Canada Opens Incumbent Fiber Networks To Competition, Cue The Hysteria

from the share-and-share-alike dept

Canadian regulators last week did something that U.S. regulators have long only paid lip service to: they opened up incumbent fiber networks to competition. The CRTC's new ruling notes that incumbent ISPs will need to give smaller ISPs "disaggregated" access to the end user at a regional point of access relatively close to the consumer. These independent ISPs are then responsible for transmitting data from this access point to their own central office, either via owned or leased infrastructure. The requirement will start in Ontario and Quebec, and slowly expand across Canada.

Until now, these ISPs were relegated to the incumbents' slower, last-generation networks. It's the kind of move that incumbent telco execs have nightmares about, but Canada's regulators hope the policy brings in an additional layer of competition for faster fiber services:

"As Canadians participate more actively in the digital economy, they will need access to higher Internet speeds to power their broadband homes and businesses. By continuing to mandate certain wholesale services, and including access to fibre facilities, we are continuing our work to drive competition so Canadians have access to more choice, innovative services and reasonable prices. At the same time, we fully expect that companies will continue to invest in their networks, including in fibre technology, to meet the growing needs of consumers."

Obviously implementation won't be easy. Canadian incumbent ISPs will surely appeal and drag their heels, while taking every opportunity to pout and pretend they'll reduce or halt investment in fiber networks unless the government backtracks on the policy. As we saw in the ILEC/CLEC wars of the late 90s and early aughts when the U.S. still embraced local loop unbundling, incumbents will also do everything in their power to make getting access to these facilities and users as difficult as possible, requiring that Canadian regulators keep their eye on the ball.

It's the kind of policy U.S. regulators have been too afraid to implement for fear of upsetting deep-pocketed incumbent ISPs like AT&T. It's something Google Fiber also initially promised to do but quietly backed off from. A 2009 study commissioned by the FCC (pdf) found that countries that embrace such "open access" policies for last mile connections (instead of building redundant connectivity) see increased competition, lower prices, and better service. Except when the U.S. Government unveiled its "National Broadband Plan" in 2010, open access policies were mysteriously nowhere to be found. In its place was a series of bland, hedged recommendations and hollow goals, carefully designed not to offend campaign contributors or the delicate sensibilities of the status quo.

Until very recently, the U.S. spent the lion's share of the last fifteen years embracing broadband industry "deregulation." While useful in some contexts, in telecom this has essentially meant letting AT&T, Verizon and Comcast literally write the nation's telecommunications law, then promising this would result in a magical broadband Utopia. As a result most independent ISPs were unable to access incumbent fiber networks, couldn't overcome regulatory capture and rigged markets to be able to afford building their own, and were slowly and intentionally strangled out of existence. Your monthly broadband and TV bill tells the rest of the story.

We've since seen other nations successfully take the open access policies the U.S. discarded and make them work very very well. This usually results in bi-annual stories like this one where an American travels to France and is shocked to realize how badly they've been getting ripped off for a decade back home:

"Now we live in the city center of Toulouse, France, in an apartment where I’m a broadband customer of a company called Numericable. Here’s what I get for $63 per month: 100 Mbps download speed, 250 cable channels, a home telephone with unlimited international calling, and a mobile phone that includes unlimited minutes and 3GB of data usage each month."

Yeah, funny how that works. Canada's new policy, if well implemented, is worth keeping an eye on.

Filed Under: broadband, canada, competition, crtc, line sharing, local loop unbundling