The CRTC has announced lower wholesale bandwidth rates, allowing smaller ISPs to resell Internet access more competitively.
"As the demand for faster broadband speeds grows, we are putting measures in place to ensure Canada's Internet market remains dynamic," said Ian Scott, Chairperson and CEO of the CRTC. "The final rates we set today will foster increased choice at more affordable prices while encouraging a more robust and competitive marketplace across Canada."
Major line-owning telcos have for years been required to offer bandwidth at wholesale rates. This enables smaller and regional service providers to create different pricing packages, increasing consumer choice, and keeping the Internet market competitive. However, smaller ISPs have long contended that these wholesale rates were not low enough to let them compete effectively.
In 2016, CRTC found that the wholesale rates proposed by telcos "were not just and reasonable." So they set revised "interim" rates. that applied to Bell Canada, Cogeco, Bell MTS, Rogers, SaskTel, Shaw, Telus, Videotron and Eastlink.
The CRTC explains that wholesale rates are specified in two ways. A ‘capacity' rate applies to data used by a small competitor's subscribers. An ‘access' rate simpoly covers the basic smaller ISP's connection to a telco's networks. The new monthly capacity rates announced yesterday were 15% to 43% lower than the previous interim rates, and access rates were 3% to 77% lower. These new rates apply retroactively back to 2016.
The CRTC continues to work on final rates, as well as on terms and conditions for ‘disaggregated' high-speed access in Ontario and Quebec. These are expected in 2020 or 2021. Disaggregated rules would require telcos to charge only for access, provided the connection was made at the telco's central office (CO) or ‘head-end.' The new rules are also expected to mandate resale of access over the fastest fibre-to-the-premises (FTTP) infrastructure.
Smaller service providers TekSavvy and Distributel swiftly announced their approval of the CRTC decision.
"Today's decision by the CRTC is great for Canadian consumers," said Matt Stein, CEO, Distributel Communications Ltd. "By correcting the wholesale rates and lowering them to a fair and reasonable level, the CRTC is opening the door for the industry to innovate and offer great services at fair prices. Canadians benefit from decisions like this one, and we applaud the CRTC for taking such dramatic steps,"
"For years, incumbent carriers inflated their wholesale rates and, as a result, TekSavvy and other competitive Internet service providers struggled to compete," said Andy Kaplan-Myrth, VP, Regulatory and Carrier Affairs. "This decision is one important step toward a fair framework for wholesale-based competition, and TekSavvy looks forward to continuing to fight for FTTP services and a level playing field for service quality."