A national framework allowing small internet service providers to offer services to their customers using their competitors’ fiber optic networks would offer residents of remote areas more affordable options, the CRTC was told Tuesday.
Rizwan Jamal, president and CEO of New Brunswick-based Xplore, said that while his company seeks to expand its own fiber optic network in rural and remote areas, it is at a disadvantage compared to operators operating on a larger scale. ladder.
“If we want to be able to be competitive with the incumbents on innovation, on price, over time, it is absolutely essential that we gain scale,” Mr. Jamal told the a committee of commissioners of the Canadian Radio-television and Telecommunications Commission (CRTC).
“Wholesale access will allow us to scale, particularly in rural and remote areas of Canada. »
The federal telecommunications regulator will spend the week hearing from more than 20 groups, including internet service providers, advocates and other stakeholders, as part of its review of internet competition in Canada.
The five-day hearing focuses on issues such as the current efficiency of internet service markets, potential changes needed to spur competition and how the CRTC can incentivize companies to invest in high-quality services.
The CRTC announced last November that it would temporarily force major telephone companies, including Bell Canada and Telus Corp., to provide competitors with access to their fiber-to-the-home networks in Ontario and Quebec in a period of six months.
The move was aimed at boosting competition for internet services in those provinces, where smaller providers have been found to have increasingly been taken over by larger companies in recent years.
This week’s hearing could impact the CRTC’s decision to make this directive permanent and apply it to other provinces.
Xplore’s fiber internet network currently serves around 65,000 homes, a figure the company hopes to increase to more than 400,000.
Jamal said the company can afford to expand its network in more densely populated communities with the support of federal and provincial grants, but in less dense areas it can be difficult to get a return on the network. investment.
Expanded wholesale rules could help fill these gaps in services, he argued.
“Having this mandatory access in communities close to or adjacent to the communities we are building will give us scale in these communities,” added Mr. Jamal. Most of the communities we serve are small and we need local technicians. If they can serve larger pockets of households, it will improve our ROI… while still offering competitive pricing. »
No “sustainable competition”
But if wholesale high-speed internet access is not mandatory in rural areas, Rizwan Jamal believes residents will be left behind.
“Over time, we will not have sustainable competition,” he said. In these areas, they would be deprived of the benefits associated with the access provided in urban and suburban areas, which would grant these particular households additional choice, increased competition and more affordable prices. »
Other operators, like Bell, spent the days leading up to the hearing opposing the expansion of wholesale fiber access rules. Bell said the temporary rules, which the company is appealing, already diminish the business case for its investment.
Halifax-based operator Eastlink also criticized this view during the company’s appearance Tuesday.
Executive vice-president Lee Bragg said that if the CRTC prioritizes increasing choice in internet access for consumers while making it less attractive for businesses to spend money to build networks, the result will be “reduced competition and lower quality networks, particularly in small, rural and remote communities.”
“Without a global framework that prioritizes investments […] Eastlink will be forced to reconsider our presence in some of our rural communities where the business case for continued investment no longer exists,” Mr Bragg warned.
He noted that over the past few years, Eastlink has stopped offering services in 62 communities where it could no longer justify the costs.
“In rural and remote communities, the business case for providing a service is already extremely difficult,” Mr Bragg said. These challenges can become insurmountable when there is a need to immediately provide wholesale internet access, particularly at rates that do not adequately cover the cost of providing the service. »
The CRTC is expected to hear representatives from Telus and Bell on Wednesday.