OTTAWA – Competitive Network Operators of Canada (CNOC) filed a formal appeal today, asking Cabinet to overturn a recent CRTC decision to reverse its own 2019 decision on wholesale rates charged to third party internet access providers for network access.
“In May, the CRTC, facing pressure from the large telecom and cable companies’ lobbyists and lawyers, and receiving mixed messages from the government, reversed its own 2019 decision to drastically lower the rates that smaller, independent internet service providers pay for network access,” a press release explains. CNOC requested Cabinet “overturn the CRTC and restore the 2019 decision, thereby ensuring consumer choice, affordability, and innovation.”
The Commission’s “flip-flop will, without a doubt, harm competition, reduce consumer choice, and increase the prices all Canadians pay for home internet,” said Matt Stein, chair of CNOC, in the press release.
CNOC’s appeal to Cabinet, known as a petition to the Governor in Council, highlights that the rates approved earlier this year are up to 260% higher than the 2019 rates the CRTC approved. “Competitors are now faced with wholesale costs that are significantly higher than the retail pricing of Big Telecom flanker brands,” Geoff White, CNOC’s executive director, stated in an email to Cartt.ca. “This situation precludes any opportunity for sustainable competition and will ultimately squeeze competitors out of the marketplace.”
“The CRTC has bought into the big Telecoms’ two-faced strategy of clamoring to policy makers about reduced investment while simultaneously issuing record dividend increases and repurchasing shares in bulk” – CNOC
Prior to the 2021 decision, there was concern about the impact of the 2019 rates on investment. Big telecoms complained those rates threatened their investment plans, according to CNOC’s petition. In addition to this, the Governor in Council expressed reservations about the 2019 wholesale rates due to concern the rates would undermine investment in high-quality networks.
CNOC’s petition takes issue with this claim, arguing the 2019 rates “ensure high levels of network investment while harmoniously advancing the other objectives of the wholesale wireline framework,” unlike the 2021 rates decision, which “represents a dysfunctional balancing of those same objectives.”
CNOC’s petition further argues “The CRTC has bought into the big Telecoms’ two-faced strategy of clamoring to policy makers about reduced investment while simultaneously issuing record dividend increases and repurchasing shares in bulk.”
Empty investment threats from the Big Telecoms are not new, according to the petition.
CNOC’s petition to the Governor in Council is part of a broader campaign by the organization, “to respond to growing consumer backlash against the CRTC,” the press release reads. The broader campaign has led to approximately 40,000 Canadians writing their members of parliament.
“If the government does not put the CRTC back in line with its own policy of promoting consumer interests, competition and affordability, Canadians can expect to pay even more for less,” said White, in the press release. “It’s not too late to reverse course and protect the interests of Canadian consumers.”
CNOC’s full petition can be read here.
