TekSavvy Urges Competition Bureau to Fight ‘Predatory Pricing’ by Telcos

TekSavvy wants the Competition Bureau to do something about the “predatory” internet pricing practices of national telecom operators like Bell and Rogers.

In a letter dated Tuesday, August 17, the independent internet service provider (ISP) told the Bureau that larger operators “have engaged in a sustained strategy of predatory pricing in the retail market for internet services using their flanker brands.” TekSavvy specifically named Bell’s Virgin brand, Rogers-owned Fido, and Videotron’s Fizz as offenders.

According to TekSavvy, these flanker brands regularly offer retail prices that are lower than the wholesale rates independent providers like TekSavvy pay their parent companies for access to their networks and infrastructure. This results in TekSavvy and those like it being unable to compete.

TekSavvy pointed out that such pricing strategies amount to an anti-competitive act that violates the abuse of dominance section of Canada’s Competition Act.

Wholesale rates have gone up since the Canadian Radio-television and Telecommunications Commission (CRTC) failed to lower them in 2019. Teksavvy and others have tried to bring wholesale internet rates back down, albeit to no avail.

Predatory pricing from larger telecoms and high wholesale rates are turning into a pincer move that TekSavvy fears will ultimately push smaller players out of the market.

“If left unchecked, this combination of circumstances is likely to lead to TekSavvy and other [wholesale-based competitors] exiting the retail market for wireline broadband services, which is almost certain to lead to substantially higher prices in retail broadband markets in Ontario and Quebec, as well as the rest of Canada,” the company said in its letter.

Smaller companies have already started making their exits. VMedia, a Toronto-based independent telecom operator, recently sold out to Quebecor. EBOX, the largest independent ISP in Quebec, was acquired by Bell earlier this year.