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  • Ted Woodhead

Sometimes, the right answer is simply NO!

I was happy to receive some questions last week based on my post following the week long CRTC hearing related to the Review of the Wholesale High-Speed AccessFramework. One question which came from a few people, asked for my view of the position taken by some in the hearing that out of territory resale by the big three carriers should be allowed by the CRTC.

I thought I had made my position on that question relatively clear, but on rereading perhaps not. So to be emphatically clear, I do not agree with the proposition that the big three incumbent network providers should be encouraged or permitted to resell their primary competitors' networks.

I am fundamentally opposed to any suggestion otherwise for three reasons,

First, perhaps the greatest benefit of longstanding Government and CRTC policy favouring facilities-based competition has been the near ubiquitous building of competing physical networks by the big three carriers. It has delivered choice, lower prices, innovation and rivalry between them. That's like winning the trifecta in a race for the best performing public policy. The CRTC should double down on it.

Telus' position seems to be that it should be able to resell the fibre-based and/or DOCSIS networks of its competitors in the East while those same competitors are prohibited from reselling Telus' fibre networks in the West. This is self serving and disingenuous at best. It would on its face be competitively distortionary.

Wholesale Internet revenues are comparatively very low in British Columbia and Alberta as opposed to Ontario and Quebec according to the just released "Annual highlights of the telecommunications sector 2022", figure 12. It would seem foolish to accept Telus' position in that regard. Wholesale activity generally in the West is already muted, so for the CRTC to perpetuate that does not seem to make any sense at all.

Under Telus' scenario, the result of this proceeding could encourage them to lease access rather than building it. That would be a result that would fly in the face of a successful decades long policy. The Competition Bureau mentioned the problem of providing access at rates so low that they would suppress investment. That is what the CRTC should guard against and Telus' position seems contrary to that objective. In its view, its not a question of rates it is simply that it does not want to resell its fibre-based networks at all.

Second, Telus' proposal could imperil the prospects of smaller providers who are or want to invest in building competing networks in the East and the West and I thought both Cogeco and Videotron did a very good job of highlighting the asymmetry of that as did Bell Canada, who while not a small provider, is being discriminated against in the current version of the proposal before the Commission.

Lastly, I believe that Telus' position could intentionally or otherwise have the effect of muting competitive responses in the West as it faces a stronger competitor in Rogers. These are not outcomes the Commission would favour or want. It was also a theory that the Competition Bureau seemed to recognize as a distinct possibility.

So, as the title to this post asserts, sometimes the right answer is simply NO!


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