CTS panelists criticize asymmetrical fibre access regime, urge national approach

Industry experts on the Canadian Telecom Summit’s “regulatory blockbuster” panel agreed that Canada's wholesale fibre access regime should be applied on a national level, while voicing their concerns about incumbent telecoms accessing each other’s networks. Panelists on Tuesday covered the many issues facing the industry, including growing regulatory uncertainty, wireless prices, pending cybersecurity and privacy legislation, Indigenous spectrum sovereignty, and the slow-moving pace of the CRTC. The Wire Report’s Paul Park was moderator for the discussion. While debating the regulator’s recent interim decision requiring BCE Inc. and Telus Corp. to provide wholesale access to their fibre-to-the-premises (FTTP) networks — with fibre optic cables that run directly into customers’ homes — in Ontario and Quebec, panelists said it creates an asymmetrical system. “It encourages, for example, Telus to resell Bell in the east with no corresponding ability to do it in the west,” said Ted Woodhead, president of Woodhead Regulatory Consulting and former chief regulatory officer at Rogers Communications Inc. “That was a big mistake.” Christian Tacit, external counsel to the Competitive Network Operators of Canada (CNOC), shared the sentiment, saying there are better constraints that could have been imposed if incentivizing large telecom companies to keep investing in their fibre infrastructure was such a big concern. “There is a big issue relating to whether incumbents should be allowed to access each other's networks on a wholesale basis,” he said. Tacit noted that it is not just smaller competitors who have expressed concern, but also Bell. He alluded to a recent request from the company asking the CRTC to block incumbents from FTTP wholesale access. It was denied by the commission. “When you're talking about the incentive to invest, one of the less costly ways to deal with that… is to prohibit incumbents from accessing each other's wholesale products within territory,” he said. Iristel founder and CEO Samer Bishay agreed that the access regime needs to be applied nationally, but he stopped short of wanting incumbents to be explicitly blocked from accessing each other’s infrastructure. “Any access to that infrastructure should be done equally,” he argued. “While I see the point of not having incumbents build on incumbents, at the end of the day, if an incumbent has to build a parallel network, as an example, the cost will get moved down to the consumer, whether we like it or not,” he warned. Bishay called for a regime that balances access, price reduction, and investment, proposing requirements for a certain amount of redundant networks to be deployed. Struggles in the MVNO framework Bishay painted a bleak picture of the Canadian telecom industry as a whole, saying it is “running on fumes.” He blamed it on the “constant grappling” with regulatory uncertainty and overburden, “relentless” market shifting, and pressure in competition. The mobile virtual network operator (MVNO) access regime is one such area where these frustrations can be seen. The MVNO framework requires incumbent telecoms to sell access to their mobile networks to regional service providers, but only those that own a level of spectrum assets and commit to investing in their own infrastructure. The period of mandated access is restricted to seven years. Bishay noted that more companies are having to resort to final offer arbitration when negotiating deals. “These negotiations should not require an intervention by the regulator. If this was a free market economy,” it would not be necessary, he exclaimed. “Luckily for us, we have this to kick in because otherwise it'd be almost impossible to reach a fair deal.” The other two panelists butted heads over whether the access model is too limited and if a seven-year timeline for MVNO operators to build out their network facilities is necessary. Tacit argued that the timeline is “arbitrary” and not based on actual market data, while Woodhead justified it by saying it gives MVNOs time to become more sustainable competitors, adding that wireless prices are on the decline. Privacy and cybersecurity are critical Touching on the legislative front, the panelists supported the intentions of Bill C-26, the Critical Cyber Systems Protection Act; and Bill C-27, the Digital Charter Implementation Act. “Cybersecurity is a national priority,” said Tacit. He applauded provisions in the bill that would require companies to implement risk assessment programs at the corporate governance level. He encouraged audience members to consider adding cybersecurity to their own corporate mandates. Tacit noted, however, that the question remains if companies will be supported in absorbing the costs required to comply with the proposed legislation. Woodhead also expressed some wariness. “I get why need to do something, I'm just not sure — as they rush in — they won’t do damage or do things that are unintended consequences,” he said. Recognizing the importance of the CRTC, the panelists concluded by highlighting some growing issues they have been seeing from the regulator. “The commission has been used as a dumping ground for every possible thing that the government has dreamt up,” said Woodhead. “Right now they're knee-deep in all of the various aspects of the broadcasting regulation.” He explained that the growing workload for the commission is slowing down the many proceedings under its belt. Bishay, closing out on a positive note, said he supported the regulator’s newfound support for competition. “I love the fact that the CRTC finally has some commissioners that were actually in the trenches for side and not the incumbent’s side,” he said. – Reporting by Phalen Tynes-MacDonald at pcreed@thewirereport.ca

CTS panelists criticize asymmetrical fibre access regime, urge national approach

News | June 20, 2024

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CTS panelists criticize asymmetrical fibre access regime, urge national approach

News | June 20, 2024

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