CRTC decision on wholesale internet rates expected Thursday

·3 min read

The head of Canada's largest telecommunications company said Wednesday that he's hopeful that a revised CRTC decision on wholesale internet rates this week will be more favourable to network owners.

BCE chief executive Mirko Bibic, who is also CEO of Bell Canada, told a virtual conference Wednesday that he takes comfort from a recent CRTC decision establishing rules for wholesale sharing of wireless networks.

The CRTC decided on April 15 that it would require Bell, Rogers and Telus — which own Canada's three national wireless carriers — to allow regional competitors to piggyback on their systems but with certain conditions.

Among those conditions was that regional wireless and internet providers would only be able to use wholesale suppliers for seven years, which the CRTC expects will give them time to build their own networks.

"So I hope that's a good signal for tomorrow," Bibic said in a question-and-answer session Wednesday with TD Securities analyst Vince Valentini.

Canada's telecommunications regulator says it will deliver a review-and-vary decision on wholesale internet rates after markets close on Thursday, essentially a do-over of a controversial ruling issued in August 2019.

In that decision, after years of fact gathering and analysis, the CRTC slashed many wholesale rates charged to smaller internet providers — and ordered network providers to repay millions of dollar in fees.

Bibic, who has been publicly opposed to sharing Bell network infrastructure with rival carriers, said the 2019 wholesale rates decision was "met with widespread derision" by facilities-based internet providers.

It was also met with a political, legal and regulatory campaign by Bell, Rogers and other internet service providers that own most of the infrastructure required to deliver internet to retail customers.

Bell and its allies unsuccessfully tried to get the Federal Court of Appeal to rule against the CRTC, but the court refused last September and said the CRTC had the authority, expertise and regulations to make the decision.

A 2020 cabinet decision allowed the largely independent CRTC to review its own decision, as required by law. But the cabinet decision said the 2019 wholesale rates ruling may not meet all the government's objectives.

"So I think the fact that it was sent back by the government, with that clear indication is also a good sign, but we'll see," Bibic said Wednesday.

Joe Natale, CEO of Rogers Communications Inc. had a similar message during the same TD Securities conference for Canada's major telecom and media companies..

Natale said Canada has some of the world's best telecommunications networks because government policy and CRTC decisions have "reinforced the need to build to the far corners of Canada."

If network owners are forced to sell wholesale access at a loss Natale said "it doesn't take, you know, a lot of thinking to say: Why would we do that?"

Independent ISPs argue that they're willing to pay the big carriers wholesale rates that cover their costs and provide them with reasonable profit — but not the margins currently charged.

Consumer groups have argued prices would fall if more home internet was supplied by independent ISPs and more wireless services were delivered by smaller or more specialized network resellers

This report by The Canadian Press was first published May 26y, 2021.

Companies in this story: (TSX: BCE, TSX:RCI. B)

David Paddon, The Canadian Press

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