Canada Orders Big Phone Companies to Grant Internet Rivals Access to Wholesale Fiber-Optic Network — Update

By Paul Vieira

OTTAWA--Starting next February, Canada's largest telephone companies, led by BCE and Telus, must provide smaller rivals with wholesale access to their fiber-optic networks in a bid to foster affordable access to high-quality internet services.

The order emerged Tuesday from the Canadian Radio-television and Telecommunications Commission, and in essence makes permanent a temporary order issued in November of last year. At the time, BCE responded with plans to curtail planned capital expenditures for the current fiscal year.

Furthermore, this ruling would apply across the country, thereby affecting Telus, which is based in Vancouver, British Columbia, and leans on western Canada for sales. The previous ruling applied to only the big central Canadian provinces of Ontario and Quebec.

In its ruling, the commission said this would allow competitors to the big phone companies "to bring innovative new Internet service plans to market ... Increased competition creates more choice and lower prices."

The commission added the phone companies' significant market share "gives them the ability to exercise market power in a way that could be harmful" to maintaining affordable and competitive telecommunications services, as dictated by the country's Telecommunications Act. Last year, Canada's Liberal government directed the regulator to make wholesale internet access and competition a priority item, arguing Canadian households "still pay too much and see too little competition."

Representatives for BCE and Telus did not immediately respond to a request for comment. In early Tuesday trading in Toronto, shares in BCE were down less than 1% and Telus stock was down marginally.

The regulatory decision also said cable-distribution companies, which compete with the telephone providers in offering home-internet services, would be exempt from this order.

In a nod to the big phone companies, the commission said any new fiber deployed by BCE and Telus following Tuesday's decision would not be eligible for wholesale access until August 2029. The regulator said this would give the big phone companies a chance to recoup their investments on new networks.

Through access to the wholesale market, independent providers offer internet and other services to retail customers. These independent service providers are wholesale customers of large cable and telephone companies.

In its temporary order last November, the telecom regulator said independent internet-service providers were losing market share to the incumbent phone companies, due to industry consolidation, and that left Canadians with fewer options for high-speed internet.

The transmission of data through fiber-optic cables instead of traditional copper or coaxial cables is supposed to result in higher data speeds and better connectivity.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

August 13, 2024 10:43 ET (14:43 GMT)

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