Critics say two recent decisions by Canada’s telecommunications regulator are blocking competition in the country’s highly concentrated industry, making it even more difficult to lower prices for mobile and internet services.
For years, Canadian consumers have complained about high cell bills, which are among the highest in the world, and the Liberal government of Prime Minister Justin Trudeau has threatened to take action if providers do not cut their bills by 25%. .
On Thursday, the Canadian Radio-television and Telecommunications Commission (CRTC) ruled that it would not significantly reduce the rates small businesses have to pay to access the high-speed broadband networks of big rivals, including BCE Inc. (BCE.TO), Telus Corp. (T.TO) and Rogers Communications Inc (RCIb.TO), known as Big Three.
This follows a CRTC decision in April when it asked large telecommunications companies to offer wholesale wireless access to so-called mobile virtual network operators (MVNOs), smaller companies that can then resell the capacity at reduced retail prices and pass the savings on to consumers, but with several stipulations that were seen as victories for large companies.
While both decisions were aimed at fostering competition, critics say they will only marginalize small players.
Thursday’s decision will allow large operators to charge rates similar to the prices initially set in 2016 for wholesale access to their broadband networks. The ruling overturns a 2019 ruling – which was still under appeal – that would have forced large telecommunications operators to lower their wholesale rates and make retroactive payments to small businesses.
Thursday’s decision will result in much lower retroactive payments.
TekSavvy, an Internet service provider with approximately 300,000 subscribers across Canada, said it is directly asking the federal government to reverse the CRTC’s decision on broadband access tariffs, one of many avenues open to challenge the decision. He is also asking that the chairman of the CRTC, Ian Scott, be removed from his post.
Andy Kaplan-Myrth, vice chairman of TekSavvy, told Reuters: “I never heard seriously about this scenario, and I never really thought they would do that. He described the decision as “a headstone on the grave of telecommunications competition in Canada.”
The big three operators control 89.2% of subscribers and 90.7% of the revenues of the Canadian telecommunications industry. Lawmakers and analysts have warned the concentration will only intensify if Rogers’ planned $ 16 billion acquisition of Shaw Communications Inc is cleared. Read more
TekSavvy said it would pull out of the upcoming 3,500 MHz spectrum auction in June, the frequency required for 5G deployment, and end plans to launch a mobile service, at following the decision on broadband.
Critics also said the measures allowing MVNOs fell short of what was needed to encourage strong competition.
“The CRTC itself actively recognizes how concentrated the market is, yet their decisions not only continue to maintain the status quo, but tip the scales even further in favor of major telecommunications,” Laura Tribe, Executive Director of OpenMedia, a community organization that advocates for an affordable and accessible Internet, said.
Scott, the chairman of the CRTC, in an interview with Reuters defended the latest decision, saying that “we make decisions that we believe are balanced and in the public interest”.
Rogers and Telus did not respond to requests for comment on Thursday’s decision. BCE said it was satisfied with the decision.
Michael Geist, an internet law expert at the University of Ottawa, said the Trudeau government’s hands-off approach to the issue – returning decisions to the CRTC, Minister of Innovation François-Philippe Champagne refusing to push for important legislation – sent a signal to the market that the government would not be a strong voice for consumers.
Champagne’s office did not immediately respond to a request for comment, but its office previously said it was reviewing Thursday’s decision.
Geist called the current atmosphere a “dark time” for small businesses.
“But obviously it’s ‘happy days are back’ for the Big Three,” he added.
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