This week, the Canadian Radio-television and Telecommunications Commission (CRTC) doubled down on its prior decision to allow Telus to resell Bell’s fibre internet in Ontario and Quebec. The CRTC said it would issue its final decision sometime this summer on whether the Big Three - Telus, Rogers and Bell - can resell internet services on each others’ broadband networks.

The CRTC’s recent reflection on the impact of large carrier resale on small and regional players stems from a Cabinet order to reconsider that specific element of the Commission’s larger proposed framework on fibre access for resellers. The Cabinet asked the CRTC to review its policy given the impact it would have on network investment and competition from smaller, regional and independent internet providers.

Since the federal Cabinet asked the CRTC to review incumbent resale, Telus has been engaged in a concerted public and government relations campaign extolling the virtues of reselling Bell’s broadband networks in Ontario and Quebec. Their claim? That reselling on Bell’s network will increase competition for consumers.

I do not want to be overly critical of the CRTC for continuing to allow Telus to resell fibre internet on Bell’s networks – the Cabinet order certainly didn’t give regulators much to work with in arriving at a different and, in my view, correct decision. 

Still, Canadians should be highly skeptical of Telus’ arguments that allowing the western incumbent to resell its competitors’ fibre networks in eastern Canada will, in fact, benefit consumers. When it comes to high-stakes games of regulatory poker, beware of a large player claiming altruism. 

A far more compelling reason for Telus’ sudden desire to resell Bell’s fibre networks in Ontario and Quebec is that it is suddenly being threatened by increased competition in Alberta and British Columbia. 

The Rogers/Shaw merger not only injected a much better capitalized broadband competitor to western Canada and increased Rogers’ ability to offer expanded bundled offerings in Telus’ territory, but it also revitalized Freedom Mobile, now owned by Videotron. Using the CRTC's resale regime strategically, it is plausible that Telus is targeting its competitors by engaging them in their dominant territories in Ontario and Quebec to dissuade them from aggressively contesting Telus' dominance in the west.

Recent CRTC pricing survey data shows that Alberta and British Columbia have significantly higher average monthly rates for internet access compared to similar services in Quebec ($82/month) and Ontario ($106/month). In British Columbia, where Telus’ headquarters is located, the same Gigabit internet service was reported to be $113/month. That pricing differential is worth Telus protecting.

Consumers are not well served by Telus, for example, simply reselling the networks of others. For those who have been subjected to a network service outage, the resale of networks does not enhance network diversity or resilience.

For the last 25 years, Telus has been a stalwart opponent of resale. In fact, in 2020 Telus warned it would cut 5,000 jobs and $1 billion in investment and spending if it was forced to provide access to its wireless network. 

Consumers are best served by companies like Bell, Rogers, Telus, Cogeco, and Videotron building new networks and expanding into previously unserved and underserved areas, including in northern and Indigenous communities. But, the CRTC has put those investments at risk. 

If the CRTC in its final decision were to prohibit Telus and other large carriers from reselling each other’s networks, it would be a victory for consumers, facilities-based competition and the competitive alternatives offered by companies like Videotron, Cogeco, Teksavvy and other independent internet service providers. 

Based on this week’s decision, it unfortunately seems that the CRTC no longer sees facilities-based competition as the preferred form of competition. Unless the Commission decides to change course before this summer, in my view, consumers will be the poorer for it. 

Ted Woodhead is the President of Woodhead Regulatory Consulting and has over 30 years’ experience in regulatory policy and practice at the CRTC, Telus and Rogers.