The Canadian Radio-television and Telecommunications Commission (CRTC) on Thursday released the wholesale rates for broadband access services that competitive ISPs like TekSavvy will purchase from the country's incumbents like Bell Canada (NYSE: BCE) to deliver services to their customer bases.
In announcing the new rates, the CRTC noted that the wholesale rates are based on the large telephone and cable network operators' costs plus a reasonable markup.
"Large and small independent service providers now have the certainty they need to continue offering Canadians a choice of innovative and competitive services,' said Jean-Pierre Blais, chairman of the CRTC, in a release announcing the new rates. The rates enable large companies to recover their costs and make further investments in their networks, added the release.
A key piece of the new rules is simplicity.
Any of the incumbent telcos and cable MSOs that provide wholesale broadband access services to competitive ISPs now must use a single billing model and offer the same rates for business and residential customers. The CRTC said this common pricing model will create a more "straightforward billing process for independent service providers."
Before these new rules went into place, a number of large telcos and cable operators charged different rates for wholesale and residential business services.
Competition in Canada's broadband market has continued to grow in recent years. According to the CRTC, competitive service providers had over 700,000 broadband subscribers, or almost 7 percent of the total Canadian broadband market, as of the end of 2011.
Given the growing presence of competitive providers, the CRTC began a review into how incumbent providers should charge independent service providers for the use of their networks. Out of that discussion, the CRTC created two wholesale billing models--a capacity and flat-rate model--that they say enable competitive telcos the "flexibility to develop innovative packages and pricing plans." Additionally, these models enable incumbents to recover costs and make investments in their own broadband networks.
- see the CRTC's release
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