This past couple of weeks has been a good one for consumers. First the Bell Astral decision, then seeking consumer feedback on wireless and now the most recent decision (Telecom Notice of Consultation CRTC 2012-168) on transparency in rate setting by the CRTC.
On the Bell Astral deal, this is the kind of thing that the average Joe looks at and says, finally!? a CRTC decision that makes sense! We stayed quiet on this front as we felt that others had already expressed the obvious so I don’t have much to say other than… it’s a great decision for consumers and from that perspective we’re pleased and maybe a two thumbs up! I’d even add that it shows a bit of backbone, the kind that resonates with most Canadians.
The CRTC has also recently launched a full scale customer feedback campaign on the wireless industry. Further showing their commitment to hearing Canadian consumers’ concerns.
So today’s CRTC decision , in continuing with that same trend, affects our business directly and we are cautiously optimistic about it. It’s a solid step in the right direction toward strengthening internet competition in Canada. To the degree that this isn’t just lip service or another way to obscure what’s really going on and that it actually makes things more transparent – then it’s a great step in the right direction. If it just leads to more of the same… I guess we’ll have to wait and see. I’m a glass is half full kind of guy and judging by the Astral decision, I’m willing to give the benefit of the doubt. Assuming this holds true and we get a better glimpse into the break down of things, it will lead to some very interesting questions. I’ve scratched my head more than once on some of these decisions over the years.
It really boils down to this. How can we compete if we don’t have cost based input prices!? When incumbents have retail rates that are lower than the CRTC approved costs and foreign investors run for the hills, you know something smells! We need real cost based prices so that competition can work. We’ve tried it the other way, and it didn’t work. This has to be the solution.
Historically, when tariffs are submitted, incumbents provided little justification around their proposed pricing to the public and in turn the CRTC doesn’t benefit from the public and industry knowledge that exists at large. TekSavvy along with CNOC have been fighting for transparency with the CRTC for some time. This decision to move towards transparency by the CRTC will help us better understand the breakdown of how wholesale price modeling by incumbents is actually done. You might remember from last November the massive discrepancy in the capacity based pricing that came back with the UBB decision. Some incumbents’ submitted capacity pricing at $280/100Mbps and others submitted at $2695/100Mbps leaving us all scratching our heads. It left us all wondering; who’s in charge of that and what are they doing? And what level of scrutiny is being used to make sure those rates are accurate? To paraphrase our friends to the south “the math doesn’t add up!” This decision will help everyone understand why each incumbent has such varying rates and if those differences should be ours to bear!
The net result is that incumbents are suddenly made to be more accountable for their wholesale rate proposals. TekSavvy looks forward to working with the CRTC on the implementation of this decision in the revision of last years wholesale rate proceedings. Ultimately this move toward greater openness and transparency when setting rates is important to ensure that Canadians have affordable access to the internet.
Marc – CEO\TekSavvy