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Friday, November 10, 2023

CRTC forces large telcos to share fibre network with competitors, Bell pulls back on investments

At the 22nd Canadian Telecom Summit ↗, the Canadian Radio-television Commission (CRTC) Chair, Vicky Eatrides, announced ↗ that large cable and telephone companies will have to share their fibre-to-the-home (FTTH) networks with competitors in order to increase competition and lower prices for customers. This ruling follows a public proceeding ↗ launched in March of this year.

As part of the decision, the CRTC said it is providing competitors with a “workable way” to sell internet services using the FTTH networks of large telephone companies in Ontario and Quebec, where, Eatrides argued, competition has decreased the most.

The big telcos are required to provide competitors with access to their FTTH networks within six months, during which they can prepare their networks, develop billing systems, etc. 

The CRTC will also be setting the interim rates that competitors have to pay when selling services over the FTTH networks.

The rates, the Commission claimed, were chosen to enable Canada’s telcos to continue to invest in their networks.

But right after the CRTC announcement, Bell announced ↗ that it is cutting down on critical  network investments and reducing capital expenditures by over C$1 billion in 2024-25.

The company said in a release, “Rolling back fibre network expansion is a direct result of the CRTC’s decision. Today’s decision forces Bell to open up its fibre network in Ontario and Quebec but does not mandate access to fibre-to-the-premises networks in western Canada where there are over three million fibre locations passed. If the intent of the decision is to benefit consumers then it is arbitrary and capricious to leave western Canadian consumers behind. When Bell enters a community with high-speed fibre internet, it increases competition, and customers benefit from better service, better value and lower prices.”

The CRTC, however, maintained that independent competitors in Ontario and Quebec now serve 47 per cent fewer customers than they did two years ago, while simultaneously several competitors have been bought out by big telcos, hence decreasing choice for Canadians.

Eatrides’ keynote was preceded by that of Robert Ghiz, the president of the Canadian Telecommunications Association (CTA ↗), who claimed the complete opposite.

Ghiz argued that wireless and telephone services prices have actually declined in Canada.

“There’s so much written about telecom prices in Canada, and unfortunately, much of it is wrong,” noted Ghiz. “So let me set the record straight. I don’t have to remind you that in the last few years, Canadians have been living through a period of heightened inflation, whether it is housing, groceries, energy or other consumer items, the cost of almost everything has been going up. But there is a notable exception: the price of telecom services.”

The price of internet services have declined in the last year by almost eight per cent, Ghiz added, citing StatsCan figures, while the cost of consumer items has risen by almost four per cent. He noted that the difference between cellular service prices and overall inflation is even more dramatic, with cellular prices declining by over 17 per cent over the last 12 months. 

He also put a new PwC report ↗ commissioned by the CTA into the spotlight. It detailed the importance of continued, beefy network investments in Canada.

“Compared to most other countries, Canada has a more diverse blend of national and regional facilities-based service providers who compete for customers not only on price, but also on quality and coverage,” Ghiz argued.

Continued investment in the telecom sector, the report highlighted, has the potential to contribute an additional $112 billion to Canada’s GDP by 2035, while further bridging the digital divide.

In its announcement, Bell argued that its network expansion over the past four years has brought high-speed fibre internet to hundreds of communities in Québec, Ontario, Atlantic Canada and Manitoba, but that millions remain unserved. 

The company added that its near-term plan was to build high-speed fibre to 9 million locations by the end of 2025. This, Bell said, will be reconsidered, and slashed to 8.3 million locations.

At least C$400-C$500 million will be axed from Bell’s 2024 planned capital expenditures, the company said.

Michael Maren
Michael Maren
Former marine biologist who likes to spend as much time in the tropics as possible, due to a horrible time I once had in Alaska. Brrrr.

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