CRTC cranks open the door to multi-tenant building battle

A recent decision by the Canadian Radio-television and Telecommunications Commission (CRTC) to open up telecommunications access in multi-tenant unit (MTU) buildings should give some Canadian businesses and consumers more voice and data service options.

In the past, MTU landlords restricted access to a limited number of carriers. One potential motive was money, forcing carriers to pay either directly or indirectly for exclusive access to a building’s tenants.

But a more pressing motive was convenience. Landlords don’t like telecom companies drilling more holes in their walls, shoehorning more telecom equipment into the building basement and stuffing tenants’ mailboxes full of marketing literature, said Mark Quigley, an analyst with telecom research firm Yankee Group Canada in Ottawa.

Several carriers, including incumbent providers Bell Canada and Telus Corp., as well as some of their smaller competitors, had asked the CRTC to open up the MTU market. The carriers claimed that building landlords wielded too much power in deciding who could and couldn’t gain access to an MTU’s tenants.

The CRTC ruling says there can be no exclusive access to buildings and that any charges telecom providers are forced to pay should be based on cost recovery only.

The decision will likely benefit the incumbents more than competitive local exchange carriers, said Iain Grant, managing director of telecom research firm the Seaboard Group in Montreal.

“If anyone was going to get held hostage by a landlord-led initiative to charge carriers access fees, the people who would pay first would be the ones with the most access, and that’s Bell and Telus.”

The decision is likely to have more of an impact on the consumer market than the business market, Grant believes.

“If a business really wanted service from a particular vendor, the landlord was hard-pressed to deny that,” he explained. “AT&T, for example, is already in 2,000 basements in the Greater Toronto Area.”

Even in the consumer space, the decision likely won’t have a large, immediate impact, Quigley said.

“We’re dealing with a fairly limited population of carriers providing competitive service,” he noted. “And those carriers are limited from a capital perspective.”

Grant expressed similar reservations.

“If you look at how consumer competition is evolving, it looks like there are few companies interested in wiring new drops,” he said. “They’re more interested in having access to the drops the cable company or telephone company already have.”

The CRTC ruling would give competitive carriers access to existing copper controlled by another firm – whether it be another carrier or the building owner – at no charge.

In the long term, as carriers recover their financial footing, Quigley feels the decision should provide more choices in the consumer market.

An MTU, he noted, is a group of dwellings concentrated in one very small area.

“If you compare that to a typical suburb, the marketing costs are obviously less to go after the MTU than it would be to go after a comparable neighbourhood,” he said. “So from that perspective, it’s an attractive market segment to play in.”