Mandated wholesale access to FTTP wouldn’t deter investment: Shaw

GATINEAU, Que. — Shaw Communications Inc. on Friday took a different tack than other large Internet service providers that have spoken before the CRTC’s wholesale wireline hearing this week, endorsing mandated wholesale access for fibre-to-the-premises (FTTP) connections. Other companies, including BCE Inc. and Cogeco Cable Inc., have told the commission that FTTP is a distinct service from traditional copper connections to the home and should not be opened up to wholesale third-party Internet access (TPIA). Shaw chief operating officer Jay Mehr said that was a distinction without a difference, and that both broadband connection methods should be treated as the same product. “If there is mandated TPIA on next-generation services, then absolutely there needs to be mandated reseller access to fibre-to-the-premises,” he said. However, Mehr stopped well short of endorsing the current regulatory regime for wholesale Internet access. The CRTC should no longer set wholesale rates, he said, and compel companies to negotiate with one another to determine prices. “We think it's an incredibly competitive market, and we think wholesale works,” he said. “We could do commercially negotiated wholesale on all elements of the broadband network.” He added that the CRTC should also change its wholesale-access policies to exclude speeds above 25 Mbps, which he said the “vast, vast majority of customers today” are at or below, to allow “market forces and consumer choice” to help spur investment in new, faster technologies. In other words, although the network might be capable of speeds of more than 25 Mbps, a smaller ISP offering service at that speed or slower would still have mandatory access, according the Mehr’s suggestion. He pointed to a TPIA provider that bundles Internet service with Chinese-language TV channels as an example of a wholesale company that brought added value to Shaw. “We think that kind of innovation enabled by our wholesale is good for consumers,” he said. “I'm a little embarrassed that we weren't filling that space better ourselves, but they're taking a space that we weren't filling ourselves and moving things forward.” Allowing telecom carriers to monopolize their own fibre networks, Mehr said, provides a perverse incentive to build out that wouldn’t help customers or improve service. “I would hate to have a regulatory environment that forces us to dig up people’s front lawns, because if we did, we wouldn't have to resell that network,” he said. Mehr also disparaged the idea that wholesale access would deter investment in FTTP networks, saying the logic of building out high-speed networks was too strong. “We don't whip up and say we're going to stop investing,” he said. “To be clear, we are going to continue to invest and we're going to continue to compete regardless of the outcome of this hearing.” Representatives from Manitoba Telecom Services Inc. echoed some of Mehr’s arguments, saying that while mandated access provides an important tool to encourage competition for business-class Internet connections, prices for that access should be determined by commercial negotiation. “We believe that such an approach is efficient, minimally intrusive and relies on market forces to the greatest extent possible,” Allstream president Mike Strople told the hearing. Strople and MTS vice-president of regulatory affairs Russ Freisen drew a distinction between business services, where they said the CRTC still needs to act as a “backstop” for negotiations, and the residential market, where competition is “vibrant.” Freisen said the CRTC has an important role to play in negotiations for business Ethernet connections as a regulator of last resort in situations where a dispute arises. “Parties must be able to call on commission-dispute-resolution mechanisms in the event that a commercially reasonable agreement cannot be reached by the parties within a reasonable amount of time,” he said. The level of competition in the residential market for Internet access in Manitoba, MTS president Kevin Shepherd said, is evidence enough for the CRTC to forbear on regulating wholesale access for FTTP. “Fibre is a long-term investment, with a long payback, even under ideal conditions,” Shepherd said. “The introduction of further regulation or obligations to make FTTH available to others would only increase the risk associated with MTS undertaking these investments, making them less attractive.” Mandating wholesale access for residential FTTP is “a solution looking for a problem,” he concluded. — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Mandated wholesale access to FTTP wouldn’t deter investment: Shaw

News | November 28, 2014

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Mandated wholesale access to FTTP wouldn’t deter investment: Shaw

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