Has the CRTC boxed itself in with a familiar tension: promoting competition while preserving incentives for investment?
I frequently talk about the tension that exists with wanting to promote competition today, without undermining the incentives to invest for tomorrow.
Recent disputes over network decommissioning and fibre upgrades suggest the CRTC may be running up against the limits of its own framework—at a time when investment trends are already moving in the wrong direction.
At issue are cases where smaller, facilities-based carriers and cable operators are upgrading legacy copper or coaxial networks to fibre, while wholesale-based competitors are seeking continued access during the transition. Examples in Ontario and Nova Scotia have brought this into sharper focus.
The CRTC’s wholesale fibre framework was intended to strike a balance. On the one hand, it aimed to expand competition by enabling wholesale access. On the other, it sought to preserve incentives for facilities-based investment, particularly among smaller regional carriers. That balance was always going to be difficult, but it was a central premise of the policy.
Early on, the framework was already showing signs of strain. By allowing the largest carriers to access competitors’ fibre networks, the decision blurred the line it was attempting to draw. Rather than reinforcing the competitiveness of smaller facilities-based players, the Commission created conditions where they could face competition from much larger players who enter their market using the fibre of another large competitor. For larger operators, mandating wholesale access for competitors of all sizes to rely on their fibre networks inevitably weakens the business case for expanding fibre footprints. That outcome sits uneasily with the objective of sustaining investment incentives.
More recent disputes over decommissioning bring a second layer of tension. When a carrier upgrades to fibre, retiring its legacy copper infrastructure is a logical step. Maintaining parallel networks is costly and inefficient, particularly as traffic shifts to newer technologies. Yet wholesale-based competitors, who rely on those legacy facilities, are understandably resistant to losing access.
The Commission is now being asked to intervene, and the emerging responses appear to present two options. One is to require carriers to keep legacy networks in operation longer than planned. The other is to require access to the newly upgraded fibre networks.
Both approaches create problems. Extending the life of legacy networks increases operating costs and delays the transition to more efficient infrastructure. Those costs are not theoretical; they directly affect investment decisions and, ultimately, the pace and scope of network modernization. Alternatively, mandating access to new placements of fibre runs directly counter to the five year wholesale holiday, set out in the fibre access decision as a way of protecting investment incentives.
This is where the policy tension becomes more apparent.
The earlier framework sought to limit wholesale access to encourage investment by regional providers and cablecos. Now, in the context of decommissioning, there are pressures to expand access or constrain network evolution to preserve retail competition. These are not easily reconciled objectives. Attempting to do so may contribute to a broader chill on investment.
So, has the CRTC boxed itself in?
By expanding wholesale access in ways that the Commission sought to avoid in its wholesale fibre decision it risks pulling policy in conflicting directions. As network modernization accelerates, similar disputes are likely to become more common.
The question is whether the CRTC can re-establish a clear and coherent framework that resolves the underlying tension between service-based and facilities-based competition, while reinforcing the conditions needed for sustained investment.
This is not just a theoretical concern. We are already beginning to see warning signals. After years of sustained investment to expand and upgrade networks, capital spending is declining and investments are gravitating to areas where returns on investment are more predictable. While multiple factors are at play, policy signals that weaken expected returns or introduce new risks cannot be ignored.
If the policy goal is to sustain facilities-based competition and the long-term benefits it delivers in terms of coverage, quality, resilience, and sustainable competition, then carriers need clear and credible signals that investments in network modernization will not trigger new obligations that undermine the business case. Carriers also need the ability to retire outdated infrastructure efficiently and redeploy capital to next-generation networks.
If every upgrade comes with new obligations, it should not be surprising when upgrades start to slow.
At some point soon, the Commission will need to decide whether preserving incentives for investment is just a talking point, or a fundamental policy objective. Because the two should look the same in practice.