Cybera’s response to telco petition to increase wholesale internet rates

Last week, Canada’s largest telecommunications providers, including Bell, Rogers and Telus, petitioned the federal government to reverse the CRTC’s August 2019 decision to lower wholesale rates. These rates are what the large telecommunication firms charge to resellers to provide internet services. 

In its August 2019 decision, the CRTC stated that;

“The Commission considers that the [new] rates will facilitate greater competition and promote innovative broadband services and more affordable prices for consumers.”

Cybera welcomed the Commission’s decision to foster competition and innovation in the telecommunications market by removing barriers to entry for smaller service providers. It is clear that much work needs to be done to improve internet access for Canadians who are being left behind in the digital economy. Currently, only 37.2% of rural communities, and 27.7% of First Nations communities have access to the universal service objective of 50 mbps download / 10 mbps upload that was recently set as a goal by the CRTC. In addition, prices for wireless and fixed broadband services in Canada are much higher than in other developed countries. 

Supporting internet resellers is a good way to bring those costs down and provide options to consumers. Internet services provided by resellers have been shown to be as much as 41%  cheaper on average than those provided by incumbent carriers for similar services.

The ability of resellers to provide affordable services to Canadians depends on the wholesale fees set by the CRTC. The CRTC’s August reduction in these wholesale fees has already had a positive effect in lowering prices for Canadians. In September, an Ontario-based independent internet service provider announced that it would reduce prices for 85% of its customers as a result of the CRTC’s wholesale rates decision. 

For all the reasons listed above, Cybera calls on the federal government to reject the recent petition by the incumbent carriers to return to higher wholesale rates. The change proposed in their petition would undoubtedly result in less affordable internet rates for Canadians, and a less competitive telecommunications sector, an outcome Canada cannot afford if we are to stay competitive at the global scale.