CRTC revises wholesale pricing signalling “dark period” for market competition

CRTC revises wholesale pricing signalling “dark period” for market competition

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The Canadian Radio-television and Telecommunications Commission (CRTC), Canada’s regulator ruled against lowering wholesale access prices for smaller businesses.

The news follows the CRTC’s ruling in April in which it said that Bell Mobility, Rogers and Telus (known as the Big Three) must allow MVNOs wholesale access to their networks.

At the time it was confirmed that wholesale rates will be negotiated between providers, while the terms and conditions will be established by the CRTC.

In effect, this latest ruling will allow the Big Three to charge rates similar to the prices originally set in 2016 for wholesale access to their broadband networks and effectively overturns a 2019 ruling - which was still under appeal - that would have forced large telecom operators to lower their wholesale rates and make retroactive payments to small companies.

For years Canadian consumers have complained about the high mobile bills, which are among some of the highest in the world. In response, Prime Minister Justin Trudeau’s government has pledged to act if the major national providers don’t lower these costs by 25%.

Since this news was announced, the CRTC has faced a lot of backlash, with some even calling for Ian Scott, chair of CRTC to be fired. Specifically, TekSavvy, an internet service provider, confirmed that it is petitioning the decision with the federal government directly to overrule the ruling.

“I never heard this scenario discussed seriously, and never really considered that they would do this,” said Andy Kaplan-Myrth, TekSavvy’s VP of regulatory and carrier affairs, to Reuters.  

He described the ruling as a “tombstone on the grave of telecom competition in Canada.”

Further in a statement, Kaplan-Myrth commented: “The CRTC’s disregard for both its own mandate from Cabinet, as well as Cabinet’s mandate from the Prime Minister, makes it clear that the CRTC actively undermined this government’s agenda and promises to Canadians” said Kaplan-Myrth.

“The CRTC has ignored Cabinet’s directions to it and has placed the interests of large incumbent telecommunications providers above the interests of Canadians”.

Michael Geist, an internet law expert at the University of Ottawa, described the decision as a “a dark period” for smaller telcos, while elsewhere, Laura Tribe, executive director of OpenMedia, said “The CRTC itself actively acknowledges just how concentrated the market is, and yet their decisions continue to not just uphold the status quo, but tip the scales even sweeter in big telecom’s favour.”

At present, the Big Three 89.2% of subscribers and 90.7% of revenue in Canada’s telecom industry. 

OpenMedia, a Canadian telecoms advocacy group, has recently expressed its opposition to the proposed merger between Shaw Communications and Rogers Communications $26 billion merger.

On behalf of its 6 civil society organisations OpenMedia issued a joint statement calling on the federal government to block Rogers from buying out Shaw. They also launched a petition that has already accrued more than 23,330 signatures (as of 01.06.21).

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