Loop d’loop

The CRTC has approved new unbundled local loop rates for colocated service providers in Ontario and Quebec [Telecom Decision 2011-24].

The rates are as low as $6.75 per month (Band A) or $13.45 (Band B), permitting alternate service providers – including internet service providers – to build out an alternative to wholesale access to bundled telco offerings. The new rates are being applied 13 months retroactively to December 14, 2009.

An article in Wire Report says that the Canadian Association of Internet Providers (CAIP) doesn’t believe that colocation is the best strategy for third-party ISPs. According to the chair of CAIP:

[Colocation] can be cost prohibitive for anyone who is trying to set up at a small central office where [they] would have limited reach and limited coverage.

It raises the question of why smaller ISPs have not aggregated their requirements under a sharing group to spread the initial costs over a wider base of subscribers and investors. Up until now, the industry associations seem to be lobbyists. Perhaps the time has come for them to provide some shared network services.

There is now certainty in the pricing of unbundled loops. With the advent of usage based pricing on aggregated wholesale services, perhaps it is time for competitors to develop differentiated services using their own facilities. It would increase consumer choice and put more competitive pressure on the larger service providers, consistent with the CRTC’s long standing policy for competition.