{"id":19110,"date":"2025-05-28T05:07:38","date_gmt":"2025-05-28T09:07:38","guid":{"rendered":"https:\/\/mhgoldberg.com\/blog\/?p=19110"},"modified":"2025-05-26T06:27:26","modified_gmt":"2025-05-26T10:27:26","slug":"solomons-wisdom","status":"publish","type":"post","link":"https:\/\/mhgoldberg.com\/blog\/?p=19110","title":{"rendered":"CRTC needs Solomon’s wisdom"},"content":{"rendered":"

I’ve come to believe that the CRTC needs Solomon’s wisdom to solve the issue of mandated fibre wholesale: cut the baby in half.<\/p>\n

Captain Kirk followed a similar approach to solve the Kobayashi Maru<\/a> – change the rules of the game.<\/p>\n

Let’s summarize where we are. In 2023, the CRTC issued a “temporary” decision<\/a> mandating wholesale access to fibre. Bell appealed that decision to Cabinet and to the CRTC. In November of 2024, Cabinet urged the CRTC to work speedily to complete its review. As Cartt.ca reported at the time:<\/p>\n

\u201cThe Governor in Council has concerns about the viability of small and regional Internet service providers,\u201d Wednesday\u2019s order said, adding it has \u201cconcerns about future and ongoing investments in broadband infrastructure and services in Ontario and Quebec, including in rural, remote and Indigenous communities, and concerns that those investments could, if they are unprofitable, lead to a decline in quality and consumer choice in the retail Internet services market.\u201d<\/p><\/blockquote>\n

In February 2025, CRTC issued its reconsideration<\/a>, brushing aside Cabinet’s recommendation, and confirmed Bell, Rogers and TELUS could access mandated wholesale fibre in those regions where those companies don’t operate their own facilities.<\/p>\n

TELUS wants to be able to access fibre at CRTC mandated wholesale rates in regions away from its home base. With the ability to leverage mandated resale, TELUS would be able to offer a powerful full home bundle in areas that it was only offering mobile. That would greatly expand TELUS’s market opportunity. <\/p>\n

Bell, Rogers, and most of the rest of the industry (including independent ISPs) don’t want the CRTC to allow that. In Bell’s case, it is likely because TELUS has more opportunities in Eastern Canada (Bell’s home turf) than Bell would enjoy in the West (TELUS’s primary operating area). For Rogers, since it acquired Shaw there are very few areas in which it does not already have some level of incumbency, so it clearly has more to lose than opportunities to benefit from access to mandated resale.<\/p>\n

The smaller players for whom mandated wholesale was originally intended are upset that they have to compete against a more powerful brand like TELUS, in addition to Bell and Rogers. <\/p>\n

To me, the argument for restricting TELUS from access to mandated wholesale rates for fibre comes down to “we want some new sources of competition, but we don’t expect them to be as successful competing as TELUS might be.” <\/p>\n

This makes no sense, mainly because TELUS has succeeded in demonstrating the flawed logic that led the CRTC to mandate wholesale rates in the first place. Are we seeking to drive more competition, or are we satisfied with a little bit of arbitrage on the fringes? That shouldn’t be a question that tests Solomon’s wisdom.<\/p>\n

Reductio ad absurdum<\/em> is a concept in logic<\/a> that corresponds to the mathematical “proof by contradiction”. If mandated wholesale access to fibre makes sense, then there can be no reasonable justification to restrict any service provider from access to those facilities. Are we saying that a service provider can only access those facilities until they reach a certain size? Until they start to build their own facilities? Why would we permit Videotron access, but not TELUS? For that matter, Teksavvy has fibre facilities in southwestern Ontario. Should Teksavvy be restricted? <\/p>\n

The problem is most likely rooted in the regulated rates associated with the service. Rate setting is an impossible task in today’s complex environment. The regulator is almost certain to get the rates wrong – whether too high or too low. Too high, and competitors can’t be competitive; too low and the incentive to invest in new facilities is lost, and shareholders are penalized for having taken the risk to build fibre facilities in the first place. Bell’s recent press release says that the CRTC’s decision – as it stands today – “undermines the business case for further investment in new network builds, jeopardizing billions of dollars that companies are ready to invest to expand high-speed Internet for Canadians.”<\/p>\n

Perhaps the solution is to remove the mandate; let service providers negotiate access at rates that make sense for both parties. <\/p>\n

Does the CRTC require Solomon’s wisdom to answer the question of incumbent access to wholesale fibre? Perhaps it needs to be willing to revisit the question of whether wholesale fibre should be mandated in the first place. <\/p>\n

Change the rules. King Solomon and Captain Kirk would both be proud.<\/p>\n","protected":false},"excerpt":{"rendered":"

I’ve come to believe that the CRTC needs Solomon’s wisdom to solve the issue of mandated fibre wholesale: cut the baby in half. Captain Kirk followed a similar approach to solve the Kobayashi Maru – change the rules of the game. Let’s summarize where we are. In 2023, the CRTC issued a “temporary” decision mandating …<\/p>\n

CRTC needs Solomon’s wisdom<\/span> Read More »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","two_page_speed":[],"footnotes":""},"categories":[1],"tags":[],"class_list":["post-19110","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nCRTC needs Solomon's wisdom • Telecom Trends<\/title>\n<meta name=\"description\" content=\"I've come to believe that the CRTC needs Solomon's wisdom to solve the issue of mandated fibre wholesale: cut the baby in half. 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