TekSavvy ‘running on hope’ as it urges CRTC to allow wholesale fibre internet access

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This article was published 16/02/2024 (945 days ago), so information in it may no longer be current.

Independent telecom TekSavvy says the federal regulator must urgently level the playing field when it comes to internet competition amid a shrinking market for small providers.

The Chatham, Ont.-based carrier appeared before the CRTC on Friday as the commission held the final day of a weeklong hearing that heard from 22 groups, including major and independent internet providers, industry stakeholders and other advocates.

The commission is considering whether to create a national wholesale framework that would allow smaller providers to sell fibre internet services to customers by paying a fee to access networks built by their rivals.

Wholesalers are set to get a taste of such rules in Canada’s two largest provinces starting this May. The CRTC announced last November it would temporarily require Bell Canada and Telus Corp. to provide competitors with access to their fibre-to-the-home networks in Ontario and Quebec within six months.

Closing out the hearing as its final presenter, TekSavvy vice-president of regulatory and carrier affairs Andy Kaplan-Myrth called it “the most critical regulatory proceeding for TekSavvy ever.”

He told commissioners that TekSavvy has lost more than 100,000 subscribers since its peak in 2019 amid an unfavourable regulatory environment for wholesalers.

“I want to assure people that we’re here, we’re still providing service. But we cannot continue to wait in the hopes that the regulatory regime will one day catch up,” Kaplan-Myrth said.

“We’ve been running on hope for a very long time. That hope ran out for some competitors. We’re still here. I don’t know how long that lasts, but no rational business runs on hope forever.”

Asked about considerations of the business being sold, Kaplan-Myrth said that “like any business would, I think we considered a range of options for our future.” But he said TekSavvy has not changed ownership and is not currently for sale.

CRTC chairwoman Vicky Eatrides said earlier this week there has been declining competition between internet providers in recent years as many independents have been bought out by large companies. The CRTC said last November that in Ontario and Quebec, independent internet providers serve 47 per cent fewer customers than they did two years prior.

Kaplan-Myrth called TekSavvy “one of only a few meaningful competitors left.”

He said the business case for wholesale internet access “has nearly been extinguished” under the current rules which do not allow wholesale access to fibre.

Larger companies such as Bell have argued against a proposed wholesale fibre framework, saying that requiring the company to open its network to competitors hurts the business case for it to invest in growth. Bell has already signalled it will reduce its network spend by $1.1 billion by 2025 in response to the CRTC’s November decision and warned itcould cut back further.

The telecom and media giant is appealing that previous ruling and accused the CRTC of “predetermined” outcomes related to its review whenthe company announced last week it would slash nine per cent of its workforce.

However, in order to compete, Kaplan-Myrth said TekSavvy must be able to offer fibre internet service, which offers faster speeds and better reliability compared with cable offerings.

“The combination of speed and enhanced reliability means there is a growing subset of customers who do not consider other types of internet to be a sufficient substitute,” he said.

He added TekSavvy is primarily a wholesale-based telecommunications competitor but also built its own fibre network in Chatham and surrounding areas — an investment that “wouldn’t have been possible for us without our wholesale-based business.”

Meanwhile, the Competitive Network Operators of Canada told the commission Friday that many of the independent internet providers it represents are gearing up to offer wholesale fibre internet in Ontario and Quebec under the new temporary rules when they take effect May 7.

CNOC president and chair Paul Andersen downplayed the significance of concerns expressed by Bell and other big carriers.

“You’ve heard the incumbents say that a wholesale access regime will impede investment incentives. This is a myth and threats of reduced investment are not credible,” he said.

“CNOC is not proposing that companies gain access for free. Companies that build networks should be entitled to a reasonable return on their investment that is sufficient to incentivize further investments.”

This report by The Canadian Press was first published Feb. 16, 2024.