BCE Inc. has asked Prime Minister Stephen Harper and his cabinet to reverse a CRTC ruling that requires Bell to provide wholesale internet service providers access to the same speeds Bell offers.

Bell said Thursday the CRTC decision, made in December and reaffirmed on March 3, discourages investment in broadband and next-generation networks and will be harmful to the Canadian economy.

In particular, Bell residential services president Kevin Crull said the decision "alters the financial case for the $700 million we are investing in accelerating the deployment of our next-generation fibre over the next three years."

The Canadian Radio-television and Telecommunications Commission issued the decision in December ordering Canada's big phone companies, including Bell and Telus Corp., to offer the same internet speeds to smaller wholesale customers as they themselves sell on a retail basis.

Under existing CRTC rules, the big phone companies are required to rent out their networks to smaller service providers, who then sell internet access to their own customers. The rules boost the number of competitors selling internet access to the public, and thus keep prices down and service levels up.

The regulations, however, have only applied to older infrastructure based in phone companies' centralized office buildings. Phone companies have recently been pushing their networks out of those buildings by putting new equipment into street-side cabinets in an effort to boost their customers' internet speeds.

Selling slower speeds

But small ISPs haven't had regulated access to those cabinets, meaning they have been limited to selling slower speeds than those offered by big phone companies.

The CRTC decision came in response to a filing by Cybersurf Corp, an independent ISP based in Calgary, in June.

Cybersurf had asked the regulator to force the phone companies to automatically offer matching speeds to small ISPs. The CRTC partially granted the request, requiring phone companies to offer faster speeds to wholesale ISPs but only when they sell them on a retail basis in a given area.

Bell's request came the same day MTS Allstream Inc. announced it had petitioned the federal cabinet to overturn a separate decision by the CRTC that excluded ethernet access from the list of essential facilities phone companies had to make available to competitors.

MTS said Thursday the decision puts smaller competitors at a competitive disadvantage when offering services to business customers.

"As it did for the wireless industry, the government can deliver the benefits of competitive market forces to all Canadian businesses by ensuring the CRTC uses smart regulation to prevent the de-regulated former monopolies from being able to raise prices with impunity," said MTS Allstream chief corporate officer Chris Peirce in a statement.

Tricky navigation

Telecom consultant Mark Goldberg said the two CRTC issues are distinct but both ultimately touch on broadband policy, and the CRTC's tricky navigation of two opposing viewpoints: whether levelling the playing field leads to competitive choice or stifles innovation and the expansion of networks.

MTS argued in its appeal the CRTC has refused to mandate former monopoly telephone companies to provide competitors with fair access to the local broadband networks, leading to higher prices for consumers.

But Bell took the opposite approach in its statement, saying the regulations create a disincentive for phone companies to expand their networks, and that this ultimately will hurt the economy.

Bell senior vice-president of regulatory affairs Mirko Bibic said "urgent" action was needed.

"The cabinet needs to act urgently to prevent the further damage to the Canadian economy that would result from a slowdown in investment in a sector crucial to all Canadians," he said in a statement.