Canada’s telecom regulator is forcing large phone companies to open their fiber networks to competitors

The Canadian Radio-television and Telecommunications Commission (CRTC) has ordered large cable and telephone companies in Ontario and Quebec to share their fiber-to-the-home (FTTH) networks with competitors to increase competition and lower prices for customers. This decision aims to improve access to high-speed internet for households and promote competition in the sector. The move was driven by concerns over declining competition in the internet services market, specifically regarding wholesale-based internet providers losing market share to more extensive telecoms.

The regulator highlighted that larger internet service providers have been acquiring smaller rivals, resulting in limited options for many Canadians seeking high-speed internet services. To address this issue, the CRTC has directed BCE and Telus, two of the biggest providers in Canada, to offer wholesale access to their fibre-optic networks starting in May 2022. However, this ruling only applies to the provinces of Ontario and Quebec, which comprise approximately 60% of the population in Canada.

The CRTC expects this decision to enable wholesale-based competitors to deliver fibre-broadband services to around five million households. In its ruling, the regulator also established a rate schedule that BCE and Telus must adhere to. The use of fibre-optic cables, which transmit data at higher speeds and provide better connectivity, is expected to benefit consumers regarding internet access.

In response to the regulatory order, BCE, headquartered in Montreal, has announced plans to reduce its capital expenditures for the 2024-25 fiscal year by CAD 1 billion. BCE had initially intended to expand fibre-optic internet to nine million locations by the end of 2025, but will reconsider this goal, now targeting 8.3 million sites.

BCE expressed concern about the order’s limited application to Ontario and Quebec, excluding western Canada, where Telus dominates. The company argued that excluding consumers in western Canada from access to fibre-optic networks would be arbitrary and capricious.

The regulatory order underscores the CRTC’s commitment to enhancing competition and expanding access to high-speed internet for households. However, it has raised concerns among industry players regarding the potential impact on their expansion plans and the variation in regional coverage.

This regulatory move aligns with the Canadian Liberal government’s broader initiatives to strengthen competition rules and ensure consumers can access affordable products and services.