Canada Orders Phone Companies to Offer Wholesale Access to Fiber-Optic Broadband — Update

By Paul Vieira

OTTAWA--Canada telecommunications regulator on Monday ordered the country's big phone companies to make available their fiber-optic internet services to small independent broadband providers, saying this would improve access to higher-speed internet for households and bolster competition in the sector.

The Canadian Radio-television and Telecommunications Commission said the decision was triggered by worries over a decline in competition in internet services.

In response, Canada's biggest telecommunications company, BCE, said it would reduce planned capital expenditures for the 2024-25 fiscal year by 1 billion Canadian dollars (US$729.9 million).

Wholesale-based internet providers, which lease network space from bigger telecoms, were losing market share, the regulator said. For instance, it said large internet-service providers have acquired smaller rivals, and that has left "many Canadians with fewer options for high-speed Internet services."

On a temporary basis, the regulator said it would compel Canada's big telephone companies--BCE and Telus--to provide wholesale access to their fiber-optic networks, starting next May. The ruling is limited to the country's two biggest provinces, Ontario and Quebec, home to about 60% of the Canadian population.

"Higher-speed internet service, for which demand continues to grow rapidly, is a market segment where wholesale-based competitors have fallen behind incumbent companies," the CRTC said in its decision. It added that independent service-providers lack a "practical" way to access the telephone companies' fiber-optic internet.

"This decision provides a temporary and expedited solution to those problems," the regulator said. It added that it expects this would help wholesale-based competitors offer fiber-broadband services to about five million households. It also set a rate schedule BCE and Telus must abide by.

The transmission of data through fibre-optic cables instead of traditional copper or coaxial cables is supposed to result in higher data speeds and better connectivity.

BCE, based in Montreal, said that prior to the CRTC order, it had planned to roll out fiber-optic internet to nine million locations by the end of 2025. BCE would "now re-consider pending builds in all communities where it had planned to expand," with the 2025 target coming in lower to 8.3 million locations.

BCE added that the decision forces the company to open up its fiber-optic network in Ontario and Quebec, but doesn't mandate such access in western Canada, where its rival Telus is dominant. "If the intent of the decision is to benefit consumers then it is arbitrary and capricious to leave western Canadian consumers behind."

A spokeswoman for Telus wasn't immediately available for comment.

The regulatory order comes as Canada's Liberal government has pledged to strengthen competition rules to ensure consumers get access to products and services at lower prices. The governing Liberals trail their rival Conservatives by a sizable margin in public-opinion polls, in part, political analysts say, for their inability to address voters' concerns over cost-of-living issues.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

November 06, 2023 19:55 ET (00:55 GMT)

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