Consumer Advocate Slams Feds: ‘Complete Failure’ for Letting Internet Competition Crumble

Last Friday, Bell announced it was set to acquire independent internet service provider (ISP), Distributel, reducing yet another provider. Bell purchased Ebox in February as well.

Now, consumer advocates and independent ISPs have weighed in on the matter, reports the National Post.

Vancouver-based internet advocate, OpenMedia, told the Post, “We are losing the very marginal telecom competition that we’ve ever had. We don’t have nearly enough, and over the course of this year, we’ve been seeing it steadily erode.”

Larger internet players seemingly acquire smaller independent ISPs as one way of reducing competition in the marketplace. Quebecor announced it would acquire VMedia this summer.

The ongoing acquisitions have resulted in the independent ISP sector being “already dead”, said John Lawford, executive director of the Public Interest Advocacy Centre. Lawford also blamed the federal government’s inaction for allowing this to happen, saying it’s a “total, complete failure on the part of the government and the regulator to come up with a competitive market.”

Back in 2019, the CRTC lowered wholesale internet rates—the price at which big players sell internet to independent ISPs to resell to consumers—but then reversed its decision in 2021, saying it was made in error. It also didn’t help when big telcos protested the 2019 decision.

The decision stayed and the federal government refused to intervene when it had a chance this past May.

“Like many Canadians, I learned this evening of the proposed transaction for Bell to acquire internet provider Distributel. I trust the Competition Bureau will ensure this transaction protects the interest of Canadians when it comes to affordability and competition,” said Minister of Innovation, Science and Industry, François-Philippe Champagne on the day after Bell’s announcement.

The Competitive Network Operators of Canada, which represents independent ISPs, told the Post, that the “loss of independent competitors to large incumbents who have relentlessly attacked and weakened the CRTC’s wholesale access framework is worrisome, because home internet prices have been on the rise, and we expect that trend to continue and worsen with each acquisition.”

According to Lawford, he believes minister Champagne should intervene and lower wholesale rates, because the CRTC won’t do it. “Clearly the market effects are destruction of the independent ISP sector,” added Lawford.

Back in May, the federal government announced its future telecom decisions would prioritize “consumer interests” for lower bills. It remains unclear how and when consumer bills will go down based on government decisions.