By Ahmad Hathout
Rogers is asking the CRTC to consider banning itself, Bell and Telus from accessing tariffed aggregated wholesale internet for both last-mile fibre and hybrid fibre-coax (HFC) technologies.
The cable giant is also asking the commission to include a five-year moratorium on competitor access to new speeds produced by investments in cable networks and/or implement a speed cap of 1.5 Gbps on an aggregated wholesale basis (bundled middle- and last-mile).
Applying none of these suggestions would leave cable carriers shouldering the burden of the wholesale regime again, which is offside of the direction from cabinet which calls for equitable application of the regulatory framework, Rogers says in an application this week to revise the CRTC’s August decision on a new wholesale internet access framework.
Rogers files this application following a recommendation from cabinet asking the CRTC to relook at whether Rogers, Bell and Telus should be banned from accessing the aggregated last-mile fibre facilities of Bell and Telus in Ontario and Quebec (Bell filed the petition challenging the interim decision in November 2023, which was superseded by the August decision that expanded access to the telcos’ last-mile fibre facilities across the country but banned wholesale access inside their operating territories). The CRTC has since confirmed it will launch a public consultation on the matter soon.
The cabinet recommendation is a new circumstance, which is one criterion for granting a review-and-vary application by the CRTC. The cabinet recommendation has been used by the Competitive Network Operators of Canada, Cogeco and Eastlink to file a joint review-and-vary application of their own this week to similarly request a Big 3 ban from the wholesale regime altogether. Rogers and Bell have already warned about Big 3 wholesale access; Telus has said it should have access outside of its operating territory.
“Use of mandated aggregated wholesale HSA at tariffed rates should be limited to those competitors that require mandated aggregated HSA to enable them to compete,” Rogers argues in its application. “If this is not the case, then the mandated HSA regime is neither efficient nor proportionate. Rather, it unnecessarily and inefficiently distorts competition and deprives Canadians of the advantages of greater network investment, facilities-based competition, network redundancy and resiliency and network innovation.”
Rogers argues that it is particularly penalized by the decision to allow Bell and Telus to use the wholesale internet regime outside of their operating territory because of Rogers’s “greater investment in wireline network coverage” across the country. “In doing so, the new wholesale wireline regulatory framework incents Canada’s largest incumbent carriers to become resellers rather than network builders and prioritizes wholesale-based competition over facilities-based competition,” the cable giant says.
While the CRTC banned providers from accessing the wholesale regime inside their operating territory to ensure they invest in their own networks, it includes a grandfathering of existing wholesale subscribers. In exchange, it is prohibiting those subscribers from getting better technology and higher speeds.
Rogers argues this hurts cable carriers because most of the wholesale-based customers in the incumbent telco operating territories are riding on cable HFC networks, as they provide faster speeds than older technology. If they need to switch to higher speeds, they would need to subscribe to the telco’s fibre networks, new ones of which have been provided a five-year access moratorium to recoup their investment.
On that point, Rogers argues that it doesn’t make sense that the CRTC is providing for that five year “head start,” but not applying the same treatment to new cable investments – in the billions of dollars – that continue to offer higher gigabit speeds.
The CRTC excluded the last-mile fibre networks of the cable companies from the access regime because of their limited reach compared to Bell and Telus. While Rogers is urging the commission to maintain that exemption, it says this does rectify the imbalance of shielding some investments (telcos) and not others (cablecos).
“By continuing to favour ILEC FTTP investments over cable carrier HFC DOCSIS investments, the wholesale regulatory framework established by the Decision not only perpetuates the longstanding inequitable treatment of cable carrier HFC DOCSIS investments and ILEC FTTP investments; it also inevitably distorts dynamic facilities-based competition, innovation and research and development,” Rogers says.
This is why the cable company is also urging a cap on the speeds open to the access regime. “A speed cap is targeted at the newest and most risky wireline network investments – namely large, sunk investments that make the provision of next generation speeds with uncertain demand possible,” Rogers says, adding it is also technology neutral and “ensures coherent and consistent access to mandated wholesale HSA services.”
Before the wholesale internet framework decision, Rogers filed an application asking the CRTC to temporarily suspend access to its new gigabit speeds until that decision was made. In that application, it argued that wholesale access to those gigabit services was not required to comeptitors to compete effectively before the CRTC’s August decision.
However, Rogers argues in its latest application that the commission’s data “confirms that a 1.5 Gbps speed cap on wholesale access cannot reasonably be expected to have any material negative impact on wholesale-based competitors.”
Rogers also charges that the CRTC failed to identify “persuasive” evidence that retail internet markets are not affordable or competitive and presumes that facilities-based competition has not resulted in a balance of investments and enhanced competition.
It also argues that the decision does not discuss the basis for concluding that enabling wholesale-based competitors is likely to have a substantial impact on affordability and choice based on the record and does not define “smaller competitor” or “reasonably efficient smaller competitor.”
“Clear and transparent tests for wholesale regulatory intervention are a prerequisite to predictability and regulatory certainty as well as compliance with the principles of efficiency and proportionality,” Rogers says. “The Commission’s reliance on presumptions and undefined metrics for mandating the most intrusive form of wireline wholesale intervention (mandated aggregated wholesale HSA) is inconsistent with these basic principles, raising substantial doubt as to the correctness of the Decision.”
