Independent Internet providers appear to have won a partial victory after the federal telecom regulator made what it called some “significant reductions” in the wholesale rates big phone and cable companies charge them for Internet connectivity.
However, the regulator also increased the rates three cable companies can charge the ISPs, which will find its way into the bills of subscribers.
In a complex series of decisions issued Thursday, the Canadian Radio-television and Telecommunications Commission (CRTC) tried to finalize a 2011 decision that ISPs hope will allow them to compete against the incumbents by offering competitive Internet speeds to residents.
It didn’t completely do that: the commission wants to consult with the industry on lingering issues not covered by Thursday’s decisions.
But in a statement CRTC chairman Jean-Pierre Blais said the decisions should help competition.
It lowered wholesale business Internet rates Bell Canada can charge ISPs in the Maritimes, Quebec and Ontario, and Telus can charge in B.C and Alberta.
“This will result in a more straightforward billing process for independent service providers,” the commission said. Previously, certain large companies charged different rates under different billing models for wholesale and residential business services.
The commission doesn’t regulate the retail rates subscribers pay, but it does control the wholesale rate cable and phone companies charge ISPs for connectivity.
Within minutes of the decisions being issued Bill Sandiford, the head of the Canadian Network Operators Consortium (CNOC), a group of some of the largest independent Internet service providers in the country, was unhappy with the rulings.
For ISPs that buy DSL connectivity from carriers like Bell Canada in Ontario and Quebec, and Telus Corp. in B.C. and Alberta, the ruling is encouraging, he said. The commisision lowered wholesale residential rates it set in 2011 for those carriers.
CRTC opts for capacity-based billing for ISPs
After fielding complaints about user-based billing and getting slapped by the federal government, in November, 2011 the commission set a new policy around capacity-based billing which was supposed to solve two problems: letting ISPs offer Internet speeds closer to those the big carriers offer, and increasing competition.
ISPs, most of whom buy connectivity from phone companies, hoped the new regime would give them the choice of switching to cable providers.
Instead the ISPs complained that the carriers wanted to impose punishing technical conditions on them to switch to the new billing regime.
In some cases, they said, carriers wanted ISPs to split their residential and business traffic streams in an uneconomical way.
CNOC filed its first objection to the CRTC in January, 2012, barely two months after the capacity-based billing ruling, seeking clarification of rules. That escalated into a call for the commission to take a second look at large parts of its ruling. Some carriers also objected to parts of the ruling.
The result is that over a year after the 2011 ruling many ISPs aren’t much further ahead in their fight to gain more market share.
[More analysis and comment coming]
