Wholesale Internet Rates |  Many independent actors "are at risk of dying"

Wholesale Internet Rates | Many independent actors “are at risk of dying”

Ottawa’s decision to uphold a controversial CRTC ruling is a missed opportunity for some, but “good news” for others.

The Trudeau government ultimately failed to come to the rescue of independent providers by ordering a drop in wholesale Internet rates. But by asking to prioritize competition, innovation and affordability over mere market forces, he gave some of them a ray of hope.

“We were in post-traumatic shock over the latest decisions, sums up Marc-André Campagna, CEO of independent Quebec Internet provider Oxio. Many indie gamers are at risk of dying in the years to come. But although there is nothing concrete, the guidelines given by the government go in the right direction. »

Long-awaited in the industry, Thursday night the new directive from the federal cabinet fell to the Radio-Television-Telecommunications Commission (CRTC). It occurs after the controversial decision of the federal agency to cancel in May 2021 a significant drop in the wholesale internet rate.

Since this decision, the vast majority of independent providers have increased their Internet rates and the largest of them in Quebec, EBOX, has been acquired by its main competitor Bell.

“Most of the independents just suck it up and have had to pass it on to their customers, and their market share has gone down a lot,” said Matt Stein, CEO of Distributel and president of Canadian Competitive Network Operators (CNCO), which represents 28 independent Canadian vendors.

old directive removed

The CRTC’s May 2021 decision was not reversed by the government on Thursday. Instead, we prefer the status quo and call on the CRTC to take the necessary steps to ensure that Canadians have access to affordable telecommunications services.

However, we took the opportunity to remove an old directive dating back to 2006, adopted when Maxime Bernier was Minister for Industry in the Harper government, which promoted “market forces” and encouraged investment in infrastructure. The Trudeau government now puts an emphasis on competition and “more attractive prices and options” for Canadians.

This directive was still shot down by TekSavvy. This independent internet provider had multiplied requests, in particular to the Federal Court of Appeals and the cabinet, to invalidate the CRTC’s decision of May 2021 and requested the resignation of the organization’s president, Ian Scott, accused of conflict of interests. .

“Instead of immediately lowering prices by reversing a bad CRTC decision, [le cabinet fédéral] asks us to hope that the CRTC does better in the future,” TekSavvy spokesman Peter Nowak said in a statement.

In Matt Stein’s opinion, the long-awaited new directive was “a great opportunity that the government has not taken advantage of.”

It is very unfortunate that the money has not been put back into the pockets of Canadians, especially in these times of inflation. Prices in Canada will continue to be the highest, no doubt.

Matt Stein, CEO of Distributel and President of Canadian Competitive Network Operators

He believes, however, that the abolition of the old 2006 directive, and the fact of demanding more competition instead of letting market forces act, “is a beautiful gift for the next president of the CRTC”. The current president announced in mid-May that he would leave office at the end of his term, next September.

Some flowers

Another aspect that has found favor with some is the Trudeau cabinet’s request to improve smaller companies’ access to wireless networks. Essentially, so-called “mobile virtual network operators” (MVNOs) can, if they hold the frequency licenses in certain areas, negotiate and gain access to the networks of larger companies. This so-called “hybrid” mode could be replaced by unlimited access “as needed”, the federal cabinet warns, if it doesn’t deliver on its promises.

For Globalive President and Founder Anthony Lacavera, who is trying to get his hands on Freedom Mobile, it is a small victory that we are not allowing unlimited access to MVNOs at this time. “This is good news for us, for Videotron: if you give full access, anyone can come in and compete. In the current hybrid mode, you have to have capital, commit to investing in infrastructure. It’s the best case scenario. »

The call for innovation also reassured Marc-André Campagna, whose company Oxio relies on a cloud-based operating system and full transparency for lower prices. “We are an innovative player in the industry, we are probably the only independent that is growing in the market at the moment. […] We have a flexibility that others do not have. »

More information

  • $69
    Average price, in 2021, of the lowest Internet plans reported in Quebec (unlimited, 50 Mb/s/10 Mb/s)

    Source: CRTC, Communications Market Reports 2021


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