‘Faster, cheaper’ internet services may soon be here thanks to CRTC rule enforcement
Digital rights advocacy group OpenMedia says a CRTC ruling forcing major internet service providers to sell access to their high-speed infrastructure will help Canadians get online “faster” and “cheaper.”
On Wednesday, the Liberal government rejected an appeal from Bell Canada to overrule the Canadian Radio-television and Telecommunications Commission’s decision from last July that required it and other telecom giants to make their advanced facilities available to independent internet service providers at wholesale prices.
Josh Tabish, campaigns director for the Vancouver-based OpenMedia, said the decision spells good news for Canadian consumers.
“It definitely means that faster, cheaper internet services will coming to Canadians very soon,” Tabish told Yahoo Finance Canada.
Tabish said that prices for fibre-optic internet in Canada are currently “extremely high.” He also pointed to 2015 data from the Organization for the Economic Co-operation and Development, which indicates that only 5.32 per cent of Canadian internet subscriptions are fibre-to-the-home or fibre-to-the-building. Meanwhile, the U.S. is at 9.4 per cent and Japan leads the way with 72.6 per cent.
Upgrading to fibre-optic networks has become vital for telephone companies, as traditional DSL, which relies on ordinary copper lines, can deliver internet speeds in the range of 25 megabits per second to 50 Mbps in areas where fibre-optic cable reaches the neighbourhood.
It has also become increasingly important as internet traffic increases across the board.
Bell has spent $2.5 billion building fibre-to-the-home networks since 2010, according to its petition to the government and plans to spend an additional $1 billion this year.
Its cheapest fibre-to-the-home offering currently costs about $90 a month and delivers speeds of 150 Mbps.
The telecom’s top-of-line fibre-to-the-home service, which offers download speeds of 940 Mbps, runs for about $150.
Independent internet services providers currently rely on major telecoms to sell them wholesale access to their networks, which they in turn offer to consumers.
But none of these small competitors – such as TekSaavy, VMedia and Start.ca – have been able to get access to high-speed networks because “they don’t want to play ball” Tabish said.
“They know that a $1 made off wholesale is a lot easier than a $1 made off retail, but they’re not interested in that – they’re interested in control,” he said.
“They want complete control of that platform.”
Tabish added that Bell, which he said has historically operated a regulated monopoly of Canada’s telephone services, has “control in their DNA.”
But Tabish said the CRTC’s new rules will release Canada’s high-speed networks from the clutches its Big Five telcos – who accounted for 62 per cent of the industry’s revenues in 2013, according to the CRTC – and will set off a “race for customers.”
He said competition for internet services in Canada is “widely recognized as a joke” and that the major ISPs don’t compete in “any meaningful sense.”
This results in what he said are uniform prices and offers.
“But this is going along in helping address and really light a fire under the providers to get us there and get Canadians internet access that's on par with our international counterparts, because right now we’re falling badly behind,” he said.
“Once the wholesale rates are set and the small providers can start selling, we’re going to see prices shoot down and see all providers more motivated to get customers.”
When asked to comment the rejection of its appeal and how the CRTC ruling will affect consumers, a spokeswoman for Bell said the company will "abide by the rules and move forward.”
Tabish said Canadians need internet access on par with what is offered in Sandy, Ore., and Chattanooga, Tenn., which both have fibre-optic networks throughout the city.
Sandy offers a plan with download and upload speeds of 1 Gigabit per second, no contract or data caps, for US$59.95 a month.
Michael Geist, a University of Ottawa professor who specializes in internet and E-commerce law, echoed Tabish’s statements, saying consumers should see long-term benefits of “more competition and better choice for high-speed internet services.”
“I’m very supportive of the government’s decision. I think the CRTC ruling will create a more competitive marketplace for internet access,” he said in an email.
“It is good to see that the government recognized the importance of adopting a pro-consumer, pro-competitive approach to telecom policy. It won’t happen overnight, but affirming the policy is an important step forward.”
The CRTC told The Canadian Press on Wednesday that it will base the wholesale prices for access to high-speed infrastructure partly on costs studies provided by the major telecoms.
Tabish said it is expected that they will be revealed within the next 10 to 12 months.