Competition in Canada’s internet market is dying, and a new opinion piece from Rosa Addario, Communications Manager at consumer advocacy group OpenMedia, places the blame for killing it squarely on the Canadian Radio-television and Telecommunications Commission (CRTC) and Industry, Science and Technology Minister François-Philippe Champagne (via The Toronto Star).
According to OpenMedia, “poor decisions” made by the CRTC and Minister Champagne have fostered an environment where smaller competitors cannot survive. Larger players are continuously gobbling up independent internet service providers (ISPs) as they burn out from high costs and low profits, all while Ottawa and Canada’s telecom regulator are allowing this to happen.
“Unfortunately, the current regulatory environment is causing these small ISPs to disappear before our very eyes,” wrote Addario. Just last week, Cogeco Connexion acquired Montreal-based internet provider oxio.
Last year, oxio shared a breakdown that showed how about 75% of the price it charges for a 60 Mbps connection goes to paying for access to larger players’ networks.
Smaller ISPs like oxio operate by leasing network bandwidth from national players like Bell, Rogers, and Telus, and reselling it to their customers downstream. Unfortunately, many of these companies are being pushed out of the market because of how expensive it is to lease network bandwidth from national players. “Unless something changes — and fast — there won’t be any left,” Addario continued.
Things have only gotten worse for internet competition since 2021 when the CRTC reversed its own 2019 decision to lower wholesale internet rates paid to larger telecoms by smaller companies. Last year, the federal Cabinet rejected appeals from TekSavvy and other independent ISPs to lower wholesale internet rates.
Due to high network access costs, many smaller ISPs end up seeking acquisitions by their very suppliers when they can no longer remain in the black. In 2022 alone, Ebox, Distributel, Altima, and Vmedia were absorbed by Bell, Telus, and Quebecor-owned Vidéotron. Not to mention, Rogers is currently on the cusp of closing its $26 billion takeover of Shaw Communications, Canada’s fourth-largest telco.
Canadians currently pay some of the highest internet and wireless prices in the world, and a lack of competition has much to do with that. “Canada doesn’t have to be a country held captive by oligopoly — Minister Champagne and the CRTC have the power to make change,” Addario concluded. “But do they have the courage?”
Check out Addario’s full write-up over on The Toronto Star.
