CRTC launches review of wholesale network rates, slashes some rates by 10 per cent immediately

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Today’s Canadian Radio-television and Telecommunications Commission ,CRTC) announced that it would review its existing structure for wholesale high-speed access (HSA) services, and is implementing a 10 percent cut on some wholesale rates immediately.

“The CRTC recognizes that its current approach is not serving its objective of encouraging greater competition in the Internet services market,” the commission said in its release.

The current approach stems from a 2015 Policy This allowed competitors to connect their networks to the existing carrier’s (large telephone or cable company) and obtain the same high-speed path to deliver Internet services to customers throughout the existing carrier’s operating area. The policy also required large cable carriers to provide fiber-to-the-premises (FTTP) to competitors at wholesale rates.

The 2015 policy also sought to encourage a Transitioning from a Composite to a Separate Bulk HSAUnder which competitors typically only access service on a wholesale basis as they provide transport themselves or rent transport networks from other service providers. The CRTC determined that by investing in its own infrastructure, competitors can compete better, rely less on price regulation and have more control over their own cost structure.

But the change to a different model posed a number of challenges, particularly around the ability of competitors to potentially access FTTP facilities. Other competitors such as ILECs (existing local exchange carriers) lease most of the fiber access facilities deployed by existing carriers. ILEC currently serves more than nine million households in major urban centers.

Conversely, ISPs are losing customers to competitors. In 2019, they accounted for about 10 percent of all fixed internet service customers, while in 2021 the number has come down to just 8 percent.

Meanwhile, incumbent carriers have radically increased their Internet market dominance by launching subsidiaries that offer competitive prices and by acquiring smaller competitors.

Therefore, the proceedings will focus on whether incumbent carriers should provide competitors access to their fiber-to-the-home networks and whether a return to overall wholesale HSA service should be mandated. The overall wholesale HSA service requires competitors to rely almost entirely on one large company’s network, which means the commission will set the rules and rates.

Proceedings are also to determine whether an overall wholesale HSA service should be temporarily mandated until the Commission decides whether such access is to be provided indefinitely.

According to the CRTC, this review is necessary because the existing wholesale high-speed access service infrastructure is not in line with competition principles and prescribed affordability. 2023 Policy Direction,

The CRTC is welcoming comments on the question of mandating access to fiber-to-the-home networks by April 24, 2023.

For all other issues under review, comments are accepted until June 22, 2023.

Canadians can participate in:

  • fill online form,
  • writing to the Secretary General, CRTC, Ottawa, Ontario K1A ON2; Or
  • By sending a fax to (819) 994-0218.

The commission will also hold a public hearing on the matter, the date to be announced.

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