CRTC encourages competition and investment in the provision of Internet services

OTTAWA-GATINEAU, August 30, 2010 /Canada NewsWire/ - The Canadian Radio-television and Telecommunications Commission (CRTC) today determined, on the basis of the evidence submitted at a recent public hearing, that large telephone companies must make their existing Internet access services available to alternate Internet service providers (ISPs) at speeds that match those offered to their own retail customers. This requirement will ensure that alternate ISPs can continue to give Canadians more choice by offering competing and innovative Internet services.

"Access to broadband Internet services is a key foundation for the digital economy," said Konrad von Finckenstein, Q.C., Chairman of the CRTC. "The large telephone and cable companies are bringing their fibre networks closer to Canadian homes and businesses, which allows for faster Internet connections. Requiring these companies to provide access to their networks will lead to more opportunities for competition in retail Internet services and better serve consumers."

The large telephone companies have been investing in upgrades and expanding their networks. In recognition of these investments, the CRTC will allow them to charge competitors an additional 10-per-cent mark-up over their costs for the use of their wholesale Internet services' higher-speed options.

The Commission has also taken steps to make the obligations imposed on large telephone and cable companies more equitable. To this end, large cable companies must modify their existing Internet access services in such a way that alternate ISPs can connect to their networks at as few points as possible. This will enable competitors to make use of the cable companies' services just as easily as those of the telephone companies. Furthermore, the cable companies are already required to provide access to alternate ISPs at speeds that match those offered to their own retail customers.

In addition, the Commission denied the alternate ISPs' requests that the large telephone and cable companies reconfigure their networks. Although these reconfigurations may have permitted alternate ISPs to offer additional services to consumers, the CRTC felt that they would constitute a disincentive to network investments without necessarily enhancing innovation or competition.

Canadians connect to the Internet primarily through services provided by the large telephone and cable companies and a variety of alternate ISPs. The wholesale framework currently in place allows ISPs to pay for the right to use the large companies' networks to serve their customers. The CRTC will consider the need to phase-out mandated Internet access services when alternatives, such as wireless or satellite Internet services, become more accepted as substitutes.

The CRTC

The CRTC is an independent public authority that regulates and supervises broadcasting and telecommunications in Canada.