Shaw, Videotron join industry concern over CRTC's new wholesale broadband rates

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TORONTO -- Shaw Communications Inc. and Videotron have joined major Canadian telecom companies that have expressed concern over the CRTC's decision to lower the prices that smaller internet providers have to pay them to use their networks.

Calgary-based Shaw warned Wednesday of long-term negative consequences from the decision to dramatically reduce the federally regulated wholesale broadband prices.

"In time, this decision will be seen as short-sighted, and have negative far-reaching consequences for consumers and for the future investment required to build network capacity in all parts of Canada," said company CEO Brad Shaw in a statement.

Quebecor subsidiary Videotron also weighed in, expressing concern about the potential economic impacts from any delays in infrastructure investments.

Last week, the CRTC issued final rates that smaller providers like TekSavvy and Distributel have to pay the large telcos to use their broadband network after issuing interim rates in 2016.

The regulator said it set the rates lower to increase choice at lower prices and ensure a competitive marketplace across Canada.

Bell Canada said on Monday it would cut back on a rural broadband expansion because of the decision, while Rogers Communications and Cogeco Communications expressed disappointment and said they were reviewing their options.

Navdeep Bains, federal minister of innovation, science, and economic development, said in a statement earlier this week that he was "deeply disappointed" in Bell's decision to cut 200,000 homes from a wireless broadband rollout, but that he expects broadband infrastructure will continue to expand.

"This will not distract from our government's commitment to connect every Canadian to affordable high-speed internet by 2030, and I am confident new competitors will step up to make these investments."

Byron Holland, president of the Canadian Internet Registration Authority, said in a statement he was disappointed companies like Bell were shying away from competition.

"Companies like Bell have benefited from decades' worth of public subsidies and protections from competition, and now they're threatening to abandon rural Canadians because the CRTC is forcing them to compete."

The final rates set by the CRTC are 15 to 43 per cent lower than the interim rates for monthly capacity, and three to 77 per cent lower for access rates, while the interim rates were themselves up to 89 per cent lower than what the companies had hoped to charge.

Rogers said the retroactive rate change will cost it $140 million. Bell put its cost at $100 million, Videotron at $50 million, Cogego at $25 million, and Shaw at $10 million. Telus Communications did not reply to requests for comment.

The CRTC declared broadband internet a basic service in Canada in 2016, recognizing it as a fundamental part of Canada's future economic prosperity and global competitiveness.