November 26, 2013

Earlier this week the CRTC (the national telecoms regulator) released a model municipal access agreement developed in conjunction with the relevant stakeholders (namely telecoms operators and cities). The agreement is designed to facilitate negotiations between companies seeking to lay fibre and the municipalities that must accommodate these installations. To date agreements have often taken the form of bespoke contracts (which has led, in certain instances, to regret on the part one of the two signatories). A model agreement, which naturally does not remove the need for final negotiations around specific elements unique to each town, is designed to hasten the approval process and speed deployment.

This is interesting insofar as it could have one of two consequences. It may make life easier for Canadian incumbent carriers. It may also presage an arrival in Canada of what is gradually building momentum in the U.S.: the entry of non-traditional players into the market for fibre-based connectivity.

“Google Fiber” has been at the forefront of this process. It most recently bestowed the blessing of gigabit-speed access on Austin, Texas and Provo, Utah (it has cut its teeth in deployments in the mid-West). Google Fiber is not an altruistic venture: faster connectivity surely rebounds in positive ways for Google’s core search + advertising business.That said, at a recent conclave of broadband-hungry US towns (the Broadband Communities Summit held in Dallas earlier this year) Google came in for praise, and the recipients of its deployment were envied.

Google Fiber depends on favourable and stress-free municipal access agreements (hence the relevance of the CRTC announcement). “You have to take action” Google’s Vice President for Access Services told attendees at the aforementioned conference. Many municipalities are ignoring the major national players (AT&T, Verizon etc), bypassing Google and reaching out to upstart or non-traditional firms to build local, high-speed fibre rings. Some of these build-outs come in the context of favourable terms to the new players. This is generally designed as a message to existing incumbents that offer slower-speed service than is the case in major centres.

An acceleration of this trend would make for a very different national market in broadband access.