TekSavvy, Distributel, and other independent internet service providers (ISPs) are criticizing a Thursday decision by the federal Cabinet to endorse the higher wholesale internet prices set by the Canadian Radio-television and Telecommunications Commission (CRTC) last year.
The federal Cabinet has proposed a new policy direction designed that, if adopted, may prompt the CRTC to promote competition in the long term. In doing so, however, Ottawa rejected appeals from TekSavvy and other independent ISPs to immediately lower wholesale internet rates.
ISPs say the decision amounts to “a big loss for consumers and competition in general” as it will discourage competition and lead to higher internet rates for the end user in the short term.
“The federal government says its proposed policy direction is a win for consumers and smaller ISPs, but it is not,” said TekSavvy spokesperson Peter Nowak.
“Instead of immediately lowering prices by overturning a bad CRTC decision, it is asking us to hold out hope that the CRTC will do better in the future. This lack of action and faith-based policy approach is why competitors will continue to exit the market and Canadians will continue to pay some of the highest telecom prices in the world.”
Distributel found the Cabinet’s decision encouraging but ultimately lacking. “The company is disappointed that the government chose not to act on appeals that would have immediately lowered internet rates for all Canadians,” said Distributel in a statement to iPhone in Canada.
The independent ISP added that in the short term, “the decision to keep rates high only ensures that Canadians will continue to overpay for internet services.”
TekSavvy argued that Ottawa’s decision also promotes misconduct by the head of the CRTC, Ian Scott, who the company has registered complaints against for violating conflict of interest laws.
TekSavvy has alleged that Scott broke key federal rules when he held several meetings with telecom lobbyists and executives from telecom giants. TekSavvy’s argument primarily questions Scott’s December 2019 meeting at an Ottawa pub with Mirko Bibic, then-COO, now-CEO of Bell.
The pub meeting in question took place just one week after the CRTC opened an active file to hear Bell’s application to reverse the Commission’s 2019 decision to lower wholesale internet rates paid to Canada’s Big 3 by smaller ISPs.
Last year, the CRTC approved Bell’s request and revert internet rates back to the higher 2016 levels, resulting in less competition and increased internet prices for both wholesale buyers like TekSavvy and the end user.
TekSavvy was quick to appeal the decision, petitioning the federal government to remove Scott while citing the CRTC chair’s meeting with Bibic as evidence of ethical violations at best, and bias at worst. TekSavvy launched a complaint against Scott with the federal Integrity Commissioner earlier this year in March.
In February, Scott claimed that “no rule was ever broken” during his pub meeting with Bibic, which he said was just “beer with someone I have known for many years.” Scott is set to be replaced in September as his five-year term as CRTC chair comes to an end.
