Nowak: Update on indie ISPs and matching broadband speeds

By Peter Nowak

On Wednesday, the CRTC finally got around to addressing the long-smoldering “matching speeds” issue, which is essentially where smaller internet providers such as TekSavvy get to offer the same broadband services as the big guys (Bell, Rogers, etc.).

As we know from the related usage-based billing saga, small ISPs pay big ISPs to use portions of their networks in order to provide services. This regulated wholesale scheme has been in place for years as a way of ensuring there are more than just two players – the big cable company and the big phone company – for people to choose from when it comes to internet service. The little guys are supposed to provide an alternative with their own competitive services.

The same system was adopted in almost every developed country more than a decade ago as a way of transitioning from dial-up internet access to broadband. Some of the thinking was spurred by the notion that big phone companies’ copper networks were built when those firms were still government owned utilities, so the public had something of a claim to them and they should therefore be shared. However, as those companies – virtually of all which are now shareholder-owned – added expensive new fibre to their networks in recent years, that old argument came to hold less water.

The problem in many countries now is that wholesale system has created an environment where a number of established independent ISPs are dependent on continued access to the networks, both old and new. As such, the CRTC back in 2008 ruled that small ISPs should continue to get access to the new fibre being rolled out by the likes of Bell. Since the fibre allows big ISPs to sell internet speeds of 25 megabits per second and possibly more, it’s hardly fair to restrict indie ISPs to the seven megabits or so that the old network maxes out at, the CRTC ruled. After all, if one ISP is selling 25-megabit speeds and another can only offer seven, it’s pretty clear who’s going to win out in the end.

Naturally, the big guys didn’t like that ruling and fought it tooth and nail, taking it all the way to the cabinet. The regulators have stuck to their guns and two and a half years later, it looks like small ISPs may finally get those higher speeds. The CRTC’s interim decision means they’ll get access at a 35% discount to whatever the big guys are selling services at (15% for businesses) and the whole thing may kick in as soon as July 1. Read more »

--
Read more at wordsbynowak.com