CRTC gives business more choice in buying broadband

A U.S. provider of broadband services to enterprises is ready to move north after Canada’s telecommunications regulator gave it permission to operate here.

The ruling by the Canadian Radio-television and Telecommunications Commission (CRTC) means AboveNet Communications Inc. of White Plains, N.Y. can lease unused — or “dark” — fibre from a Canadian carrier and “light” it to sell services.

As a result businesses here may soon have a wider range of Canadian and foreign-owned telecommunications providers from which to buy high speed services.
“We think it’s a great decision,” Rajiv Datta, (pictured), senior vice-president and chief technology officer of AboveNet, said Friday of the CRTC ruling.

“It’s the right decision for [business] customers in Canada,” said Datta.

AboveNet, which offers optical, Ethernet and IP-based connectivity at speeds of 100 Mpbs and over to enterprises and carriers, plans to start operations in Toronto sometime next year through a Canadian subsidiary, he said.

The company already services some Canadian businesses with U.S. offices, and U.S. companies with Canadian offices, Datta said, which is why it looked north.

Datta couldn’t say when service will begin, what services will be offered or how they will be priced.

The decision was praised by Iain Grant, managing director of SeaBoard Group, a Montreal-based telecommunications consultancy. “For business buyers it means there will be more choice,” he said.

“This removes a significant impediment [to providers leasing dark fibre] and it looks like there will be more flexibility in the marketplace,” said Grant.

Teksavvy Solutions Inc., a Chatham, Ont.-based service provider that operates in several provinces and which supported AboveNet, also applauded the decision.

“What the decision does is preserve competitive choices for transport,” Kate do Forno, the company’s manager of corporate communications, said in a statement. “So, for TekSavvy it’s not so much about new services, but about ensuring that prices for transport don’t increase due to reduced choice. If cost increases for transport were to occur, this could potentially result in higher rates to consumers. So to that end, TekSavvy is happy with the decision.” 

The commission’s ruling deals with a technicality – defining whether a provider that lights leased dark fibre optic cable is an unregulated reseller of telecom services or a regulated telecom common carrier.

By ruling such a company is a reseller, the CRTC may open room for Internet and other providers of connectivity to get into a new line of business, as well as more opportunities to sell dark fibre for phone and cable companies.

But it also may be a way foreign telecom providers can bypass Canadian telecom ownership rules and sell more services here by leasing fibre.

“It’s really clarified that you don’t have to be Canadian to light up [leased] dark fibre here,” said Mark Goldberg, a Thornhill, Ont.-based telecommunications consultant. “Presumably that creates opportunities for other service providers from around the world who want to get into business here,” said Goldberg.

The matter began in 2009 when AboveNet asked the CRTC to designate AboveNet Canada as a reseller allowed to light fibre it would lease from Vancouver-based Telus Corp. The commission thought the issue interesting enough to call for comments from the industry. 
Telus and BCE Inc.’s Bell Canada objected, arguing that attaching the optical equipment to light dark fibre makes any provider into a carrier under the Telecommunications Act. The act defines a telecom common carrier as a company that operates a transmission facility.

AboveNet argued its Canadian unit wouldn’t control or own the fibre optic, therefore can’t be a telecom carrier.
The commission agreed.

Had the commission ruled against AboveNet, the Canadian unit not only would have been regulated, it would have run up against this country’s telecommunications foreign ownership restrictions.

The ruling may encourage more U.S.-based carriers to offer business services here. Among those supporting AboveNet’s application to the commission were four U.S. business telecom providers with Canadian divisions: Verizon Business; Level 3 Communications LLC of Broomfield, Colo.; Cogent Communications Inc. of Washington D.C. and NextG Networks Inc. of San Jose, Calif. 

Spokesmen for Verizon and Level 3 couldn’t be reached for comment.

Canadian dark fibre owners could also benefit by having more buyers. One is Atria Networks of Markham, Ont. recently bought by Rogers Communications Inc. A Rogers spokesman said no one from the company could comment Friday on the decision.

Telus and Bell could appeal the CRTC decision either to the commission, to the Federal Court or to the federal cabinet.

No one from Telus or Bell replied to a request for comment by press time.

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