Canada orders large ISPs to make fiber available to competitors

“Business consumers-including the small- and medium-sized businesses that drive economic growth and job creation, state and local governments, schools and non-profit health care providers-will be hurt significantly if the IP transition deprives them of their choice of integrated communications solutions because the large incumbent LECs can raise prices for critical last-mile transmission, whether Ethernet or unbundled DS1/DS3 capacity loops”, Windstream wrote in a recent filing with the FCC. The smaller companies would then have to arrange transport of the signal from that regional interface to their own offices, either by installing their own fibre optic cable, or by leasing it from an existing company.

“Following an extensive review, the CRTC [Canadian Radio-television and Telecommunications Commission] found that the large incumbent companies continue to possess market power in the provision of wholesale high-speed access services and is requiring that they make these services available to competitors”, the CRTC said in an announcement yesterday.

Given that the smaller players won’t be rolling out their fibre services until sometime next year, only time will tell if this is truly a win for the little guys.

The CRTC had previously ruled that telecom and cable companies must lease their fixed-line networks to a slew of smaller rivals at prescribed rates.

“Because the commission wants to encourage facilities-based competition”.

The changes are to be phased in, starting in Ontario and Quebec. The CRTC said no companies outside of central Canada have expressed a willingness to shift to the disaggregated model of service, and they will therefore not be able to get access to fibre optic cables.

Wednesday’s ruling will raise questions about how fast the big players expand fibre-optic networks elsewhere in Canada.

Currently, the big telcos are mandated to offer competitors access to their networks on an “aggregated” basis, which gives them access through just one location in each province. Under the proposal, independent ISPs will have “disaggregated” access to the end user at a regional point of access much closer to the consumer.

Major Internet providers warned the commission during the hearing that mandating access to fiber services would create a disincentive to them investing in such infrastructure in the first place. The CRTC is predicting that will lead to more stability within the independent ISP marketplace.

“Fibre infrastructure is essential because it accommodates the anticipated bandwidth needs of Canadian telecom consumers of the future”, said company CEO Matt Stein.

The markup for access to fibre optic networks is expected to be determined by late next year.