Federal Government’s hesitation to support fair wholesale rates could make internet less affordable for Canadians

This past Saturday, August 15, federal minister Navdeep Bains issued a statement expressing concern about the CRTC’s August 2019 decision to cut wholesale internet rates. He stated that “these [reduced] rates may undermine investment in high-quality networks, particularly in rural and remote areas.“ The CRTC is responsible for setting the rates that incumbent network operators may charge to independent ISPs, to provide wholesale internet services to their subscribers. While the CRTC’s August 2019 decision is currently pending an appeals court process, Minister Bains’ statement, in response to submissions made to the Governor in Council on the matter, indicates that he questions that ruling. 

However, many rural broadband advocates, including Cybera, believe that the CRTC’s decision was a positive step in advancing competition and affordability in the telecommunications market. 

"When it comes to broadband, affordability and competition go hand-in-hand,” says Barb Carra, President and CEO of Cybera, a not-for-profit agency that operates Alberta’s Research & Education Network. “Independent service providers, who are essential to ensuring healthy competition in Canada’s telecommunications market, can only operate effectively when wholesale rates are fair. After the August 2019 rate-cut, many of these providers passed on significant savings to their customers, which proved that lowered rates were an effective means to reduce internet costs for everyday Canadians.”

Cybera previously commended the CRTC for its rate-cute decision, citing clear evidence that wholesale internet services provide more affordable internet access and improves competition. In its own August 2019 decision, the CRTC stated that;

The Commission considers that the [new] rates will facilitate greater competition and promote innovative broadband services and more affordable prices for consumers.

“It’s clear that the CRTC made the correct decision in lowering wholesale rates, and it's disappointing to see the federal government indicating these rates should, in fact, be higher, particularly at a time when affordable connectivity is more important than ever,” says Carra. “Minister Bains’ statement also coincides with the federal government failing to meet its commitment to accelerate Universal Broadband Fund investments in internet infrastructure in response to COVID-19.” 

“We are asking the federal government to take every possible opportunity to ensure all Canadians have access to affordable internet services.”