Competition is essential in a capitalist economy, providing consumers with choices and compelling businesses to deliver quality products at competitive prices. However, a recent policy by the Canadian Radio-television and Telecommunications Commission (CRTC) is raising concerns about its impact on the high-speed internet market. Critics argue that this policy may diminish the motivation for companies to enhance and expand their telecommunications networks.

The CRTC's new regulation, upheld by Industry Minister Mélanie Joly, mandates that major network providers, such as Telus and Bell, must offer wholesale access to their fiber-optic networks at regulated rates. This policy is not entirely new; for over two decades, the CRTC has required large internet service providers (ISPs) to allow smaller competitors access to their networks to foster competition in a market historically dominated by a few large companies.

However, the current policy allows Canada’s major telecommunications firms to resell fiber-optic access to one another's networks. Critics argue that this move is not genuinely aimed at benefiting consumers but is instead driven by Telus's desire to expand into Central Canada without incurring the substantial costs of building its own fiber-optic infrastructure.

This decision has sparked backlash from both large and small network providers. Regional companies like Quebec’s Cogeco and Nova Scotia’s Eastlink are concerned that larger firms will leverage their networks to compete unfairly, potentially undermining their businesses. Bell has also expressed frustration, citing its investment of over $18 billion in fiber deployment across several provinces. The company claims it will no longer achieve the expected return on its investments due to the new regulations.

In response to the policy, Cogeco and Eastlink have announced they are halting planned upgrades in smaller communities, while Bell has reported a $1.2 billion reduction in capital expenditures since the CRTC's initial decision in late 2023. Although some industry players may be using this situation to make a political statement, reduced investment is a likely outcome when government policies lower the anticipated returns on investment.

Last year, the CRTC acknowledged that expert reports indicated the policy could negatively affect the business case for deploying fiber in underserved areas. Despite this, the regulator believes it can manage the risks by setting appropriate prices and delaying competitor access to newly deployed fiber until certain conditions are met.