Ottawa has confirmed that it will uphold a ruling made by Canada’s telecommunications regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), which allows the nation’s largest internet companies to offer service to customers using fiber networks established by their competitors, as long as they do so outside their core regions. This decision has significant implications for the competitive landscape of high-speed internet in Canada.
Industry Minister Mélanie Joly announced this decision on Wednesday evening, stating that the CRTC’s policy would "immediately allow for more competition on existing networks for high-speed internet services across the country." Joly emphasized that the decision was based on extensive consultations with experts, the Competition Bureau, and over 300 public submissions.
In June, the CRTC issued its final ruling on this contentious issue, which has seen major telecommunications players like Telus Corporation clash with rivals Bell Canada and Rogers Communications Inc., along with several smaller providers who have expressed their opposition to the framework. Bell has argued that the policy discourages significant providers from investing in their infrastructure, while independent carriers warned that it may hinder their ability to compete against more substantial companies.
In defense of the ruling, Telus argued that the framework promotes competition in areas where it lacks its own network infrastructure, leading to more affordable options for consumers. A previous version of the framework was set to commence in May 2024 on a limited basis, requiring Bell and Telus to provide access to their fiber-to-the-home networks for a fee. Initially, this requirement was only applicable in Ontario and Quebec, but it was later expanded to include networks owned by telephone companies across the entire country.
The CRTC determined to only apply the policy to existing fiber networks, acknowledging the high costs associated with building out fiber infrastructure. Furthermore, any new fiber infrastructure developed by major telecom companies will be off-limits to competitors for five years. Following the original announcement, the federal government requested the CRTC to reconsider whether the Big Three providers should operate as wholesalers under these regulations, citing concerns over the sustainability of smaller internet providers as viable alternatives.
The CRTC conducted a consultation on this matter and issued a temporary ruling in February, which upheld the framework while continuing its review. By June, the CRTC concluded that its approach strikes an effective balance between fostering competition and encouraging investment, predicting only a "modest" near-term impact on the market share of regional carriers.
The government had a deadline until August 13 to decide whether to uphold or amend the CRTC's ruling. Joly indicated that the CRTC’s decision aims to "immediately increase competition and consumer choice," ultimately contributing to the government's broader goal of reducing costs across multiple sectors.
Bell, along with Rogers and the Canadian Telecommunications Association, called on the federal government to overturn the CRTC's decision. In response to the February ruling, Bell announced a cut of $500 million in investment plans for the year and reduced the number of locations for its fiber network build by 1.5 million. Meanwhile, Telus rolled out fiber internet service across Ontario and Quebec last November under the wholesale regime, with plans to extend services to the Atlantic provinces as well.
Telus' president and CEO, Darren Entwistle, praised the federal government's decision, referring to it as a "landmark ruling" that strengthens Canada’s commitment to competition, innovation, and essential infrastructure investments. He noted that the decision would lead to a $2 billion investment in broadband services across Ontario and Quebec over the next five years, crediting the CRTC's wholesale fiber framework for this investment.
Entwistle concluded that this decision exemplifies a regulatory system in Canada that is robust, transparent, and effective in addressing the needs of various stakeholders while enabling effective governmental policies. Bell representatives did not immediately respond to requests for comments on the issue.
