GATINEAU – While the Competition Bureau argued Monday it’s better not to regulate fibre facilities, others countered that Canada is far too big for facilities based competition and that the Commission should switch its focus to a more service-based approach.
The Competition Bureau kicked off day one of the Commission’s hearing into wholesale fibre access for independent third party broadband providers that it shouldn’t jump the gun on regulating access to wholesale facilities including fibre to the premise (FTTP) networks. The agency said the risks of imposing mandated access to FTTP now may be higher than if the Regulator waited until it gathered enough information to determine a much more fulsome picture of competition in FTTP. For example, this could be done through monthly subscription monitoring, added the Bureau.
“If evidence of consumers’ willingness to switch suggests that FTTP is a distinct relevant product market, that is, if it indicates that fibre-based access and transport services do not provide a sufficient competitive constraint on pricing FTTP services, the Commission should commence a separate proceeding for the purpose of confirming the need for further regulatory measures,” Patrick Hughes, a senior economist with the Competition Bureau, said in his opening remarks.
“Waiting and seeing and then getting the right answer may be more preferable than making a decision now one way or the other.” – Patrick Hughes, Competition Bureau
Until there is a more thorough understanding of how FTTP is affecting the competitive dynamics in the market, it’s prudent to wait before making decision on mandated FTTP access one way or another. “If we can get the necessary information in a timely manner and in a way that facilitates analysis … waiting and seeing and then getting the right answer may be more preferable than making a decision now one way or the other,” said Hughes in response to a question from CRTC vice-chair of telecommunications Peter Menzies.
Opting for the Bureau’s approach may seem like the CRTC would be willing to sacrifice the existence of independent ISPs just so FTTP networks could be deployed to a much larger degree was an idea suggested by broadcasting vice-chair Tom Pentefountas.
Hughes acknowledged that this may be an outcome of not mandating FTTP access, but said it’s just as plausible that mandated access to FTTP may be granted.
“In this hypothetical world we’re making up here, it is completely possible that it’s a distinct relevant product market and in such a new and innovative area that a remedy may be very appropriate and may have consumer benefits,” he said.
While the Competition Bureau argued that it would be more appropriate to hold off on imposing mandated access to FTTP, a Ryerson University researcher noted that the CRTC’s current essential facilities framework hasn’t been that great of a success when it comes to deploying fibre closer to customer premises.
Reza Rajabiun, a research fellow at the Ted Rogers School of Information Technology Management at Ryerson, noted that six years after the CRTC forbear from regulating access to fibre facilities in 2008 (Telecom Decision 2008-17) “disincentives to allocate capital from legacy platforms to the deployment of advanced FTTP networks” still exist as “high-speed and symmetric fibre connections” are largely unavailable to Canadians.
“The Canadian experience contradicts the argument that forbearance from imposing essential facilities obligations will foster investments and the diffusion of next generation networks.” – Reza Rajabiun, Ryerson
“The Canadian experience contradicts the argument that forbearance from imposing essential facilities obligations will foster investments and the diffusion of next generation networks,” said Rajabiun.
Without mandated access to fibre facilities for independent broadband competitors, Canadian consumers and businesses will continue to receive inferior service from incumbent cable and telco networks. Rather, it’s better to have a single high quality fibre network which accessible by many parties to provide services, he said in response to a question from Menzies.
The first day of the CRTC’s wholesale wireline services hearing also heard from a broadband network user. Cybera, a non-profit research and education network in Alberta, argued that access to fibre facilities should be mandated in rural areas. It noted during its opening remarks that Canada is simply far too large for facilities based competition – and that service competition is critical.
The organization highlighted that despite Alberta’s Supernet, there are still many underserved communities – and on top of that there is a considerable amount of unused bandwidth on the provincial broadband network. This, said Robert Winsor, president and CEO of Cybera, is the result of a rate structure that didn’t take into account the significant increase demand for bandwidth that followed. Therefore, the CRTC should consider an alternative to rate setting for wholesale services: Full reviews every three years and annual or semi-annual adjustments in between.
The research and education network has first hand experience dealing with the sometimes high costs of buying bandwidth. For example, one educational institution reported paying $185 per Mbps in rural Alberta when other post secondary institutions were paying only $10 for equivalent bandwidth.
Cybera has instituted an Internet buying group to help learning institutions get lower bandwidth costs. Since establishing this group in 2011, the organization has seen prices drop considerably. “This Internet buying group has spurred the major carriers to compete for the Internet buy of Alberta’s educational institutions, and in doing so, has dropped rates from hundreds of dollars to around $10 per Mbps,” said Winsor.
The CRTC’s wholesale broadband services hearing continues tomorrow with testimony from the Canadian Network Operators Consortium, Primus Telecommunications Canada, and the British Columbia Broadband Association.
The hearing can be heard at www.crtc.gc.ca or seen at CPAC.ca.
