Bell to abide by federal ruling on high-speed Internet infrastructure

TORONTO – Bell Canada says it will comply with a federal cabinet decision that supports a CRTC ruling forcing big Internet service providers to sell space on their high-speed infrastructure to smaller rivals at wholesale prices.

The company had asked the Liberal government to overrule a decision in July 2015 by the Canadian Radio-television and Telecommunications Commission that requires it and other telecom giants to give independent Internet providers access to their advanced networks at a reduced cost.

The rates have not yet been determined. The CRTC will set the prices based partly on cost studies provided by the major telecoms, commission spokeswoman Patricia Valladao said.

In its appeal to the federal government, Bell said the regulation would discourage investments in broadband infrastructure, thereby stalling innovation and resulting in high-speed Internet reaching fewer rural communities.

But the minister responsible for the telecom industry, Navdeep Bains, disagreed with Bell’s argument.

He said Wednesday that middle-class and low-income families need access to affordable, high-speed Internet and the CRTC decision helps fulfil that goal by enabling stronger competition.

“The decision strikes the right balance between the private sector having incentive to invest and consumers having a competitive choice,” he said in a statement.

Bell (TSX:BCE) said Wednesday that it accepts the federal decision.

“We’ll abide by the rules and move forward,” spokeswoman Jacqueline Michelis said in an email.

Access to affordable, high-speed Internet is a concern to many living in rural communities, according to a recent report commissioned by the CRTC.

The report, which polled a representative panel sample as well as the general public through a link on the CRTC’s website and through social media channels, said rural residents were twice as likely to express dissatisfaction with Internet speeds and more likely to feel the same way about price.

Bell did not answer questions about how the decision would impact any planned future investments in its fibre optic network.

Since 2010, the company has spent $2.5 billion to build its fibre-to-the-home networks, according to its petition to the government. It plans to spend another $1 billion this year, according to its most recent quarterly earnings report filed last month.

Telus (TSX:T), which announced in April that it plans to invest $4.5 billion over the next several years to expand its fibre-optic network in Canada, was one of dozens of companies, organizations or individuals to submit comments on Bell’s appeal to the Clerk of the Privy Council.

The company said the regulation, which “turns already risky investments into potentially untenable ones,” will compel Telus to reconsider the scale and timing of its planned investments. Telus did not immediately respond to questions about its plans after Wednesday’s decision.

The mayors of some cities, including Toronto’s John Tory and Ottawa’s Jim Watson, as well as several companies, including Blackberry and Aecon, also wrote in support of Bell’s appeal.

However, many smaller Internet service providers, like Cogeco Cable, VMedia and TekSavvy, and other groups wrote in countering Bell’s reasoning that the new regulation would prevent future investment.

The Public Interest Advocacy Centre and advocacy group OpenMedia both said the federal cabinet’s decision was a win for Canadians.

“For Canadians, this will mean affordable access to fibre Internet which, outside of Canada, is the Internet of today, not of tomorrow,” OpenMedia’s campaigns director, Josh Tabish, said in a statement.

“And it means that our much-needed independent providers can operate fairly on a more level playing field with Canada’s incumbent telecos.”

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