Thousands sign online petition condemning CRTC endorsement of higher wholesale Internet rates

OpenMedia describes the telecommunications and broadcast regulator's May 27 ruling as a "blatant attack on affordability and choice"

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      An Ottawa-based digital-rights group says that a federal regulator is the "biggest barrier to an affordable Internet in Canada".

      In an online petition, OpenMedia claimed that the Canadian Radio-television and Telecommunications Commission "just screwed Canadians" by allowing large companies like Bell and Rogers to revert back to "oppressively high 2016 [wholesale] rates".

      The petition, which has attracted more than 23,000 signatures, calls on the federal cabinet to overrule the CRTC. 

      The regulator's May 27 decision means that smaller Internet Service Providers—including Teksavvy, Distributel, and EBOX—must pay far higher wholesale fees to the telecom giants for access to their networks.

      According to OpenMedia, that will "inevitably see Internet prices surge and smaller providers struggle to survive".

      "This is the most anti-customer decision OpenMedia has ever seen from the CRTC," it stated. "Something stinks here—and it smells like a regulator that’s been captured by corporate interests."

      The CRTC reconsideration came after the Supreme Court of Canada refused to grant leave to appeal to Bell and Rogers to seek judicial review of the CRTC's 2019 wholesale-rates ruling.

      The recent CRTC ruling varied the 2019 order to roll back wholesale fees. 

      The regulator stated that in reviewing the previous decision, it found that there was "substantial doubt as to the correctness of the aggregated HSA [high-speed access] service rates".

      "The Commission’s general approach towards wholesale service regulation has been to promote facilities-based competition wherever possible," the regulator stated. "Facilities-based competition, in which competitors primarily use their own telecommunications facilities and networks to compete instead of leasing them from other carriers, is typically regarded as the most sustainable form of competition.

      Canada already has some of the highest mobile-data rates in the world, as demonstrated in the chart below by Visual Capitalist.

      Canada's mobile-data charges are among the highest in the world, according to the Visual Capitalist.
      Visual Capitalist

      Higher rates come at a good time for telecom giants

      Earlier this month, BCE Inc. and Telus Corp. stated that they will rely on Nokia and Ericsson to provide equipment for their next-gen 5G wireless networks. Rogers made a similar announcement in 2018.

      Canada is under pressure from its allies, including the United States, not to allow Huawei equipment in its 5G networks due to national-security concerns.

      Last September, Reuters reported that the federal government was sending signals that it might not compensate telecom giants that spent huge sums already on technology from China-based Huawei on 5G networks.

      "In a February 2019 filing, Telus said a ban without compensation could increase the cost of its 5G network deployment and make services more expensive for consumers," Reuters correspondent David Ljunggren wrote.

      According to a 2018 Globe and Mail report relying on unnamed sources, Bell has reportedly spent hundreds of millions of dollars installing Huawei equipment in its network. The same article noted that Telus has reportedly spent $500 million to $1 billion.

      Therefore, it could collectively cost more telecom giants more than $1 billion for them to have to rip out this Huawei gear if Ottawa imposed a ban.

      Without federal compensation, the recent CRTC ruling could come in handy for them in helping offset this expense.