CRTC’s Aggressive Wholesale Access Regime Fails to Stimulate Fiber Investment, Telecom Data Shows
Source: Mark H. Goldberg’s analysis of Canadian Radio-television and Telecommunications Commission (CRTC) data and statements, published May 12, 2026. The central thesis, supported by CRTC Vice-Chair Adam Scott’s own remarks, is that the regulator’s foundational hypothesis—that mandating aggressive wholesale access to incumbent fiber networks will spur competitive investment and lower consumer prices—is demonstrably failing, as evidenced by a sharp decline in competitive carrier capital expenditure (CapEx).
The CRTC’s multi-year regulatory framework, designed to reshape Canada’s telecom landscape, is facing a critical moment of truth. Data emerging from the regulator’s own reporting mechanisms reveals a stark contradiction: while the policy aimed to boost competition and investment by forcing major carriers like Bell, Telus, Rogers, and SaskTel to provide wholesale access to their fiber-to-the-premises (FTTP) networks, the result has been a significant downturn in capital investment by the very competitors it sought to empower. This development forces a crucial strategic reassessment for network operators, infrastructure investors, and policymakers, not just in Canada but in any market considering similar open-access mandates for next-generation infrastructure.
The Data: A Sharp Contraction in Competitive Carrier Capital Expenditure
The core evidence undermining the CRTC’s regulatory hypothesis lies in the investment patterns of competitive carriers, also known as facilities-based or wholesale-based internet service providers (ISPs). According to CRTC data and analysis, these operators have substantially pulled back on network investment since the implementation of the current wholesale regime.
The regulatory model was predicated on a simple economic theory: by granting competitors mandated access to incumbent fiber at regulated rates, those competitors could offer retail services without the massive upfront cost of building their own last-mile infrastructure. The anticipated surplus revenue would then be reinvested into building out their own competitive networks, particularly in underserved areas or for service differentiation, creating a “virtuous cycle” of investment and competition. However, the reported figures tell a different story. Competitive carrier capital expenditure has seen a pronounced and sustained decline. Instead of leveraging wholesale access as a stepping stone to their own infrastructure builds, many appear to have become permanently reliant on the incumbent networks, turning what was meant to be a temporary bridge into a permanent business model with minimal capital outlay.
This trend is particularly alarming for the long-term health of the infrastructure market. It suggests that the regulatory price point for wholesale access may be set too low, disincentivizing new builds by making resale more profitable than construction. For network engineers and CFOs, this creates a perverse calculation: why commit hundreds of millions to trenching fiber and installing optical line terminals (OLTs) when you can purchase capacity at a regulated rate that undercuts your own cost to build? The policy, in effect, may be cannibalizing the business case for competitive overbuild.
Industry Impact: Incumbent Retrenchment and Stalled Market Evolution
The fallout from this failed hypothesis is rippling across the entire Canadian telecom ecosystem, impacting business strategies, network rollout plans, and market valuations.
Incumbent Operator (ILEC) Strategy: For Bell, Telus, and Rogers, the data validates their long-standing argument that aggressive wholesale mandates act as a disincentive for their own fiber investments. If they are forced to share the fruits of their multi-billion-dollar FTTP investments at regulated rates that competitors are using instead of building, the return on investment (ROI) calculus for future builds becomes less attractive. This could lead to a slowdown in the pace of fiber deployment to secondary markets and rural areas, as incumbents prioritize capital in areas with higher returns and less regulatory burden, such as 5G densification or enterprise services. We are likely to see a strategic shift towards infrastructure that falls outside the strictest wholesale rules, such as dedicated enterprise fiber rings or advanced 5G standalone core networks.
Competitive Carrier (CLEC/ISP) Conundrum: The competitive carriers are caught in a trap of their own making, albeit one crafted by regulation. While the low-cost wholesale model provides short-term revenue and customer growth, it erodes their long-term valuation as infrastructure assets. An ISP that owns its fiber network commands a far higher multiple than one that merely resells another’s. The decline in CapEx signals to investors a lack of growth ambition and an increased dependency on regulatory fiat. This makes them vulnerable to any future shift in CRTC policy or to commercial tactics from incumbents. Their path forward is fraught: reinvesting in their own fiber is now financially less appealing due to the wholesale alternative, yet not doing so caps their strategic potential.
Infrastructure Investors and Private Equity: The uncertainty created by this regulatory mismatch is chilling for external investment. Pension funds and private equity firms looking at digital infrastructure require predictable, long-term regulatory frameworks. The evident failure of the current approach introduces significant policy risk. Investors may begin to discount the value of Canadian telecom assets or seek jurisdictions with more stable rules. This could reduce the overall capital available for network upgrades in Canada, impacting the nation’s digital competitiveness.
Global and Strategic Implications: A Cautionary Tale for Fiber Regulation
The Canadian experience serves as a critical case study for regulators worldwide, particularly in markets undergoing rapid fiberization or considering open-access models for next-generation networks.
MENA and African Market Parallels: Many markets in the Middle East, North Africa, and Sub-Saharan Africa are at a crossroads regarding fiber regulation. Governments and regulators are eager to accelerate FTTP and FTTx rollouts to boost GDP and digital inclusion. The Canadian example warns against assuming that forced open access automatically yields more investment. In developing markets, where capital is even scarcer and the business case for fiber is already marginal, setting wholesale rates too low could completely stall private investment, leaving the state to shoulder the entire burden. The model that may be more effective is a geographically targeted one, with strict wholesale obligations only in monopoly areas, while allowing for facilities-based competition in lucrative urban centers to attract investment.
The “Ladder of Investment” Theory Revisited: The CRTC’s approach was rooted in the European-derived “ladder of investment” theory, where entrants start with resale, then climb to unbundled local loops, and finally build their own infrastructure. Canada’s data suggests the ladder has broken. In today’s market, with high fiber construction costs and the availability of deep wholesale access, competitors have little incentive to climb the final rung. Regulators globally must re-evaluate this theory in the context of FTTP economics. Alternative models, such as incentivizing co-investment (where multiple operators jointly fund and own a new fiber network) or using public subsidies to fund open-access, carrier-neutral “dark fiber” networks, may prove more effective in stimulating genuine infrastructure competition.
Spectrum Policy Lessons: This fiber debate has direct parallels to spectrum policy. Just as low-cost wholesale fiber can disincentivize building, overly restrictive or cheap spectrum licensing for mobile virtual network operators (MVNOs) can discourage facilities-based mobile network investment. Regulators must balance the short-term goal of retail price competition with the long-term necessity of continuous, massive capital investment in physical infrastructure.
Forward-Looking Analysis: The Path to a Sustainable Investment Framework
The CRTC, faced with this evidence, has three broad paths forward, each with profound implications for the telecom sector.
1. Regulatory Doubling Down: The Commission could conclude the problem is not the theory but the execution, perhaps mandating even lower wholesale rates or expanding the scope of assets subject to access. This would likely trigger further investment withdrawal from incumbents, litigate the sector for years, and deepen the dependency of competitors. It is a high-risk path that could structurally damage Canada’s telecom infrastructure leadership.
2. Strategic Retreat and Recalibration: A more likely and pragmatic approach involves a phased recalibration. The CRTC could introduce geographic differentiation, easing wholesale mandates in areas where facilities-based competition is feasible while maintaining them in monopoly markets. It could also adjust wholesale rates to ensure they cover the long-run incremental cost plus a reasonable return, making network construction a comparatively more attractive option for competitors. This would require a nuanced, data-driven approach but could rebalance incentives.
3. Embrace Alternative Models: The most forward-looking path would be to pivot towards new models entirely. This could involve actively promoting and regulating co-investment schemes for fiber expansion, creating a framework for independent carrier-neutral network operators (like those seen in parts of Europe and Africa), or using federal broadband funding to build publicly owned open-access backbone and middle-mile infrastructure, reducing the cost for multiple ISPs to compete for the last mile.
For telecom executives and network strategists, the immediate takeaway is to prepare for heightened regulatory uncertainty. Investment committees should stress-test business plans against multiple regulatory scenarios. The era of assuming that wholesale-based competition will automatically drive infrastructure investment is over. The new imperative is to articulate—and demonstrate—a clear link between regulatory stability, risk-adjusted returns, and the capital expenditure required to build the future-proof networks that national economies demand. The Canadian data is a stark reminder that in telecom, getting the regulation wrong doesn’t just affect prices—it can strand capital and stall technological progress for a generation.
