crtc speed matching saga
Posted by Laurel L. Russwurm on August 31, 2010
Monday’s CRTC release: CRTC encourages competition and investment in the provision of Internet services
The Canadian Radio-television and Telecommunications Commission (CRTC) today determined, on the basis of the evidence submitted at a recent public hearing, that large telephone companies must make their existing Internet access services available to alternate Internet service providers (ISPs) at speeds that match those offered to their own retail customers. This requirement will ensure that alternate ISPs can continue to give Canadians more choice by offering competing and innovative Internet services.
This CRTC decision seems eminently reasonable; the carriers must make the bandwidth speeds available to their own retail customers available to the customers of Independent Service Providers. This is a real win for Canadian consumers.
The thing is, this decision was already made. Wading through the CRTC release we learn this CRTC ruling was already made as “various decisions issued in 2006 and 2007”.
Why did it take the CRTC four years to make it stick?
Apparently the Federal Cabinet stepped in on behalf of the carriers (Bell et al) and ordered the CRTC to revisit the issue. They were told to ensure speed-matching requirements:
- wouldn’t unduly diminish incentives to invest in new network infrastructure in general and, in particular, in markets of different sizes;
- without speed-matching requirements would there be sufficient competition to protect the interests of users;
- are the wholesale obligations imposed on incumbent telephone and cable companies equitable or a competitive disadvantage; and
- will these wholesale requirements unduly impair the ability of incumbent telephone companies to offer new converged services, such as Internet Protocol television?
In other words, Federal Government interference resulted in four years where the carriers were allowed to discriminate against the Independent ISPs by denying them access to the best speeds. The retail customers of the Independent ISPs could not get the bandwidth speeds that the retail customers of the carrier ISPs could get.
Hardly sounds fair to Canadian consumers.
reactions to the crtc ruling
“The Commission’s refusal to mandate the provision of new central office-based telephone company and local head-end-based cable company wholesale services severely limits other competitors’ ability to provide new differentiated service offerings. To that extent the CRTC’s approach will entrench the duopolistic nature of the communications wireline services industry in many important markets and stifle the ability of competitors to provide new and innovative services. In this environment, it will be very difficult for competitors to attract the capital necessary to innovate, grow and contribute to the greatest extent possible to the competitive landscape and increase consumer choice. Canada’s productivity and international competitiveness will remain sub-standard at a critical time in the country’s economic development and the longerterm prospect for competition in the communications sector is very uncertain” added Marc Gaudrault, TSI’s Chief technology Officer.”
“By mandating that consumers are able to obtain services from competitors at the same speeds that they can obtain services from the telephone and cable companies, the CRTC has handed a victory to Canadian businesses and consumers” said Bill Sandiford, Telnet’s President and CTO. “The Commission has ensured that end-users of these services will continue to be able use their provider of choice without being subjected to slower speeds by doing so.”
In the same ruling, the Commission denied the implementation of CO-based ADSL services, and refused to force the large telephone and cable companies to further unbundle their networks.
Sandiford added, “It is unfortunate that the Commission has failed to allow competitors the ability to innovate and compete with the telephone companies on a deeper level. We agree with the dissent of Commissioner Timothy Denton on this matter.”
Telnet Communications Pleased by Reprieve on Internet Speed Matching but very Concerned about Longer-Term Prospects for Competition following Landmark CRTC Decision
I can certainly understand the mixed reaction of the Independent ISPs.
The CRTC and the Federal Government seek to safeguard fairness for the carriers but have no qualms about imposition of a competitive disadvantage to the Independent ISPs.
The Federal Government was concerned that fairness to consumers might “diminish incentives to invest in new network infrastructure”?
These are two separate issues.
It should have been in the carrier’s interest to maintain and keep the infrastructure current. That would benefit customer and carrier alike.
Perhaps the problem arises because the carriers are too busy doing other things instead of re-investing in infrastructure.
Like for instance in 2005 Bell Canada launches downloadable music service.
Or Bell’s own unthrottled downloadable video store in 2008 — just at the time it became known they were throttling other Internet traffic as reported in:
- CBC Online: Bell opens online video store
- The Globe and Mail: Bell launches video download store ,
- The Montreal Gazette: Bell launches online video store to own or rent
- ars technica: Bell Canada opens online video store as P2P debate rages on
- dsl reports: Bell Canada Picks Horrible Time To Launch Mediocre Video Store
- Torrent Freak: Bell Opens Video Download Store, but Continues to Throttle BitTorrent, and
- Tech Dirt: Bell Canada Launches Crappy Download Video Store Just As It Gets Scrutiny Over Traffic Shaping
Canadian Internet customers have certainly been paying enough to pay to keep the Infrastructure current.
Whatever the reason, study after study (at least in those studies not paid for by Bell) have indicated emphatically that the Canadian Internet infrastructure is falling more and more behind:
Ultimately it is always the Canadian consumer that takes the hit.
The decision reaffirms a December 2008 CRTC ruling, which was remanded for reconsideration a year later by Industry Minister Tony Clement. The government acceded to lobbying from the big phone companies and ordered the CRTC to review its decision on the grounds that it had failed to consider a number of issues:
* How the matching speeds would diminish the phone companies’ incentives to invest in new infrastructure.
* Whether there is sufficient competition to protect consumers without the requirement of matching speeds.
* Whether the regulatory requirements on phone and cable companies are equal.
* How the matching-speeds requirement would affect phone companies’ abilities to offer services such as television over an internet connection.”
the crtc says:
“Access to broadband Internet services is a key foundation for the digital economy,” said Konrad von Finckenstein, Q.C., Chairman of the CRTC. “The large telephone and cable companies are bringing their fibre networks closer to Canadian homes and businesses, which allows for faster Internet connections. Requiring these companies to provide access to their networks will lead to more opportunities for competition in retail Internet services and better serve consumers.”
So finally, four years later, Canadians will get speed matching matching. But oh! For a 10% increase?
The large telephone companies have been investing in upgrades and expanding their networks. In recognition of these investments, the CRTC will allow them to charge competitors an additional 10-per-cent mark-up over their costs for the use of their wholesale Internet services’ higher-speed options.
Pardon? Isn’t that part of doing business? The large ISPs are already billing more than enough to pay for infrastructure improvements. Isn’t this why Canadian Internet rates are among the highest in the world?
As a side note, a Globe and Mail story about WindMobile’s adventures in Canada ought to be a wake up call. For all the vaunted CRTC insistance of ‘fairness’ we are seeing:
In Canada, the regulatory system and the established providers are not making Orascom’s venture an easy task: Both Rogers and Bell have lowered prices and launched new unlimited services only in the markets where Wind operates. But Mr. Sawiris, though annoyed, is not easily daunted.
How can the CRTC allow Rogers and Bell to lower prices only in specific markets?
If the price is lower in one place, it is discriminatory not to offer the same prices across Canada.
The CRTC protects consumers how…?