It’s always amusing when telecoms join forces, single out an industry rival and then purport to champion consumer interests.
Grab your popcorn, folks, because this latest dogfight over competition in the high-speed Internet market is a doozy.
Need a primer? No problem.
The federal government is upholding a decision by the telecom regulator that allows large companies to resell high-speed Internet service over each other’s fibre-optic networks. The goal, according to Industry Minister Mélanie Joly, is to increase competition and lower prices across the country.
Specifically, the Canadian Radio-television and Telecommunications Commission, or CRTC, is requiring the country’s largest telephone companies – namely BCE Inc. BCE-T, Telus Corp. T-T and SaskTel – to give competitors wholesale access to their fibre networks.
(Cable companies, such as Rogers Communications Inc. RCI-B-T, are required to provide resellers with network access under a concurrent policy.)
Opinion: Ottawa should reverse the CRTC’s decision on wholesale internet access
There are, of course, provisos baked into the CRTC’s wholesale fibre network decision. The regulator will set the final rates (likely by the end of this year), and large internet service providers, including cable companies, can only piggyback on competitor networks to provide resale services outside of their home turf.
The policy allows for more competition on existing networks and paves the way for major players to offer discounted bundled services, including wireless, in new provinces. Trouble is, many companies in the industry are upset by the government’s decision to back the CRTC’s ruling and vow to keep on fighting the policy.
Some companies are still pursuing legal action, others are threatening to slash network investments and an industry association is claiming – get this – the decision is bad for consumers. (Aw, so sweet.)
One would think that telecom companies would jump at the chance to vie for new customers outside their traditional territories at a time of reduced immigration and heightened concern about building a unified Canadian economy.
But Telus, it seems, is the only major player willing to compete outside its established footprint, which spans Western Canada and parts of eastern Quebec.
The Vancouver-based telecom, which is already offering its resale service in new markets, is especially focused on acquiring more customers in Toronto, Montreal and Quebec City. (Telus’s market share in Ontario and Quebec is less than four per cent.)
Instead of giving Telus a run for its money on its traditional power base by riding on its fibre network and poaching its customers, the telecom’s competitors are teaming up to thwart its ambitions elsewhere in Canada. And they’re gaslighting Canadians in the process.
Cogeco Communications Inc. CCA-T and Bragg Communications Inc.’s Eastlink are trying to appeal the CRTC’s decision in federal court.
“Unless corrected, this policy will have a detrimental impact on consumers and the broader Canadian economy,” said Frédéric Perron, Cogeco’s president and chief executive officer, in a statement.
Cogeco is arguing that Ottawa is “unfairly empowering” the Big Three – Rogers, Bell and Telus – to expand by “reselling the networks of smaller regional players.”
Eastlink, which operates in Atlantic Canada, has said it is suspending planned upgrades and intends to identify communities that will become unprofitable and “require shutdown.”
Let’s get down to brass tacks.
This is primarily about the battle for Ontario and Quebec (sorry, Nova Scotia and Saskatchewan), and it is specifically about foiling Telus.
As my colleague Irene Galea has previously reported, both Rogers and BCE oppose the government’s endorsement of the CRTC decision.
For its part, Rogers has said Ottawa’s position “does not incent Canadian companies to invest in Canada.” BCE, meanwhile, has said its Canadian fibre build is “largely going to plateau.”
Instead of using the CRTC decision to compete in Western Canada, BCE is focused on providing fibre internet services to more households in the western United States over the coming years through its acquisition of internet provider Ziply Fiber.
I’m sure Canadian customers will completely understand why the Montreal-based company is putting America first.
That brings us to the Canadian Telecommunications Association, which is also “extremely disappointed” that the government chose to support the CRTC decision.
Unsurprisingly, Telus is not one of its members.
“This decision undermines the very goals it claims to support. It discourages investment, weakens competition, and ultimately harms Canadian consumers,” the association said in a statement.
Part of the group’s rationale is that the CRTC policy undercuts smaller independent service providers.
That’s right, let’s keep pretending that telecom isn’t a game of scale.
Don’t believe me? Ask Distributel, which was sold to BCE, and VMedia, which was acquired by Quebecor Inc.
The association’s president and chief executive officer Robert Ghiz warned the government’s position would “reduce meaningful competition, limit consumer choice, and slow progress in connecting underserved communities.”
Here’s the thing: Canadian consumers don’t believe these companies had any intention of serving rural and remote communities in the first place.
Nor do they care if their internet service is provided by a reseller or a network owner. They just want the best possible deal on all their telecom services.
So, here’s a novel idea for our country’s telecoms.
Instead of griping that Telus is operating as a reseller by using fibre networks that it doesn’t own, learn to compete for Canadians’ business.