By Ahmad Hathout
The CRTC on Friday set the final wholesale access rates to the bundled fibre networks of the incumbent telcos, keeping them “similar” to the existing rates set in 2024 because of their success in inducing new offerings in the market.
“The final rates set in this order are similar to those interim rates, which dozens of competitors have successfully been using to bring new offers to market and attract tens of thousands of new customers,” the CRTC said Friday.
Indeed, the final rates are mostly only slightly changed. For access to Bell’s FTTP facilities, between 3 Mbps and 1.5 Gbps, the cost is $68.26 per month and $77.20 for between 1.5 Gbps and 8 Gbps – 68 cents and 83 cents lower, respectively, compared to the interim rates.
For Telus’s Quebec fibre facilities, the rate is $57.86 for between 15 Mbps and 1.5 Gbps and $62.45 for between 1.5 Gbps and 5 Gbps, compared to the interim rate of $65.25 for all speeds. In British Columbia and Alberta, the final rates for those speeds are $77.21 and $81.81, respectively, compared to the interim rate of $80.41, which applied to all speeds up to 1.5 Gbps.
For SaskTel, which operates only in Saskatchewan and said it is reviewing what this decision will mean for investment in networks, the final rates for all speeds between 15 Mbps and 1 Gbps is $67.97, nearly $10 less than the interim rate of $77.57 for those speeds.
“Finalizing these rates provides certainty for the industry and will allow competitors to continue offering new choices to Canadians while also ensuring Canada’s largest telephone companies are compensated fairly for the investments they make to connect Canadians to fibre,” the regulator said.
The CRTC noted in the decision – as it did in its rejection of appeals against the policy – that Telus had launched new gigabit services using Bell’s fibre network in Ontario and Quebec, which means more choice for Canadians.
The regulator also pointed to new developments since, including Bell’s announcement that it will use Telus’s fibre network to launch services in British Columbia and Alberta and smaller internet service providers using the last-mile fibre regime across the country.
“This increased choice is expected to apply continued downward pressure on Internet prices, in particular for consumers who are bundling their communications services,” the CRTC said Friday. “The Commission expects this trend to continue as other competitors leverage wholesale HSA services, including aggregated wholesale FTTP services, to enter new markets across the country.”
But smaller competitors are not seeing it that way.
TekSavvy, which currently uses the regime in Ontario, Quebec, the Atlantic provinces, Manitoba, British Columbia and Alberta, said the rates are effectively the same. “Today’s CRTC decision on final fibre Internet wholesale rates is very disappointing for Canadian consumers and small independent competitors,” Andy Kaplan-Myrth, TekSavvy’s vice president of regulatory and carrier affairs, said in a statement. “In effect, the CRTC has kept the same high wholesale rates it already set years ago. After waiting three years for this decision, it is frustrating that nothing has changed to help increase real competition or lower retail prices for fibre Internet.”
The Competitive Network Operators of Canada (CNOC) went a step further. “CRTC Final Fibre Rates End Independent Internet Competition for Consumers in Canada” is the headline that runs across the front page of the wholesale rep’s website.
The organization, which lost some members to M&A in recent years, leverages the CRTC’s data that shows wholesale-based competitors lost half their market share over a four-year period.
“The wholesale rates finalized today … will not reverse that trajectory,” CNOC said in the statement. “They will complete it.”
It claims that the CRTC is banking on the creation of competition by the incumbents Bell and Telus and not from wholesale-based competitors. “The Commission’s entire framework is a gamble on two incumbents — while ignoring the independent providers that those same incumbents have acknowledged, on the record, as the source of pricing pressure in the market.
“Bell and TELUS now face no serious pressure on price — and every Canadian household will feel that on every monthly bill, for years to come,” Paul Anderson, president and chair of CNOC, said. “The government asked the CRTC for affordable competition. It delivered the opposite.”
The CRTC has also made the rates retroactive to the dates the interim rates were effective. It also maintained a 30 per cent markup, despite requests from Bell, Eastlink, SaskTel and Telus to increase it to incentivize investment and requests from the Competitive Network Operators of Canada (CNOC) and TekSavvy to decrease it for the sake of competition.
“The Commission will conduct active market surveillance to gather the evidence required to effectively evaluate the framework’s ongoing impact,” the CRTC said. “The Commission will closely track, among other things, the new options that competitors bring to the market, the responses of other competitors, the number of households that are subscribing to new offers, and the network investments that continue to take place by assessing the number of homes that are being connected to FTTP in various regions of the country.”
The regulator noted that it still has to set the final rates for FTTP facilities operated by Bell Aliant in Atlantic Canada and Bell MTS in Manitoba because they only recently submitted costing information.
Final cable rates still outstanding
The CRTC also still needs to set the final rates for the rest of the wholesale internet regime, which captures access to the hybrid fibre-coaxial networks.
“These rates have been unchanged for years and remain outstanding even as the cable carriers upgrade and replace those networks, evicting small independent competitors from wholesale access to thousands of consumers’ homes,” Kaplan-Myrth said. “TekSavvy urges the CRTC to act quickly to address the remaining rates and halt the shrinking competitive footprint for Internet services in Canada.”
CNOC added that the “independents face a shrinking addressable market as cable companies roll out their own fibre — and numerous other wholesale rates remain outstanding. Three regulatory attempts in ten years have failed to deliver competition. Canadians will now be paying the price.”
Quebecor said in a statement that it expects “fairness and parity” between both rates once the complete regime is in place, but warned about a disparity based on geography.
“While mobile prices are the same regardless of the province, the decision allows Telus to retain a competitive advantage at the expense of Western Canadian consumers, who will have to continue paying higher prices for Internet services,” Quebecor alleges. “This decision also further limits our ability to offer competitive bundles in the region and runs counter to the objectives that both ISED and the Competition Bureau expressed at the time of the Freedom Mobile transaction.”
Eastlink said it currently does not use the aggregated fibre regime and will not comment on this decision. However, it will have something to say when the CRTC finalizes the cable rates.
Cogeco declined to comment. Rogers, Bell and Telus did not respond to a request for comment.
On Thursday, the federal cabinet declined to overturn the CRTC’s policy of allowing Rogers, Bell and Telus to use the wholesale internet framework. Critics of the policy, specifically Cogeco and Eastlink, will have their day at the Federal Court of Appeal to argue their grievances against the framework.
Photo via Aecon
