Bell To Scale Back Wireless to the Home Internet Roll Out

CRTC wholesale decision impacting investment in rural broadband networks

• $100-million cost impact causes Bell to scale back Wireless Home Internet rollout in smaller towns and rural communities by approximately 20%

• CRTC order comes just a week after Competition Bureau warned of the negative impacts of unrealistic wholesale rates

MONTRÉAL, Aug. 19, 2019 /CNW Telbec/ - Following the CRTC's August 15 decision to significantly lower the wholesale rates that third-party Internet resellers pay to access network infrastructure built by providers like Bell, the company today announced the estimated $100-million impact of the CRTC's order will reduce the scope of Bell's broadband Internet buildout for smaller towns and rural communities by 20%, or approximately 200,000 households.

"The CRTC's decision transfers capital from providers like Bell who are building Canada's modern broadband networks to wholesale resellers that invest little to nothing – and there's no assurance or requirement from the CRTC that any of it will be dedicated to network buildouts or otherwise passed on to Canadian consumers," said Mirko Bibic, Bell's Chief Operating Officer. "Putting this kind of unexpected and retroactive tax on capital investment is not the way to ensure the continued development of Canada's Internet infrastructure."

In 2018, Bell announced the rollout of its new Wireless Home Internet (WHI) service to bring high-speed Internet access to houses, farms and small businesses in areas that are difficult for providers to reach with fibre or traditional cable Internet access. Bell's original WHI rollout plan to serve 800,000 small-town households in Manitoba, Ontario, Québec and Atlantic Canada was expanded to more than 1.2 million locations following the federal government's introduction of the Accelerated Investment Incentive in November 2018. Bell has already rolled out WHI service to more than 130 small communities in Ontario and Québec.

However, the estimated cost impact to Bell of the CRTC's decision exceeds $100 million, most of it in the form of retroactive payments to resellers, requiring the company to reduce the scope of its WHI buildout plan by 200,000 households, to approximately 1 million locations.

On August 7, the federal Competition Bureau issued a report on the state of Internet competition that concluded Canadians are "well-served by world class broadband networks" and "generally satisfied with their Internet service provider." Emphasizing that the CRTC should set wholesale access rates at realistic levels, the Bureau warned of "the potential negative effects that a wholesale access regime can have on the incentive for facilities-based competitors to make the necessary investments to ensure that Canadians are served by world class networks."

"Bell has made great strides in connecting smaller communities with our innovative WHI technology, and we expanded the program due to the federal Accelerated Investment Incentive that has advanced capital investment across a range of Canadian industries," said Mr. Bibic. "It is unfortunate that the CRTC's decision will hinder the positive momentum we've built in bringing full broadband Internet access to rural and other underserved communities."