OTTAWA – Independent ISPs and consumer groups are telling the federal government not to buy Bell Canada’s assertions that investments in next-generation fibre networks will come to a standstill if the CRTC’s wholesale fibre access decision is allowed to stand.
A day after the Justin Trudeau Liberals swept into power in Ottawa on October 19, Bell filed appeal with the Governor-in-Council seeking a Cabinet order overturning Telecom Regulatory Policy 2015-326. The company claims the decision favours “resale over investment” which will lead to less capital for fibre to the home (FTTH) networks, fewer FTTH deployments in smaller communities, lost jobs and a less competitive economy.
The Canadian Network Operators Consortium (CNOC) says Bell’s investment argument simply doesn’t ring true. The group represents a large number of smaller independent ISPs and says in its submission to cabinet that one only needs to look at the wireline investments made by Bell over the last number of years to see that it won’t halt network builds as a result of mandated access to broadband facilities.
CNOC points to a 2010 CRTC decision relating to fibre to the node (FTTN) as evidence. Following that ruling, Bell continued to invest in broadband infrastructure increasing from $1.978 billion in 2010 to $2.334 billion in 2014.
"Bell is engaging in fear-mongering to maximize profits at the expense of consumers.” – CNOC
“The reality is that Bell’s FTTH rollout will not be affected by the Decision,” it argues. “The necessity of competing with the cable carriers requires Bell to invest broadly and in a timely manner in FTTH rollout as it did in Fibre-to-the-node (FTTN) networks before that. Bell is engaging in fear-mongering to maximize profits at the expense of consumers.”
This is a sentiment shared by several opposed to the Bell petition, including the Consumer Choice Coalition, a group that includes the Public Interest Advocacy Centre and the Consumers’ Association of Canada, among others. Cogeco Cable also agrees that next-generation network investments from cablecos and telcos won’t stop if Cabinet fails to reverse the CRTC decision.
Depriving smaller competitors access to last mile fibre infrastructure will hurt retail competition, notes CNOC, resulting in consumers having to choose between the telco or cableco in the best case scenario or in the worst, just one of them.
“In particularly dense urban markets, consumers may have one of either two choices: an incumbent telephone company or a cable carrier. Outside of these cases, consumers may find themselves in markets where there is only one choice of providers offering next-generation services. In the absence of competition in all of these areas, incumbent carriers will have no reason to lower prices or innovate to develop competitive advantages. In such conditions, it is the consumer that ultimately suffers,” states the independent ISP group.
Bell’s argument that the CRTC decision “expropriates” new FTTH networks for the benefit of other providers is also false, according to TekSavvy Solutions. The company says it doesn’t get a free ride on any networks.
“On the contrary. We pay full freight,” it says in its filing.
VMedia adds that incumbents hold such “enormous legacy advantages” including large customer bases, long-standing customer relationships and brand recognition, in addition to legacy infrastructure. If Bell believes competitors can rollout out their fibre to the premise (FTTP) networks, then why isn’t the company building outside of its incumbent territory, the company wonders.
“After all, Bell has not announced any grand FTTH investments in Calgary, Saskatoon and Vancouver, and Telus is silent on installing FTTH for homeowners in Toronto, Halifax and Ottawa at the same time as it announces its ambitious FTTH plans for Vancouver,” says VMedia.
Still others say the conditions are now right for competitor investment in fibre facilities. Primus Telecommunications Canada argues that by shifting to a disaggregated broadband model, smaller companies now have the proper incentives to build their own networks while still availing themselves of the non-duplicable local access component.
While smaller competitors and groups representing consumers oppose the Bell appeal, there are others who say they, too, will have to re-evaluate their own fibre builds as a result of mandated access to wholesale broadband facilities.
"Mandated access may tip the scales against expansion of the FTTP project in many communities." – Telus
Telus agrees with Bell that FTTP investment decisions will have to be reassessed in a mandated access regime. The company says that while it will continue to rollout out FTTP in Edmonton and Vancouver, future investments may be reviewed on a community basis as a result of a new regulatory regime. It’s important to recognize, adds Telus, that these investments aren’t short-term decisions.
“With investments measured in decades, not years, mandated access may tip the scales against expansion of the FTTP project in many communities. This includes both present plans for FTTP investment, and any other improved infrastructure and technology that is developed going forward,” the company states.
Because incumbents will receive less revenue under a mandated access regime, they won’t have as much capital to investment in wholesale broadband networks, argues SaskTel. “At the same time, there is no incentive for the competition to build out any network. Purchasing wholesale services provides resellers with a risk-free alternative to building their own networks since they need only order wholesale service at a location once they have secured a retail customer,” says the company’s submission.
Eastlink supports the Bell petition, but says any ruling must not introduce any negative competitive dynamics. The company notes that reversing the decision would result in a situation where it has to provide wholesale access to services at speeds up to 100 Mbps over its DOCSIS 3.0 platform in Atlantic Canada while Bell will only have to offer access at speeds up to 7 Mbps from its legacy ADSL network.
The federal cabinet has until a year after the initial CRTC policy announcement (which was July 22nd) to make a decision on the Bell petition.
