During last summer’s hearing, it became evident that the claims of network congestion simply did not stand up to scrutiny and so Bell’s basis for arguing for a volume approach did not make sense. This fight was about competition and the desire of large incumbents such as Bell to turn independent ISPs into resellers unable to differentiate their services. As CRTC Vice-Chair Len Katz noted during the hearing:
I guess I come from the position that we, the Commission, have already recognized there is a need to create competition, more competition in order to protect Canadians, and facilities-based competition is not yet here. So it’s our job to find a vehicle to create that competition and, in the simplest terms, it is to create an environment where broadband would be made available to a third party through a lease arrangement.
It is clear that Katz’s approach guided this decision and the CRTC has tried to craft a vehicle to create much-needed competition. That is a good first step. Yet the reality is the overwhelming majority of Canadians will still be left waiting for measures that will address data caps at the retail level. The wholesale UBB fight attracted national attention, but it always was about six percent of the marketplace. That six percent – the current marketshare of independent ISPs – is absolutely necessary to inject some competition into the Canadian broadband market, yet the large players are most responsive to what the other large players are doing.
In a nutshell, solving wholesale UBB was never enough. The retail issues that truly sparked the public outrage have been left largely unchecked. It is the broader competition issues that have left Canadian broadband slower, costlier, and more capped than many other countries that require political attention. Last February, then Industry Minister Tony Clement indicated that the government would intervene if the CRTC did not reverse its UBB decision. The CRTC complied, but this is only step one. Possible future steps include:
- open the Canadian market to greater competition by removing foreign investment barriers, particularly for wireless broadband services that play a key part of the forthcoming spectrum auction
- work with provinces and municipalities to develop community-based broadband networks that are not reliant on the dominant ISPs
- work with CANARIE, Canada’s research and education high speed network, to link local communities and provide alternatives to the dominant providers (I am a Canarie board member)
- impose open access requirements in new spectrum allocation and build open access requirements into new residential developments, municipal construction, and other initiatives
- ensure the Competition Bureau becomes active on this file to guard against anti-competitive behaviour
- pressure the CRTC to tackle the retail UBB issue. This would include stronger enforcement of the net neutrality rules and considering the prospect of Internet Billing Usage Management Guidelines.
The wholesale UBB issue is remarkable story of grassroots activism that stopped a dangerous regulatory ruling in its tracks, but there remains much work to be done.