By Ahmad Hathout
An independent telecommunications association is asking that the CRTC to raise the revenue threshold for companies required to contribute annual fees to the commission, after the regulator ruled similarly for broadcasters last month.
The Independent Telecommunications Providers Association filed a Part 1 application made public this week imploring the regulator to this year increase the revenue threshold from $10 million to $25 million of previous year’s financial results – money that goes toward CRTC operations and a regime that funds telecommunications services.
“Today, the application of the $10 million [Canadian Telecommunications Services Revenues, or CTSR] mandates contribution payments by an ever-increasing number of small service providers that are a fraction of the size of a provider that would have qualified for exemption in 2000,” it said, referring to the year the threshold was set.
“In addition, small providers are likely making increasingly negligeable payments towards Annual Telecom Fees and the contribution regime, given the effects of inflation and the significant reduction in the contribution rate,” it said, adding $10 million is worth just under 60 per cent of what it was worth in 2000.
The change in threshold, the ITPA argues, will also boost competition. “The current high inflation and recent supply chain issues associated with the COVID-19 pandemic continue to wear on the smallest providers in the industry.
“Furthermore, ITPA members are typically small providers that operate in low-density rural markets where the costs to provide service to the average customer are far higher than in urban areas. Operating costs continue to increase year-over-year,” it said, adding removing an impediment will allow these smaller players to compete against the larger ones.
The ITPA is also asking that the CRTC commit to an annual review of the threshold and index it to inflation.
When the CRTC set the threshold 24 years ago, it noted that it would be subject to review.
The association cited a similar move the CRTC made on the broadcasting side, raising the exemption threshold up to $25 million to contribute to CRTC fees. The decision comes in light of the ongoing process to implement rules from the Online Streaming Act, which will bring online platforms under the commission’s ambit to regulate and thus broaden the pool of support.
The organization also said this would be in-line with cabinet’s 2023 policy direction to the CRTC, which requires proportionality of fees to their purpose.
“The continued application of the outdated threshold fails to serve its intended purposes by capturing a larger number of smaller providers that are contributing relatively negligeable amounts to the regime,” the ITPA said in its application.
