Independent Internet Providers Prepare to Raise Prices Following CRTC Decision –

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Independent Internet Providers Prepare to Raise Prices Following CRTC Decision – fr


TORONTO – Several independent internet providers said on Friday they would raise prices or cut some services after an unexpected regulator setback this week, with at least one company calling for the CRTC director’s resignation.

The telecommunications regulator on Thursday overturned a 2019 decision that lowered the rates that small providers like TekSavvy pay to graft onto the networks of the largest cable and phone companies. From now on, the higher rates set in 2016 will apply.

VMedia Inc., another independent ISP, has expressed “disbelief” at the about-face of the previous ruling, which came after years of review initiated by former CRTC chairman Jean-Pierre Blais.

The CEO of the company said current CRTC chairman Ian Scott, who was appointed in 2017, is expected to step down because the regulator’s authority is undermined by the CRTC’s abrupt turnaround on Thursday.

“The decision raises serious doubts about the leadership and competence of the CRTC, as well as the integrity of its process, and sells off Canadians in favor of dominant players,” Alexei Tchernobrivets said in a statement.

“CRTC Chairman Ian Scott should resign and Parliament should launch an immediate investigation to determine whether political and corporate influence had an impact on this decision. “

The company said it plans to use legal means to reinstate the 2019 ruling.

Scott’s five-year term runs until September 4, 2022. The CRTC has not commented on VMedia’s response to the ruling.

In an interview Thursday after the ruling was released, Scott said the CRTC had done its job in reviewing its 2019 findings – as required by its mandate.

“What we did (during the review) was a thorough reexamination of the cost models and the application of costing principles to the fares of these carriers, and the results speak for themselves. , they’re set out in the decision, ”Scott mentioned.

The CRTC’s ruling on Thursday said it had found errors, which Scott said were generally the result of calculations made by staff who applied their judgment to fill in the missing information.

He added that in the “vast majority” of cases, the 2019 CRTC rulings were found to be correct, including some that have been appealed by the telephone and cable companies.

Other ISPs have said they are adjusting prices and expansion plans in light of the CRTC’s announcement.

TekSavvy Solutions Inc. said it has put aside plans to add wireless services and may withdraw from some Internet markets following Thursday’s CRTC decision on wholesale Internet tariffs.

But Vice President Andy Kaplan-Myrth said it was too early to determine if he would raise prices as well.

“The point is, it takes a while to figure out what the impact will be on our rate,” Kaplan-Myrth said in an interview on Friday.

Kaplan-Myrth estimated that it will take a month or more for TekSavvy to decide what to do after Canada’s major telephone and cable companies convince the CRTC to reverse the 2019 changes.

Independent ISPs – often referred to as Internet resellers by the telephone and cable companies that sell them Internet capacity – held about 10 percent of the total market a few years ago.

They predicted that the 2019 decision, which took three years of CRTC research and analysis, would be upheld and that they would get money back from what they paid for network access since 2016.

Distributel, another independent ISP that operates in several provinces, will likely notify customers in a few weeks of price increases linked to the CRTC decision.

“At certain speeds, the CRTC has actually increased our costs by up to 40%,” Distributel CEO Matt Stein wrote in an email on Friday.

“We have already stopped selling services at these speeds while we make the necessary changes to increase the price for new customers. “

In addition, he said, Distributel’s rates are generally lower than before the 2019 rate cuts. He was quick to lower rates because he believed the CRTC’s decision would stand up to revisions. .

“Now, knowing that these cuts are not coming, we are forced to make adjustments,” Stein wrote.

Steve Cole, president of Kingston Online Services, said in an email that the CRTC’s decision would result in higher prices for its customers.

“It will probably make us less competitive, but we cannot continue to offer services without some profit margin,” wrote Cole.

Because of the current pricing structure, he said, the bigger operators are able to charge their own retail customers less than they charge wholesale customers like Kingston Online.

Kaplan-Myrth said the CRTC has also changed some rate structures to increase some of TekSavvy’s wholesale costs.

TekSavvy may decide to increase prices to reflect these higher costs or put usage caps on certain plans that provide unlimited data for a fixed monthly price, Kaplan-Myrth said.

“Maybe we take them all out of the market together if we decide those prices aren’t, you know, not competitive, and we focus on other prices that are more competitive. “

But Kaplan-Myrth said “there’s no way” TekSavvy would lower its prices, as it did after the 2019 decision – a move it then reversed during the pandemic because its costs increased.

Instead, the company is looking at potential spending cuts, including a pull-out from some markets and lower growth in investing activities.

TekSavvy had planned to use part of the money donated to purchase wireless spectrum that would eventually allow it to offer mobile phone service to its customers.

But the Chatham, Ont., Based company no longer has the confidence to bid at the wireless spectrum auction that begins in June.

This report by The Canadian Press was first published on May 28, 2021.

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