(Bloomberg) — Canada chose not to overturn a regulator’s ruling that forces the largest telecom firms to lease their broadband networks to rival companies, defying the wishes of some of the largest players including BCE Inc. and Rogers Communications Inc.
Industry Minister Melanie Joly announced the decision late Wednesday in a social media post. “This will immediately allow for more competition on existing networks for high-speed internet services across the country,” she said.
The country’s telecom regulator had previously decided that BCE, Telus Corp. and Saskatchewan Telecommunications Holding Corp. “must provide competitors with workable wholesale access to their fiber networks” at regulated rates.
Cable companies are also required to allow rival firms to use their networks “to serve consumers at the highest available speeds.”
The government had the power to quash that decision. BCE, Rogers and others including Cogeco Inc. have lobbied hard for Joly to do exactly that. They’ve argued that they’ll have to cut back on billions of dollars in investment in broadband networks if other companies are allowed to simply ride on the back of it with competing services.
BCE Chief Executive Officer Mirko Bibic said in an interview that the company is now focused on ensuring the government understands “that network builders who build at significant cost and take significant risk are fully compensated for those build costs and that investment risk.”
“The Carney government has declared its priority is to build a strong Canada and this decision does the exact opposite. It does not incent Canadian companies to invest in Canada,” a Rogers spokesperson said in an emailed statement.
Cogeco said in a news release that it is “dismayed” by Minister Joly’s decision and intends to continue challenging the policy regime in court.
On the other side of the debate is Vancouver-based Telus, which stands to gain overall. The new policy will allow it offer competitive broadband packages in Ontario and Quebec, two provinces that have about 60% of Canada’s population but where the company has not built out extensive broadband networks and has minimal market share. That new addressable market more than offsets the increased competition it’s likely face in its less-populated home province of British Columbia.
–With assistance from Stephanie Hughes.
(Update with statements from BCE and Cogeco in the sixth and eighth paragraphs.)
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