Bell says market has ‘never been more competitive’
By Ahmad Hathout
Telus said Wednesday that it should be allowed to use the wholesale internet regime outside of its operating territory, but noted that an unfettered framework without limits will create a disincentive to invest in networks.
Telus took issue Wednesday with being labelled a national “incumbent” because it mainly operates in the west and has few facilities east of its home court, including some in Quebec.
The telco argued that it be given access to the wholesale regime in areas outside of its operating territory because that would boost competition. In contrast, it said facilities-based telecoms should not be able to access the regime in their own territory because it would reduce the incentive to invest.
“There are no national incumbents in wireline,” Stephen Schmidt, vice president of telecom policy and chief regulatory legal counsel, said Wednesday. “There’s no big three in wireline — we are as much an entrant in Ontario or almost all parts of Quebec as Videotron or a Cogeco would be in western Canada.
“We are precisely the type of competitor that you want purchasing these inputs and bringing more competition into these markets…these are the people you want coming east in this case and bringing more competition,” he added. “There’s no principal reason to exempt us from the ability to purchase these inputs; it would be bad for competition, bad for customers, bad for Canada, but highly protectionist and highly good for certain large players that have asked you for this.
“And we don’t want any protection, either,” he said, alluding to competitors coming into Telus’s own operating territory, using its networks, and offering their own differentiated services.
As such, the Vancouver-based telecom said the CRTC must look to regions on a case-by-case basis. It said, generally, the mandated regime should not apply to high-cost builds, including those in rural and remote communities because it’s expensive enough to commit to those already. (Eastlink called Tuesday for the CRTC to exempt smaller regional providers from wholesale requirements in newly built or recently upgraded areas.)
Telus added that the existing disaggregated regime – which the CRTC has preliminarily said is not feasible because it’s prohibitively expensive for competitors to connect to many more points – is the best option for access to last mile fibre because it forces the competitor to lease or build their own transport separately, which gets them to commit to the build long term.
Bell and Telus shared the perspective Wednesday that having competitors get their own transport network would create duplication and therefore resiliency, minimizing a single point of failure in the case of a network outage.
Bell is arguing that the big three, including Rogers and Telus, should not be able to access the aggregated last mile fibre regime anywhere because it would create a scenario where the incumbents would ride on each other’s networks and won’t have the incentive to invest.
It’s a recommendation it made in its petition to cabinet challenging the CRTC’s November decision to temporarily mandate that access in Ontario and Quebec, allowing competitors to package the transport and last mile fibre instead of seeking out their own middle mile. It has already announced fibre investment cuts of over $1 billion in response to the order.
Bell took up its grievance with the Federal Court of Appeal, which said it will hear its legal arguments but denied its application to immediately suspend the CRTC’s decision.
Bell also argued Wednesday that wealthier and brand-powered incumbents being able to access the networks of smaller regional players would devastate wholesale competitors – a point with which Cogeco and Eastlink would agree.
Bell spent time arguing that competitors have not taken up the higher speeds offered by direct fibre and urged the commission to consider capping access speeds at 1.5 Gbps.
If the CRTC is to mandate last mile fibre access with aggregation, Bell, which said the current market has never been more competitive, is recommending the mandate be nationwide on both telco and cableco networks; there be an immunity provision of five years to allow the facilities-based providers to make back their investment and capture customers; there should be a competitor speed cap of 1.5 Gigabit speed; there should be a phase-out of the disaggregated regime; adjust the last mile fibre rates set for the temporary regime; and freeze fibre-to-the-node wholesale rates.
Over the past couple of days, the CRTC has heard a broader argument that allowing aggregated access to last mile fibre would not only stunt investment but would negatively impact wholesalers as well.
That was an argument put forward Tuesday by SaskTel, which said there are smaller players building fibre networks in the province who could change their business model in light of that. Doug Kosloski, SaskTel’s vice president, corporate counsel and regulatory affairs, called this one of the “unintended consequences” of such a policy decision.
SaskTel argued that, if mandated, Saskatchewan should not be included in the mandated regime because of the size of the Crown corporation relative to the other telecoms, the fact there are two facilities-based providers in every community, and because the province’s terrain makes it especially costly and difficult to build.
When asked about the new policy direction from cabinet directing the CRTC to implement an aggregated regime, SaskTel representatives noted – like Telus representatives after them — that the direction doesn’t say it must be applied everywhere or in the same manner.
If the CRTC decides to include it, SaskTel must be able to recover its costs and be able to invest in the future, its representatives said Tuesday.
The large telecoms also urged the commission not to forget that the recent period of high inflation and interest has led to even more expensive builds, which is adding to the pressure.
Meanwhile, the Public Interest Advocacy Centre and OpenMedia argued Monday that the CRTC should mandate last mile fibre access under the aggregated regime because consumers want fibre and the higher speeds it provides.
Screenshot of Stephen Schmidt, Telus’s vice president of telecom policy and chief regulatory legal counsel.
