[Image courtesy of Jeff Myers/Flickr]
Independent ISPs to have flexibility to offer competitive retail services without capping bandwidth
OTTAWA-GATINEAU, November 15, 2011 - Today, the Canadian Radio-television and Telecommunications Commission (CRTC) introduced a new way for large telephone and cable companies to charge independent Internet service providers (ISPs) for the use of their networks. This wholesale billing model, which is based on capacity, will give independent ISPs added flexibility in offering competitive and innovative services to Canadians.
The CRTC does not regulate rates or set bandwidth caps for retail Internet customers. To encourage greater competition, the CRTC requires that large telephone and cable companies sell access to their networks to independent ISPs, under specific terms and conditions. Canadians can then choose between multiple ISPs.
Under the CRTC's new capacity-based approach, large telephone and cable companies will sell wholesale bandwidth to independent ISPs on a monthly basis. Independent ISPs will have to determine in advance the amount they need to serve their retail customers and then manage network capacity until they are able to purchase more. Alternatively, large companies can continue to charge independent ISPs a flat monthly fee for wholesale access, regardless of how much bandwidth their customers use. Both billing options give independent ISPs the ability to design service plans and charge their own customers as they see fit.
"Our aim is to foster a marketplace in which Canadians have as many options as possible for their Internet services," said Konrad von Finckenstein, Q.C., Chairman of the CRTC. "Independent ISPs provide an alternative to the large telephone and cable companies, but must rely on these same companies for certain elements of their network. Under the capacity-based model announced today, they will have to forecast their usage and plan accordingly."
The same requirements will now apply to all large telephone and cable companies, ensuring that independent ISPs can choose between different wholesale providers under similar terms.
The rates approved by the CRTC will allow the large companies to recover their costs and provide them with incentives to continue investing in their networks to meet future increases in Internet traffic.
In addition, the CRTC approved a flat-rate only model for wholesale business services.