CRTC lowers some wholesale internet rates by 10 per cent as part of broader review

A laptop is shown in this file photo. (Pixabay / Pexels.com)

TORONTO — Canada's national telecommunications regulator is lowering some wholesale internet rates by 10 per cent as it launches a review aimed at bolstering competition and lowering consumer costs.

The Canadian Radio-television and Telecommunications Commission said Wednesday it recognizes its current approach does not encourage enough competition in the sector.

Its review will look into the rates that smaller competitors pay the major telecom companies for access to their networks.

The regulator will also probe whether the latter should provide smaller competitors with access to their fibre-to-the-home networks to improve internet speeds to their customers.

"We look forward to hearing from everyone who will participate in our public proceeding so that we can strike the right balance between lower prices and continued investment in high-quality and reliable networks," said CRTC chair and CEO Vicky Eatrides in a press release.

In 2021, the regulator reversed a decision from two years earlier to drop wholesale internet rates after major operators had argued the lower rate would have them selling at a loss.

Companies such as Rogers and Bell have said that expanding their network infrastructure is a significant cost that independent companies don't bear and that lowered rates could limit their ability to invest in wireless or internet services in rural areas.

Last month, Industry Minister Francois-Philippe Champagne directed the agency to implement new rules to enhance consumer rights, affordability, competition and universal access, which included a requirement for improved wholesale internet rates.

Champagne told reporters on Wednesday that the regulator's announcement was "in the spirit" of the policy handed down by Ottawa. He called that directive "one tool in the toolbox to make sure that we will have better prices for Canadians."

"We're being adamant to bring down prices in Canada and I think the new directive is paying off for Canadians," he said.

Canada's major telecommunications companies remained mum on the move. Rogers declined to comment, while BCE Inc. said it was studying the decision.

Telus Corp. did not immediately respond to a request for comment.

The Competitive Network Operators of Canada, which represents independent internet providers such as Distributel and VMedia, said in a statement that it was encouraged the CRTC "is taking rapid action to address the broken competitive landscape."

"This is a make-or-break/do-or-die year for home internet competition, and we are pleased that the CRTC and its new chair realize the importance of this issue," said CNOC executive director Geoff White in an emailed statement.

"We are also pleased that Industry Minister Champagne has been very clear in terms of his expectations that the CRTC improve competition for consumers."

TekkSavvy vice-president of regulatory and carrier affairs Andy Kaplan-Myrth also welcomed the review, saying "emergency measures are sorely needed" following the acquisition of independent internet service providers by large telecom companies "because of policies instituted by the regulator's former leadership."

"The CRTC appears to understand that previous decisions have decimated the competitive market for internet services and led to higher prices for consumers," said Kaplan-Myrth in a statement.

"While additional interim rate reductions are required to have a meaningful impact, we are pleased to see a proper focus and fast-track toward more competition and better prices."

Canadians can participate in the review until June 22 by submitting feedback through the CRTC's website, writing to the agency's secretary-general, or through fax.

This report by The Canadian Press was first published March 8, 2023.

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