Canadian Radio-Television and Telecommunications Commission Determines Final Wholesale Rates For Broadband Services

On May 27, 2021, the Canadian Radio-television and Telecommunications Commission (CRTC) announced that it had finalized the rates that large companies can charge competitors to access their high-speed broadband networks under the industry’s existing wholesale aggregated model. This decision resolves a long-standing dispute under the industry’s current wholesale framework and allows the CRTC to now shift its focus towards the industry’s new disaggregated wholesale model that is set to be implemented in the future.

Independent service providers (i.e. the competitors) that do not have their own high-speed access (HSA) networks can pay larger companies at wholesale rates to access their networks when providing internet, telephone, and television services to customers. Under the current aggregated wholesale HSA service, a competitor connects its network to a small number of points in the larger company’s network. Although this aggregated model is primarily used by competitors today, there are no finalized rates for larger companies to charge competitors for this service, with the industry operating under interim rates for the last four years.

The CRTC’s primary goal for wholesale HSA services is to transition from the current aggregated model to a new disaggregated model, which is promised to increase industry competition by enabling competitors to access more points in the larger companies’ networks, provide faster internet speeds and more services to customers. The CRTC’s decision sets out the wholesale rates under the existing aggregated model so that the CRTC can shift focus to assessing issues under the disaggregated model.

In its decision, the CRTC sought to strike a balance between regulatory certainty, market stability, regulatory burden, and the goal to transition to the disaggregated model. It decided that the interim rates for the aggregated wholesale HSA service that were in effect prior to the issuance of Telecom Order 2019-288 (reported by the E-TIPS® Newsletter here) should be deemed the final rates, with certain modifications. Absent any expressed exception, the final rates would be retroactively applied as of March 31, 2016.

Summary By: Imtiaz Karamat