CRTC Decision Will Kill Telecom Competition, Guarantees Even Higher Prices:
Harris Industries is in the process of acquiring a License to Sell and Service Equipment as an Internet Service Provider (ISP) in Ontario using the Wholesaler services through Bell, Rogers, Cogeco and Shaw as mandated by the CRTC. With the latest reversal in a Decision for Lowering Wholesale rates charged, We will struggle to offer services at a comparable price point to the big Three; further locking in the Monopoly of the Big Three, while guaranteeing higher prices to Consumers and Small Businesses across the Country.
(The man facing the camera is Mirko Bibic, chief executive of Bell Canada. Sitting across the table is Ian Scott, chair of the Canadian Radio-television and Telecommunications Commission. These two men met alone at D’Arcy McGee’s pub in Ottawa on Dec. 19, 2019, just six days after Bell filed a major application with the CRTC seeking the reversal of a decision that would significantly reduce wholesale internet rates.)
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May 27, 2021. Chatham, Ontario. TekSavvy Solutions Inc. (“TekSavvy”) said it was shocked and disappointed by today’s CRTC decision, which reversed its 2019 decision lowering wholesale rates charged by Canada’s largest carriers (such as Bell Canada and Rogers) to smaller competitors (like TekSavvy). TekSavvy said today’s CRTC’s decision will have immediate, devastating impacts to its business and investments and guarantees even higher retail prices for consumers.
“Today’s CRTC decision is a tombstone on the grave of telecom competition in Canada” said Andy Kaplan-Myrth, TekSavvy’s VP of Regulatory & Carrier Affairs “Canada’s largest and most profitable telecom companies have successfully gamed the system with impunity. As competitors begin to exit the market, Canadian consumers will pay the price”.
Kaplan-Myrth added that as a result of today’s CRTC decision, TekSavvy has scrapped plans to offer mobile services and informed Industry, Science and Economic Development Canada (ISED) that it is dropping out of the upcoming spectrum auction as it scales back investment plans.
The CRTC today reversed a 2019 Rates Order that confirmed the large carriers systematically broke the CRTC’s rate-setting rules to grossly inflate their costs of providing access to their networks, resulting in higher retail prices for consumers. The 2019 Rates Order set new rates and ordered the large carriers to repay amounts they overcharged competitors during its 4-year long regulatory process.
Today’s reversal came despite the CRTC previously condemning the large carriers’ rate-fixing as “very disturbing” and the 2019 Rates Order being upheld on appeals by the Federal Court of Appeal, the Supreme Court of Canada, and the Federal Cabinet.
The decision is bad news for consumers, as it effectively guarantees internet prices will continue to rise during the COVID-19 pandemic. A 2020 price study prepared by Wall Communications Inc. for ISED found that internet prices increased across all service baskets over 2019, making Canada an international outlier among its peer countries.
In February 2020, TekSavvy filed a formal Complaint with the Competition Bureau, detailing how Bell and Rogers broke rules to inflate wholesale rates they charge competitors, while using their fighting brands to offer competing retail prices below the wholesale costs they inflated.