Canadian telecoms regulator’s latest move marks ‘dark times’ for small operators

By Moira Warburton

TORONTO, May 30 (Reuters) – Two recent rulings by Canada’s telecommunications regulator freeze competition in the country’s highly concentrated industry, critics say, making it even more difficult to drive down prices for mobile and internet services.

For years, Canadian consumers have complained about high cell phone 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 reduce cell phone bills. 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 large competitors, including BCE Inc, Telus Corp and Rogers Communications Inc, known as the Big Three.

This follows a decision by the CRTC 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 ability to lower retail prices and pass savings on to consumers, but with several stipulations seen as victories for large companies.

While both decisions were aimed at fostering competition, critics say they will only marginalize smaller 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 telecom operators to cut 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 about 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 president of TekSavvy, told Reuters: “I never heard of this scenario seriously, and I never really thought they would.” 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 would only intensify if Rogers’ planned $ 16 billion acquisition of Shaw Communications Inc was allowed to continue.

FALL IN SHORT

TekSavvy said it will pull out of the upcoming 3500 MHz spectrum auction in June, the frequency required for 5G deployment, and abandon plans to launch a mobile service, following the decision. on broadband.

Critics also said the measures to allow MVNOs fell short of what was needed to encourage robust competition.

“The CRTC itself actively recognizes how concentrated the market is, yet its decisions continue not only to maintain the status quo, but to tip the scales even further in favor of major telecommunications,” Laura Tribe, Managing 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 participatory approach to the issue – by referring decisions to the CRTC, Innovation Minister 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 had previously said it was reconsidering Thursday’s decision.

Geist called the current atmosphere a “dark time” for small businesses.

“But obviously, ‘the happy days are back’ for the Big Three,” he added. (Report by Moira Warburton in Toronto edited by Denny Thomas and Matthew Lewis)


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