Teksavvy and Start.ca Raise Internet Prices, Blame Ottawa for Favouring Telecoms [Update]

Two independent internet service providers (ISPs) based in Ontario have raised internet prices, in what they say is a result of the federal government siding with telecoms.

Chatham-based Teksavvy and London-based Start.ca have announced internet price increases, as a result of a recent of the federal government decision to weigh in on the CRTC’s independent ruling from last year.

Last Saturday, the federal Cabinet weighed in to say the CRTC may have erred in its fall 2019 decision to lower wholesale internet rates, citing they were too low and may impede investments in rural Canada. The latter argument has been frequently pushed by major telecoms, who have lobbied the government over the issue and also taken the CRTC ruling to the Federal Court of Appeal.

After the CRTC’s wholesale rates decision last fall, independent ISPs lowered their prices in reaction to the ruling. Major telecom providers opposed and took the decision to court, delaying the rollout of the lowered rates.

On Wednesday afternoon, Start.ca said it would be raising its prices for the first time in 25 years, with prices likely increasing by $5-10 per month for its existing 75,000 customers, following a 30-day notice period.

“We have had to update our pricing and options to reflect the reality that it has been over a year that we’ve been paying the old rates while offering our services modeled on the new rates which have yet to materialize.” says Peter Rocca, CEO at Start.ca, in a statement.

“We recognize that the timing is terrible but we’re still optimistic that the adjusted [CRTC] rates will eventually be deployed and that this price increase will be temporary,” added Rocca.

Similarly on Wednesday, Teksavvy notified customers via email a price increase of $10 per month would be coming on October 1, in what it said was “a difficult decision”, reports Global News.

“After 5 years of cost uncertainty, inflated interim rates, and anti-competitive behaviour by the large carriers, TekSavvy is left with no choice but to interpret this announcement as an expectation from the government that retail prices should be raised,” explained Teksavvy’s email customers.

The Saturday decision by the federal Cabinet “is bad news for consumers and for competition”, said Andy Kaplan-Myrth, VP of Regulatory and Carrier Affairs for TekSavvy, in an emailed statement to iPhone in Canada.

“The government bowed to pressure from the large carriers who used their investment threat to keep prices high and competition low. This is about a government protecting huge profits of already extremely profitable companies at a time when fair pricing for internet is needed by consumers more than ever,” added Kaplan-Myrth.

Update August 20: Teksavvy’s Mike Stanford, VP Marketing, told iPhone in Canada in an email “Price increase notices are now going out to existing customers. They started yesterday and will continue into next week.”

He added “there is no geographic distinction in price increases,” noting service packages with download speeds of 15 Mbps or less will see a $5 per month increase, while speeds higher than that will see a $10 per month increase. The rate increase is for residential customers only and excludes Teksavvy Fiber or LTE customers.