The CRTC is wiping the slate clean on the wholesale price increases imposed in 2022 and acknowledging its mistakes. Is this decision too late?
This is a real thunderclap that could shake up Canadian Internet service providers. While the CRTC had proceeded to an increase in wholesale rates in 2022, i.e. the price charged by the providers who own the lines to the independent providers who operate their networks, it has just decreed a 10% decrease on some wholesale rates and launched in the wake a consultation on competition in telecoms in Canada.
At the same time, “the CRTC recognizes that its current approach does not meet its objective of encouraging greater competition in the Internet services market”.
This first decrease is a first step. The CRTC has announced that it will continue in this direction and re-evaluate wholesale rates in a more general way during its review.
This increase has been denounced many times by independent providers and has led to an unprecedented wave of buyouts of independent providers. It must be said that the increase in wholesale rates has led to a significant decline in the revenues of independent suppliers. For example, oxio declares on its website that it only earns $3 on a 200 Mbit subscription sold for $80.
In this context, independent providers had no choice but to be bought by the incumbent providers Bell, Rogers, Telus and Videotron in order to avoid paying these wholesale prices and take advantage of their networks.
According to Vicky Eatrides, President and CEO of the CRTC, “The CRTC is taking immediate action to increase competition in the Internet services market. This starts today with a 10% reduction in certain wholesale rates. We look forward to hearing from all those who will participate in our public proceeding to strike the right balance between lowering prices and continuing to invest in reliable, high quality networks.”
What does it changes to rates?
This reduction will surely be welcomed by independent providers, but the damage has already been done since we have seen an unprecedented wave of buyouts since last year. Between Ebox bought by Bell, Vmedia passed under the flag of Videotron, oxio became a property of Cogeco or Rogers who is still trying to buy Shaw, the independent providers have almost all been bought.
As for the rates, we are currently contacting the different independent providers to find out if this decrease will be reflected in the subscriptions. However, according to this excerpt from a CRTC document:
“With respect to the rate reduction finding set forth above, the Commission directs incumbent carriers to file, by March 17, 2023, revised rates reflecting the required 10% decrease to the traffic volume sensitive component costs used to establish the current rates, and all else being equal, for bundled wholesale VSA* services.”
A survey that asks for your participation
In order to get the public’s opinion, the CRTC has put an online form so anyone can give its opinion or to provide documents that could help it in its investigation. All comments received by the CRTC will be placed in the public file and should contribute, according to the CRTC, to help it make its decision.
Here are the important dates to remember according to the 2023-56 CRTC document:
Expedited process on the issue of temporary FTTP access using bundled VTA services
- The first step in the process will be the filing of initial interventions that address the issue of temporary FTTP access using bundled wholesale VTA services.
- Parties and interested parties may file their interventions regarding the above issue by April 24, 2023.
- Parties may request public disclosure of information that has been designated as confidential in the parties’ interventions, specifying in each case the reasons for disclosure. Such requests must be filed with the Board and served on the parties to whom they are directed by May 4, 2023.
- 94. Responses to requests for disclosure shall be filed with the Board and served on the parties requesting disclosure by May 15, 2023.
- Findings on public disclosure requests shall be made as soon as practicable.
- All parties may file replies to interventions with the Commission, by June 6, 2023, regarding whether the Commission should mandate temporary FTTP access using bundled wholesale HSA services.
