Bell to appeal CRTC Internet ruling
Company must open connections to competitors, commission says
Canadian Internet subscribers will have to wait at least another 90 days to find out if increased competition in Canada's broadband Internet industry will have any impact on their bills.
Bell Canada said Wednesday it will appeal to the federal cabinet a decision Monday by the Canadian Radio-television and Telecommunications Commission (CRTC) that incumbent companies like Bell must open Internet connections to competitors and provide unimpeded access.
Monday's ruling restates an earlier decision by the CRTC against Bell in late 2008. At that time, Bell appealed the decision to the federal government. Cabinet overturned the decision and ordered the CRTC to reconsider.
"Cabinet accepted our appeal and asked the CRTC to look at this again," said Mirko Bibic, Bell Canada's executive vice-president of regulatory affairs. "I am astonished at how the CRTC can come back and give cabinet the very same decision that cabinet asked them to look at again. We are certainly going to be making our views well known."
The company said it plans to appeal the decision to the federal government. Cabinet has 90 days to rule on the CRTC's decision.
Bibic said if allowed to stand, the decision could negatively impact the company's future investments into network upgrades.
"In order for us to do more, we need the right conditions in place so we can maximize the returns on our investments," he said. "Industry Canada and the federal government want us to do more, yet the CRTC decided on Monday to put rules in place that don't allow us to generate the returns we need to generate in order to do more."
The CRTC ruling says that Bell must open the lines between a neighbourhood switching station and a home. The company can charge a 10-per-cent premium above its wholesale rates for allowing the competitors to use the lines.
While many newcomers to Canada's high-speed Internet industry have been spending millions to pull fibre-optic backbones across the country, getting into a subscriber's home has proven tricky because incumbents, such as Bell, own the lines.
Putting new lines into homes and neighbourhoods is too costly and would make too much of a mess.
The CRTC said not only must those lines be opened to newcomers, but Bell cannot dictate how fast the Internet connection coming through those pipes can be. Newcomers should be able to provide customers with speeds that rival those supplied by Bell.
Bell has been spending billions on upgrading its Internet networks across Canada. In recent years, the company has been reluctant to let competitors use that new equipment, said Tom Copeland, chairman of the Canadian Association of Internet Providers.
"It's a bit of smoke and mirrors. We are already delivering services across those connections. But, we are being restricted to six (megabits per second) or less," said Copeland. "Bell is restricting the speed capabilities. We don't have access to the speeds that Bell does."
Copeland argues that by preventing newcomers from selling competing products Bell is creating a competition-free stranglehold for next-generation Internet services.
The company has recently been advertising its new FIBE service which provide Internet connections between 15 megabits per second (Mbps) and 25 Mbps. Depending on where a person lives, some trials of newer transmission technology allow people to receive Internet connections of up to 100 Mbps.
Canadian households are receiving around an average of 9 Mbps transmission speeds according to Speedtest.net, a website that collects connection information from millions of visitors globally on an annual basis. The country is ranked 31st out of 181 countries worldwide.
Higher speeds become important as more Canadians play video games and receive their TV and phone services over the Internet.
Copeland said if the Conservative government upholds the CRTC decision, Canadians can expect higher Internet connection speeds and lower monthly subscription pricing coming from numerous new entrants within the next six months.
Regulators should go one step further, said Sam Paltridge, head of telecommunications work in the Directorate of Science Technology and Industry for the Organization for Economic Co-operation and Development (OECD).
"We support the CRTC in this action, We would argue that the CRTC should push for a stronger form of unbundling."
Unbundling is a process where the Internet cables running through neighbourhoods and into homes are taken away from the incumbents, either through a sale or through legislation, and opened for use by all Internet providers who would share maintenance and upgrade costs.
The move could ensure that competitors gain access to new customers. After unbundling, customers in France and Germany saw large pricing discounts, speed increases and new services, such as Internet-based TV and phone.
In the early 2000s, Canada's broadband Internet was the envy of the world. Last year, the OECD released a report ranking Canada dead last in OECD nations when it comes to the prices paid for Internet service.
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