10/26/2012 12:31 EDT | Updated 01/21/2013 10:16 EST

Internet Rates Canada: CRTC To Require Transparency On Wholesale Costs

GATINEAU, Que. - The Canadian Radio-television and Telecommunications Commission says large telephone and cable companies will have to make more information public on the rates they charge smaller competitors for space on their networks.

The CRTC says new guidelines will increase transparency and allow Canadians to better understand how wholesale rates are established.

The big telecoms and cable companies such as Bell (TSX:BCE), Rogers (TSX:RCI.B) and Telus (TSX:T) sell smaller Internet providers space on their networks at wholesale rates.

These smaller companies then use that space to provide services to retail customers.

The CRTC says rates for wholesale services are based on the cost of providing the service plus an allowable markup that would include costs such as past network investments.

The federal regulator says once big telecom and cable companies submit their costs and proposed rates to the CRTC, that information will now be made public.

With this additional data, the CRTC says interested parties will be able to make a more informed analysis.

The CRTC says companies will continue to have the right to protect competitively sensitive information and other parties can continue to request disclosure of any such information.

However, the CRTC will rule on any disclosure requests using the new guidelines.

"Smaller companies offer competitive and innovative choices to Canadians by using access they have purchased at wholesale prices from the large companies," Blais said in a news release.

"Today's guidelines will increase transparency and allow Canadians to better understand how we establish wholesale rates."

Last November, the CRTC rejected a controversial plan that would have allowed the big phone and cable companies to impose a usage-based billing model on Internet service resellers, a system that many consumers had opposed.

Instead, the CRTC ruled that big telecom and cable companies have a choice of either charging the smaller Internet providers a flat rate per user or selling the ISPs a specific amount of capacity on their networks.

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