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CRTC’s Decision to Lower Wholesale Infrastructure Access Rates Creates More Competition

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A new interview highlights an internet reseller’s general feelings towards the CRTC’s decision to lower wholesale rates paid to access broadband network infrastructure.

On August 15, the Canadian Radio-television and Telecommunications Commission significantly lowered rates that small internet resellers pay to access network infrastructures built by major providers. According to the CRTC, it made the decision in order to “increase choice, affordability and ensure a competitive marketplace across Canada.”

While many of the major telecoms have pushed back against the decision, saying that lower rates will hurt future investment in broadband infrastructure, many view it as an opportunity for more competition in the Canadian marketplace.

A new interview from The Star with Janet Lo, the vice president of privacy and consumer legal affairs for TekSavvy Solutions, highlights her views on the impacts of the new rate regime.

“We expect to see a more competitive retail marketplace with Canadians paying less for broadband,” said Janet Lo, vice president, privacy and consumer legal affairs for TekSavvy Solutions. “It’s just too early to speculate by how much.”

When asked whether the CRTC’s decision will benefit customers, Lo explained that the resulting lower prices are a boon for consumers:

The CRTC’s decision is very good news for consumers — it will result in lower internet prices. For years, the large carriers inflated the wholesale rates they charged smaller competitors like TekSavvy, so consumers paid higher retail prices. Since last week’s decision, TekSavvy has already launched new, very competitive offers in the GTA and other regions and we hope to announce more exciting news soon.

Lo also explained how the move to lower rates will increase competition in the Canadian ISP market:

To connect our customers to the internet, TekSavvy must buy access to infrastructure owned by former monopoly carriers such as Bell Canada at wholesale rates set by the CRTC. TekSavvy has been ringing alarm bells about inflated wholesale rates for years. The benefit to consumers is clear — lower wholesale rates means lower retail prices and more network investments from competitors.




She also believes that while the decision to lower rates was a good one for wholesale-based competition, there is still a significant amount of work that needs to be done:

Canadians still don’t have meaningful choice for fibre internet and cellphone services. The CRTC is considering ways to remove roadblocks that shut competitors out of those markets. Until that happens, the large carriers will continue to dominate and consumers will overpay.

While the decision could lower costs for consumers, Lo was also asked whether it would discourage the rollout of broadband in underserved areas:

The consensus among the investor community is that the new rates will not have a material impact to these extremely profitable, large telecom companies. The federal government has already granted them generous tax incentives to roll out broadband in rural Canada. So it is genuinely disturbing to see these companies threaten rural Canadians as part of a cynical public relations ploy to avoid more competition.

Read the entire interview with the vice president of privacy and consumer legal affairs for TekSavvy Solutions over at The Star.

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