Wholesale-based ISPs at a ‘critical’ crossroads: CNOC’s Stein

TORONTO — Smaller, wholesale-based internet service providers may be facing a whole new era next year, president of the Canadian Network Operators Consortium (CNOC) Matt Stein told an industry conference. Key regulatory files like the fight over wholesale broadband rates and whether to mandate access by mobile virtual network operators (MVNOs) to wireless networks will determine what that era might look like, he said at the CNOC-organized ISP Summit. “There’s so much at play. This year matters more than the years before, and it seems things continue to only increase in this regard,” he said. “The crossroads we’re at is a critical one.” In August, the CRTC established a new pricing regime for the selling of wholesale internet rates that dramatically lowered the rate at which the companies must sell bandwidth to resellers. Incumbent telecoms, which stood to owe roughly $350 million in retroactive payments to resellers, are appealing the decision. The Federal Court has since put a temporary pause on that decision, and the appeal process is ongoing. “The battle we’re in with the incumbents has the potential to significantly impact all of us here, our individual businesses but also all of us as a collective,” he said. Stein noted that another important file will be the final disaggregated rates that are still forthcoming. That August CRTC decision only affected rates under the older, aggregated wholesale regime. Access to fibre-to-the-home-networks is only available under the newer disaggregated regime, which was in 2015 initially welcomed by CNOC and small providers in general. But last year at the conference, Stein said the disaggregated system had turned out to be unworkable, and CNOC asked the CRTC to reconsider aspects of the regime. The group told the panel in charge of reviewing Canada’s broadcasting and telecom laws that many wholesale-based ISPs could shut down as a result. “The practicality of establishing the number of interconnections required under that disaggregated regime as well as the capital required to do so means disaggregation has done more than simply raise the barrier to entry, it has moved it out of reach. Not for some, likely for all,” Stein said Tuesday. Stein also flagged the upcoming review of the CRTC’s wholesale wireless policy — which will consider, among other issues, whether to mandate that access by MVNOs to incumbent networks — as an important one. “5G, MVNO, these are the topics that will consume us over the next year,” he said. Stein noted that lowering wireless prices was an election promise by Prime Minister Justin Trudeau and other parties during the recently-concluded election campaign. “Telecom became an actual election issue. I mean, that’s incredible. I don’t know if that’s ever happened before, but to hear, well, virtually all the party leaders talk about telecom and talking about what consumers pay for their telecom services shocked me,” he said. Stein’s company, Distributel Communications Ltd., released the results of a survey it commissioned the same day as his speech at the conference. It said in a press release that only three per cent of Canadians subscribe to service from smaller independent companies. The survey, which polled 1,535 Canadians from Leger’s online panel between Oct. 18-21 this year, also found that 45 per cent of Canadians believe there are no alternatives to large ISPs. The margin of error was +/-2.5%, 19 times out of 20. The study comes on the heels of a report from the Competition Bureau this summer that found consumers were still unsure about whether wholesale competitors can provide the same level of service as those larger facilities-based carriers. A “striking” one-third of consumers were not sure what a wholesale-based competitor is, the report added. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

Wholesale-based ISPs at a ‘critical’ crossroads: CNOC’s Stein

News | November 5, 2019

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Wholesale-based ISPs at a ‘critical’ crossroads: CNOC’s Stein

News | November 5, 2019

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