Internet competition is nearly dead in Canada and prices for consumers are sky-high, a big part of the ongoing cost-of-living crisis. Dramatic, concrete action is needed to revive competition and ease some of the pressure families are feeling with their telecom bills.
That’s TekSavvy’s message to the Canadian Radio-television and Telecommunications Commission as the regulator reviews wholesale internet services – an important function of the market that determines what consumers pay for home broadband. Last month marked a major milestone in this review, with involved parties filing their respective arguments.
In our submission, we point out that nearly every major independent internet service provider has been acquired by Bell, Telus, Videotron and other large companies over the past few years because of the CRTC’s disastrous wholesale decision in 2021. That ruling, which maintained the inflated wholesale rates that smaller competitors pay to the big companies to use parts of their networks, has made – and continues to make – competition impossible. We’re urging the CRTC to fix this mess of its own creation.
In our filing (which you can read here), we stress six concrete steps for how the CRTC must do that. The end goal, as it always must be, is to give consumers more choices, lower prices and better services.
To achieve this, the CRTC must:
- Stop rampant predatory pricing, where Bell, Rogers and others are selling internet services below the wholesale rates they charge competitors such as TekSavvy, often through flanker brands like Virgin and Fido. If a big company offers a service below its wholesale cost, it should trigger a retail-minus situation – where the new wholesale rate for smaller providers is automatically 25 per cent less than the bigger company’s retail price.
- Examine functional or structural separation, where large providers are split into two distinct companies. Under such an arrangement, one company owns and operates a network and sells wholesale access to it to all comers on an equitable basis. The other purchases that access on the same terms and rates as every other competitor, and then offers it to customers as retail internet service. Canada's big telcos currently do not want wholesale-based ISPs to exist so they are intent on killing them off – splitting them in two would change that.
- Require all companies to file full details of private network access deals – known as off-tariff agreements (OTAs) – so that they can be scrutinized for anti-competitive effects by the CRTC and the public.
- Mandate access for all competitors including TekSavvy to all broadband networks owned by major companies such as Bell and Rogers, including the fibre that provides the super-fast speeds consumers are increasingly wanting. This access must be at just and reasonable wholesale rates, unlike those that currently exist and that have driven most competitors out of the market.
- Apply that mandated access to what’s known as the “aggregated” wholesale system, where smaller internet providers connect to large networks at a few locations. The CRTC must also mandate “disaggregated” wholesale access to allow smaller companies to connect at many points, which will enable them to gradually build their own networks and become less dependent on major providers over time.
- Track wholesale-based ISP market shares on a more regular basis and take proactive measures to improve the rules enabling them, when and if necessary.
Competition in the Canadian internet market will soon cease to exist entirely if policy makers don’t correct past mistakes, which will leave consumers open to the whims of the nation’s telecom oligopoly.
The CRTC is to be commended for addressing this matter urgently and deserves kudos for rejecting obvious attempts by Bell and others to delay and derail the review.
But for the sake of preserving competition – and the millions of households across the country that are struggling to make ends meet – the regulator must now avoid half measures and instead take strong, decisive actions.