Provincial cabinet ministers in 小蓝视频 and Alberta are telling Ottawa to butt out of a regulator’s decision that would foster more competition in the high-speed internet space and allow Telus (TSX:T) to compete for internet market share in Eastern Canada.
The Canadian Radio-television and Telecommunications Commission (CRTC) has made both interim and final decisions intended to foster more competition in the internet space by obliging big telecoms like Telus and Bell to essentially rent out their fibre optic infrastructure to other, smaller and regional internet service providers (ISPs).
Telus actually stands to benefit from this arrangement because, even though it would oblige the telecom to allow new entrants – resellers – to use its infrastructure to enter and compete in the 小蓝视频 and Alberta marketplace with new internet services, Telus would also be able to rent fibre in provinces like Ontario, where it currently has no fibre optic networks of its own.
Some telecoms in Ontario and Quebec aren't keen on inviting Telus into their markets, however, and have lobbied the federal government to intervene in the CRTC’s decision.
The CRTC rulings would open up competition to smaller and regional ISPs and resellers by obliging large incumbent carriers – Telus, Bell and SaskTel – to allow these companies to piggyback on their Fibre to the Premises (FTTP) infrastructure in order to offer competing internet services in regions where they don’t have any of their own fibre optic infrastructure.
A number of telecoms, including Bell, have objected to aspects of the CRTC proposals.
In a petition to the Governor in Council, Bell argues the move would "significantly discourage private investment in the build-out of competitive gigabit networks that Canadian consumers and businesses increasingly need and rely upon."
Montreal-based Bell said that the CRTC's rulings have already prompted the company to reduce capital spending in 2024-25 by $1 billion on expanding high-speed internet.
"If permitted to stand, the negative incentives created by the decision will stifle critical private sector investment in telecommunications infrastructure, including the expansion of high-speed internet and wireless networks to rural, remote, and Indigenous communities," Bell wrote.
In response to the lobbying, the federal cabinet issued an Order in Council directing the CRTC to reconsider an interim decision it had rendered in 2023.
Complicating matters is that the order was directed at a CRTC interim decision, even though the CRTC had since rendered a final decision in August 2024.
“It’s an extremely complicated set of files, and it’s made more complicated by the fact that the cabinet intervened on an interim decision and didn’t wait for the outcome of the CRTC’s final decision,” said Mark Goldberg of telecom consultants Mark H. Goldberg & Associates Inc.
In letters sent to federal Industry Minister Francois-Philippe Champagne, his provincial counterparts – 小蓝视频 Citizens Services Minister George Chow; and Nate Glubish, Alberta’s minister of Technology and Innovation – object to the federal government’s interference, and are lobbying to let the original CRTC rulings stand.
“British Columbia does not support changes to either the Interim Decision or Final Decision related to Telecom Regulatory Policy,” Chow wrote in his letter to Champagne.
Chow said in a post on X that “unwelcome intervention may be good for big eastern telecoms, but bad for competition.”
“This federal directive prioritizes protecting large, Eastern Canada-headquartered telecom giants over fostering new competition,” Glubish wrote on X. “The government is favoring Eastern-based telecom billionaires at the expense of Western Canadian companies.
“The federal government paved the way for eastern-based telecoms to expand into the west. Yet now, it’s restricting a western company from expanding into the East.”
In the early days of the internet, the big incumbent cable companies and telecoms provided internet via wireline (copper wires and coaxial cables) that they built and owned.
They were forced to open those wireline networks up to smaller players – internet resellers that didn’t actually own any cable or telecommunications infrastructure. They essentially rented the wireline networks from the large incumbents.
In recent years, as the big players built out new fibre optic infrastructure, the smaller and regional players have lobbied to get access to fibre optic infrastructure as well.
The CRTC has now directed incumbents like Bell and Telus to make their FTTP available to companies that don’t have their own fibre optics infrastructure.
Telus is not necessarily opposed to this, provided it’s a two-way street in which they are also allowed to rent the FTTP services of their peers in provinces like Ontario, where they own little to no fibre optic infrastructure.
Telus currently has some fibre optic infrastructure in Quebec, but it's market share in Eastern Canada is only about four per cent.
Based on the CRTC's recent rulings that opens up the Eastern Canadian market, Telus has already begun advertising its PureFibre Internet services in Ontario.
Any reversal of the CRTC’s original rulings would put Telus’ expansion plans in Eastern Canada in jeopardy.
“It could bring a halt to Telus’ expansion into Eastern Canada,” Goldberg said. “Then there would be a big question mark over all of the customers they’ve already signed up.”
