CRTC SHIFTS TO CHAMPIONING INTERNET COMPETITION

Last week, the CRTC announced it would immediately lower wholesale internet rates by 10% as part of a larger reexamination of Canada’s regime for wholesale regulation. This move is intended to improve competition among internet providers by making it easier for the smaller companies to lease bandwidth from the bigger ones. The CRTC also announced it would launch a public consultation on Canada’s wholesale service access framework, and consider allowing wholesale access to Fibre to the Home (FTTH) service. 

In Canada, competitive internet service providers such as TekSavvy offer internet services by leasing capacity from the networks of larger, incumbent providers. Because they are able to provide internet services without owning all parts of the network’s physical infrastructure, these tenant providers are able to offer comparable internet services at lower rates than the larger providers such as Bell, Telus and Rogers. 

These competitive prices are heavily determined by the wholesale rates (i.e. cost of leasing the network) set by the CRTC. Over the past few years, there has been considerable dispute between incumbent and competitive service providers on how these wholesale rates should be set. In 2019, the CRTC lowered wholesale rates considerably, only to raise them again in 2021. This increase caused providers such as TekSavvy to raise the prices of their internet plans (after lowering them in 2019). 

The most recent change comes as new CRTC Chairperson Vicky Eatrides, appointed earlier this year, pursues a stronger consumer rights and competition direction for the CRTC and Canada’s telecom industry as a whole. In addition, through Innovation, Science and Economic Development Canada’s new policy direction, the federal government is directing the CRTC to pursue a consumer rights focus in both wireline and wireless regulation. 

Chairperson Eatrides has taken the helm of the CRTC as Canada’s telecom industry undergoes a wave of monopolization. This includes Bell’s December 2022 acquisition of Distributel, and the ongoing Roger-Shaw merger that is projected to be finalized this year. 

The CRTC’s review of Canada’s wholesale regulatory regime, as well as public comments by Chairperson Eatrides, are an indication the Commission is concerned by these monopolistic changes, and plans to pursue policies to drive greater competition and lower consumer prices in Canada. 

For Cybera’s part, we have long argued about the importance of supporting wholesale internet services to increase competition in Canada, and make our internet costs more in-line with global averages. We therefore welcome the latest price change as a good signal for the competition support that lies ahead. We also plan to submit a response to the next CRTC review.

All Canadians are welcome to participate in the CRTC’s review of the wholesale high-speed access service framework by submitting comments. The Commission will accept responses until April 24, 2023. If you have any questions about the review, or would like to contribute to Cybera’s response, please contact us at policy@cybera.ca.

This article was originally published on Cybera’s website (cybera.ca/crtc-shifts-to-championing-internet-competition) on March 13, 2022.