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.

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Comments on “Canada Opens Incumbent Fiber Networks To Competition, Cue The Hysteria”

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Anonymous Coward says:

Re: Cue the economic sanctions...

Ah… but the US doesn’t have to get involved here. Once the new trade agreements go through, the multinational telecommunications corporations will be able to sue Canada for harming their profit margins.

I still can’t figure out how even politicians can see corporate sovereignty as a good thing. In the long run, EVERYONE loses.

Anonymous Coward says:

Re: Re:

Back when Canadian ISPs were nationalized, there were totally different issues.

I can remember back when Captain Crunch & friends used to hang out on a BC Tel local loop that hadn’t been set up correctly. The system that they were connecting in to was commissioned sometime in the 60’s and shoved to the back of a server closet — so even after BC Tel started upgrading to DTMF equipment, the old loop was still happily running along, doing nothing other than acting as a hangout for phreakers from around the world.

When BC Tel went private and merged with Alberta’s Telus, things got streamlined, which included discovering the old loop and taking it offline.

The problem with government-owned telcos was that they had no motivation whatsoever to innovate, as THEY aren’t elected. The only way to really influence them is with budget cuts, and that’s counterproductive.

This is one of the limited areas that I feel the CRTC actually got right; governments subsidized laying copper and optical cables, and now get to open them up to all comers, driving competition.

Of course, that doesn’t help most of the (non urban) country, where the only fibre is in the trunk lines and cellular connectivity is hit and miss.

Anon says:


Canada is much of a “big fish, small pond” economy. Combine that with the same takeover mentality that has happened elsewhere, and a few big fish control a huge amount of the communication infrastructure. There are two non-overlapping companies that own much of cable, only two or 3 telecom suppliers, and Rogers Cable and Bell own the two major cellular networks, with telus the other player. These conglomerates are also buying up the network broadcasters.

The CRTC recognizes the danger of limited competition. We pay some of the highest rates and worst options in the developed world (maybe excluding the USA). CRTC is trying to encourage competition in TV, cable, in Cellular, and so on.

Anonymous Coward says:

Re: TOR ISP is needed badly

It’s not really clear to me how this would be useful. People can run Tor today on any ISP, and pay someone (e.g. to run exit relays. Unless the ISP forces everyone through a bridge, they’ll need paths to everywhere on the internet, like every other ISP. I suppose they could offer an option to block unencryped traffic, maybe via a custom PPPoE login so it could be switched on or off. It would also be interesting for independent ISPs to measure Tor usage and provide matching exit bandwidth.

What I think we need is an ISP that sends all traffic via a completely encrypted tunnel, so the incumbent ISPs see nothing (and can fuck with nothing–they’ve throttled BitTorrent, games, etc. before). An extra benefit would be that ISPs wouldn’t be limited by incumbents–ISPs like TekSavvy have said they can’t provide features static IPs, IPv6, asymmetric routing, and cable+DSL aggregation, until the incumbents decide to implement them.

Anonymous Coward says:

The reduction in investment isn’t going to happen in the metro areas that are already served. Even open there will still be enough to make money. but it will affect investment in marginal areas, increasing the density needed to justify the expense of a build out. Whether this is net gain or loss overall probably depends a lot on where you’re at.

Anonymous Coward says:

Re: Re:

You make the assumption that a for profit business would use profits made in one area to subsidize other areas that would operate at a loss. That’s not likely and it certainly should not reflect how laws are passed to limit competition. Imagine if Walmart or any company was given a special monopoly because they may donate some of their products or services to charity. No one should ever be given monopolies based on what they may ‘donate to charity’ or provide for someone that would otherwise not be provided for. That’s like giving Walmart some extra tax dollars (a monopoly results in more income) in hopes that some of it would go to charity at Walmart’s discretion.

No, providing these under served or unserved areas that aren’t profitable shouldn’t be left to the ISPs to do at their discretion in exchange for a monopoly in other areas. Why should my neighborhood suffer a monopoly just so that my ISP would maybe serve someone else’s neighborhood. No, this should be seen more as a government function (granting monopolies is a worse government function). Communities should have a choice of how they want to handle the situation. They can either build and operate their own broadband services or provide taxpayer money to an ISP to build and operate one for them provided the ISP meets certain conditions. Or perhaps a larger community can provide taxpayer money to either build or pay an ISP to build a broadband network in unserved areas where the free market falls short. In this way the government can take bids from ISPs, monitor progress, and ensure that they are getting what they paid for and perhaps impose sanctions if the ISP doesn’t deliver what they promised (kinda like how governments started imposing sanctions if construction companies don’t meet deadlines). This is how government often works. For instance when they need services from the private sector for a given government function they take bids. They don’t give certain companies a monopoly in exchange that hopefully, just maybe, that company will use the proceeds to provide free service in another community.

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