
“We estimate that about 50% of net adds in 2013 are from wholesale customers (if telcos and cablecos are combined). So where they are predominantly operating, they are succeeding,” added Bibic.
CNOC said adopting an equivalence of inputs (EoI) regime would help give smaller providers access to the facilities they need to compete against the incumbents. Bell said the impacts of migrating to this type of model, where incumbent retail and wholesale activities would be separated, would be financially onerous.
Jonathan Daniels, VP of regulatory law at Bell, noted that considerable human resources and about three years time would be required to shift to this model and could cost the company approximately $100 million.
The first of the cable companies also appeared before the CRTC Wednesday. Vidéotron used part of its appearance to argue that the tariffed rates for Third Party Internet Access (TPIA) aren’t high enough and that the commission should adopt the same hands-off regulatory approach for DOCSIS 3.0 and 3.1 as it does for FTTP.
Bertrand Hébert, VP of market for telecommunications at Videotron, argued it’s unfair for the commission to forbear from regulating FTTP if it isn’t going to adopt the same type of approach for the most advanced forms of DOCSIS. The company recognized though that perhaps setting limits as to when mandated access would no longer be available is a good option. It suggested that speeds at 50 Mbps or greater could be forborne from regulation.
On TPIA, the current rates don’t reflect the true cost of the network and that TPIA resellers aren’t paying their part for the maintenance and operation of the network, Vidéotron said in its opening remarks.
Daniel Proulx, head of technology at the communications company, said for example, an Internet customer from a wholesale provider pays on average about $29.88 while at the same time consuming twice as much data as a typical Vidéotron customer. In essence, this amounts to a cost of almost 45% lower than the most popular Vidéotron Internet package.
This type of situation can’t continue, said Proulx, without ultimately having an impact on the company’s ability to continue to invest in its network.
Cogeco Cable, Distributel Communications and SaskTel appear on Thursday.
