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E-Business(Updated on Thursdays)


High-speed Net clash moves into high gear


Thursday, September 21, 2000

As Internet users clamour for fast Internet access at home, legal battles over who gets to supply high-speed Internet access is taking centre stage.

In the United States, approval of the America Online-Time Warner merger may hinge on the open access issue. In Canada, the Canadian Radio-television and Telecommunications Commission (CRTC) has used a series of rulings to open the door to competitive high-speed Internet access services.

As many Canadians know, there are two primary methods of getting high-speed Internet access into the home -- cable (offered by the cable companies), and digital subscriber lines or DSL (offered by the phone companies). Since both of these gateways are typically controlled by a single company (Rogers and Bell in my area), the competitive environment is pretty limited.

Concern over price and the lack of choice has led regulators to seek lower costs and improved service through increased competition. South of the border, the focus on open access to cable lines has been particularly intense. Several cities and counties have already used their regulatory control over the provision of local cable to force new competition by requiring their local providers to provide "open access" to competitors.

Not surprisingly, the providers have opposed such initiatives, with several disputes ending up in court.

The policy debate over open access is actually more advanced in Canada. The CRTC has been a strong advocate of increased competition, addressing the issue on several occasions.

Cable companies in Canada began offering high-speed Internet access in 1996. Although they promised to implement open access, they were very slow in doing so. In 1998 the CRTC stepped in, effectively ordering the cable companies to provide open access to competitors such as Internet service providers (ISPs).

When little progress was made, the Canadian Association of Internet Providers brought a complaint before the CRTC in 1999, arguing that cable firms were dragging their feet on open access.

The CRTC agreed, noting the growing importance of the high-speed Internet access market. In response, the CRTC effectively defined the market conditions for open access competition by imposing a requirement that cable companies offer high-speed Internet access for resale at a 25-per-cent discount off their lowest retail rate.

Last month the CRTC issued yet another ruling. This one is expected to finally pave the way for a more competitive environment in Canada, since it sets out the terms and rates for third-party access to high-speed Internet access offered by leading Canadian cable companies such as Cogeco, Rogers and Shaw.

These rates set the price that ISPs will pay for access that they can then resell. With prices ranging from $19 to $21.50 a month, ISPs should be able to offer customers new opportunities to receive high-speed access with the prospect of lower rates, improved service and a competitive environment.

The CRTC was careful to limit open cable access to high-speed Internet service, excluding other services such as telephony, multicasting and virtual private networks.

High-speed Internet access is a must for the full multimedia Internet experience. The CRTC's insistence on open access should put Canada in a good position to take advantage of the opportunities presented by converging media -- leaving Internet users in the United States gazing north with envy.
Michael Geist is a law professor at the University of Ottawa Law School, and director of e-commerce law at the law firm Goodman, Phillips & Vineberg. He can be reached by e-mail at and on the Web at

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