Last week, the Canadian Radio-television and Telecommunications Commission (CRTC) announced a decision to lower wholesale rates for broadband Internet, in a move said to jumpstart competition.
Smaller Internet service providers purchase from established players at wholesale rates, to then resell to customers at prices which normally offer a better deal than incumbents.
Bell has announced this morning the CRTC’s decision will impact the company by over $100 million, and thusly will cut back its plans to roll out wireless broadband Internet to rural and small towns by 20%, or 200,000 households.
“The CRTC’s decision transfers capital from providers like Bell who are building Canada’s modern broadband networks to wholesale resellers that invest little to nothing – and there’s no assurance or requirement from the CRTC that any of it will be dedicated to network buildouts or otherwise passed on to Canadian consumers,” said Mirko Bibic, Bell’s Chief Operating Officer, in a press release. “Putting this kind of unexpected and retroactive tax on capital investment is not the way to ensure the continued development of Canada’s Internet infrastructure.”
Bell says the “estimated cost impact” of the CRTC decision will be over $100 million, as the company will be making retroactive payments to resellers. The CRTC said its new wholesale rates would be retroactive dating back to 2016.
According to Bell, this will scale back its Wireless Home Internet (WHI) rollout to roughly 1 million locations, or 200,000 households, it explains.
“Bell has made great strides in connecting smaller communities with our innovative WHI technology, and we expanded the program due to the federal Accelerated Investment Incentive that has advanced capital investment across a range of Canadian industries,” Bibic further explains.
“It is unfortunate that the CRTC’s decision will hinder the positive momentum we’ve built in bringing full broadband Internet access to rural and other underserved communities,” concluded Bell.
Bell refers to the Competition Bureau’s August 7 report on the state of Internet competition in Canada, which warned of “potential negative effects” should wholesale rates not be set at “realistic levels”.
What do you think of Bell’s decision to scale back its wireless Internet plans to small towns? Is the CRTC to blame?