CRTC to examine small ISPs’ access to incumbents’ networks

The Canadian Radio-television and Telecommunications Commission (CRTC) will be looking into whether big telecom companies are charging smaller Internet service providers (ISPs) exhorbitant fees to use their networks in order to deliver high-speed Internet service to customers.

The CRTC hearing on wholesale wireline telecommunication services in Canada began Monday. It is the third of three major hearings the regulator is holding this fall.

“We are seeking to ensure that Canadians are able to benefit from a world-class communication system for years to come,” said Jean-Pierre Blais, CRTC chairman, in a statement yesterday. “One in which they have access to compelling content, as well as the choice to innovative wireless services and Internet services, wherever they live in Canada.”

He noted that Canadians have increased their use of Internet services. More than 65 per cent of Canadians subscribe to download speeds of at least five megabits per second and the amount of data they download has jumped by 150 per cent in just two years, from 2011 to 2013.

The hearing will focus on three key themes:

1. Whether changes should be made to the CRTC’s framework for wholesale telecommunications services.
2. What considerations the Commission should take into account when making its decision whether or not to: (a) require the provision of wholesale telecommunications services, including fibre-to-the-premises; (b) step back from regulating services; or (c) re-assert its jurisdiction to regulate services that have been deregulated.
3. Whether changes should be made to the CRTC’s approach for setting wholesale rates, the underlying principles, or the associated processes, in order to improve the timeliness, accuracy or consistency of the rate-setting exercise.

There are some 500 small ISPs scattered across the country, but much of the market is controlled by the top five providers, Bell, Rogers, Telus, Shaw and Quebecor. The five account for 75 per cent of the revenue from residential users.

Five years ago, The CRTC mandated that big telecom providers allow smaller ISPs access to their networks to level the playing field. The CRTC set wholesale rates for the service. However, smaller ISPs said the rates charged by the large operators are too high.

The CRTC also said it wants to find out if smaller ISPs are getting access to the newer fibre networks built by Bell, Telus and Rogers.

“We will consider the current state of deployment of fibre-optic facilities, the economic and social impacts of this technology and the required network investments,” said Blais “This will help us decide, for instance, whether independent Internet service providers should have mandated access to these facilities.”