Fibre Optic for web

Last week was a positive one for smaller, independent ISPs. A ruling by the CRTC has opened the door for them to provide competitive fibre-based Internet services to Canadians.

The CRTC said that the incumbent cable companies, which have so far provided fiber access to around three million Canadians, must make fiber available on a wholesale basis to independent players, of which there are around 500 in Canada. Indie providers were previously limited to slower copper-based systems, putting them at a disadvantage.

The regulator also moved to a ‘disaggregated’ model of wholesale access. Previously, when independent ISPs wanted to access the last mile, they’d have to do so through the incumbent providers’ own location, which could be many miles away. Under the disaggregated model, the indies can connect locally to access broadband networks, although they will have to invest in the equipment to do so.

What might this mean for Canadians? At the very least, it will eventually give them the option to choose more liberally between ISPs for their fiber services. Independent ISPs may choose to bundle their services with fiber in different ways to the main incumbents, for example. Increasing choice in a market will improve its health, and typically deliver a better level of service to the consumer.

This is all part of a broader plan to improve the level of access to broadband Internet services for Canadians, especially those in rural areas.

Canada still has a lot of work to do. OECD Dec 2014 figures show that the country ranked 22nd in terms of the percentage of broadband connections that are fibre-based. This placed it below the OECD average. The leaders? Portugal, and – in spite of its financial problems – Greece. Given the large percentage of Canadians living in densely populated areas, it’s difficult to understand why our incumbents haven’t done a better job of rolling it out.

There is some good news. Canadian fibre subscriptions are on an upward trajectory, having grown 50% between Dec 2013-14, but it is still ranked tenth in the OECD scale. New Zealand, the leader in terms of fibre subscription growth, grew its subscribers 250% in the same period, followed by Spain and Belgium with 150% each. Perhaps the new regulations will help Canada to improve its numbers?

Canada also ranked 11th in the number of fixed and wireless broadband subscriptions per 100 inhabitants (most of which were DSL and cable). It lags Switzerland, Denmark, the Netherlands, France, Norway, Korea, Iceland, the UK, Belgium and Germany. At least it still performance better than the OECD average here, which is something.

Opening up choice for Canadian consumers is undoubtedly a shift in the right direction. But with the incumbents consistently arguing that such competition will prevent them from investing in fibre optic networks, what will make them step up and serve Canadians more effectively, to push them further up the OECD rankings?



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