Fibre optic cable battle: Smaller players want in on Big 3 networks
The fight over Fibre to the home (FTTH) now before the CRTC
If you want a fibre optic cable – the latest, hottest connection to the internet – brace yourself for some surprises.
When Eric Rosenquist and his wife were downsizing from their sprawling, rural acreage, they had a few items on their wish list.
For Rosenquist, a software engineer with between 30 and 40 devices in his home connected to the web, a strong, fast internet connection was essential.
He found that in Richardson Ridge, a housing development still under construction in the Ottawa suburb of Kanata.
"Being a newer neighbourhood, Bell wired it with fibre right into the home," says Rosenquist, "so it's great, because you've got the most modern type of conductivity."
But there's a downside. Because Bell laid down the fibre to the home (FTTH), they're not obligated to open it to third parties.
"So if I want internet service — or any service — over that fibre line, it has to be from Bell," says Rosenquist.
For years, the big telcos and cable companies have been compelled to allow their competitors access to their copper and coaxial networks. But Bell, Rogers and Telus have been upgrading their networks to fibre optic technology, and if you want that high-speed cable coming directly into your home, you have to go with one of the Big Three.
The Big Three: It's ours
The fight over FTTH (some call it FTTP or Fibre-to-the-premises) is now before the CRTC, with many of the same arguments for access being presented by both sides.
In its presentation to the CRTC, Bell says it only builds the final leg, or fibre drop, to the home when a customer subscribes. It says that represents up to a third of the capital costs. Bell says opening up those lines to wholesale access would deter investment.
"Those who invest in facilities would be forced to incur capital expenditures purely for the benefit of their competitors," Bell says. "Expanding mandated access rules threatens to create or accentuate a digital divide, where only some Canadians benefit from a competitive choice of next generation networks. That would be an unfortunate outcome."
CRTC rules that forced the Big Three to share their wiring paved the way for independent service providers such as Start Communications, TekSavvy, VMedia and a host of others to offer internet, phone and TV service, often at lower prices than the Big Three.
But these smaller providers say without access to FTTH, they can't compete.
Most current broadband plans offer top speeds of between 50 and 60 Mbps. Fibre can reach speeds in excess of 1,000 Mbps. And unlike copper, fibre's speed isn't affected by electrical interference, distance to the node, number of connections or network traffic.
We have to be able to have access to that kind of infrastructure or else we are going to be essentially infrastructured out of the market.- George Burger, VMedia
Burger says the move to fibre is akin to the switch to broadband from dial-up.
"As we move...from low-speed internet, which we have now, to super high speed, which you see in the rest of the world that's delivered by fibre, we have to be able to have access to that kind of infrastructure or else we'll essentially be 'infrastructured' out of the market," says Burger.
Everybody wants it
The explosive growth of video is what is driving that need for speed, Burger says.
"The actual usage of capacity is increasing by 30 to 40 per cent per year because of the increased demand for video content and high-quality video."
But it's not just about the growing popularity of data-hogging 4K content from providers such as Netflix and YouTube.
Without unfettered access to fibre, some say Canada won't be able to remain economically competitive.
In its report The Future of Broadband Internet Access in Canada, Alberta's not-for-profit advanced technology agency Cybera says, "Fibre that is capable of carrying 1,000 Mbps+ speeds will be the backbone on which Canada's digital economy will grow and thrive."
"This means competitive access to next generation FTTP infrastructure and technology."
Cybera says Canada significantly trails other OECD countries when it comes to FTTP penetration, which is one reason, it says, for Canada's poor ranking in overall internet speed — we come in at 35th.
Let's make a deal
Eric Rosenquist can see both sides.
"The [big telco] companies argue before the CRTC that they need exclusive access to those fibre to the home lines in order to recoup their investment. And there is a little bit of truth to that," Rosenquist says.
"But on the other hand, they would have been doing this anyway. They have to do it to stay modern and to compete."
What about places where there is existing infrastructure in place? If Bell or Rogers has to share their FTTH lines there, what incentive is there to upgrade?
In those instances, Rosenquist says, regulators may need to get creative.
He suggests giving Bell or Rogers or the company that rips out the old wiring and replaces it with fibre "a certain timeframe of exclusivity, 18 months, two years, something... Pick a number. And after that, open it up."
The CRTC is expected to release its decision on FTTH in the next couple of months.
If you have a consumer issue, contact Aaron Saltzman.
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