OTTAWA-GATINEAU – The CRTC took matters in to its own hands Thursday, throwing out the wholesale high-speed access rates proposed by the country’s large cable and telephone companies in favour of its own.
In its decision, the Commission said that the proposed rates from incumbent carriers “were not just and reasonable” and that they were therefore revised downwards. It also expressed “significant concern” that that some of the companies have not conducted their cost studies in accordance with well-established costing principles and methodologies, and disregarded the CRTC provided Regulatory Economic Studies Manuals .
“Competitors that provide retail Internet services to Canadians using wholesale high-speed services must have access to these services at just and reasonable prices”, said CRTC Chairman and CEO Jean-Pierre Blais, in a statement. “The fact that these large companies did not respect accepted costing principles and methodologies is very disturbing. What’s even more concerning is the fact that Canadians’ access to a choice of broadband Internet services would have been at stake had we not revised these rates.”
The CRTC has reduced the proposed transport component rate for a number of companies by up to 89%, while the proposed access component rates of some companies were reduced by up to 39%.
The Commission said that it will continue its analysis of the various tariff notices filed by Bell Canada, Cogeco, MTS, Rogers Communications, SaskTel, Shaw, Telus and Videotron in order to set final rates. It added that it will issue requests for information as a next step in the process, and that all parties will have the opportunity to comment on the tariff notices in order to assist in ensuring that the final rates are just and reasonable.
Official reaction so far has been muted. Both Bell and Telus told Cartt.ca they are analyzing the decision and are not yet ready to respond. Rogers, on the other hand said through a spokesperson: "We are disappointed and do not agree with setting arbitrary rates. We believe in an evidence based, fair balance that both covers the cost of building and maintaining Canada’s world-class networks and incents further investments to keep powering our digital economy."
Independent broadband operators, who have long said the wholesale rates set by incumbent telco and cablecos are far too high, were very pleased by the announcement (which also seemed to catch everyone by surprise, too). "“The CRTC’s decision makes clear that it is very concerned that the rates proposed by the large telephone and cable companies would diminish the competitive choice in Internet services that is currently available to Canadians. While today is one step in a complex process, there is no question that the CRTC is acting to ensure that Canadians continue to have access to a wide selection of competitive, innovative and differentiated Internet services,” said Matt Stein, vice-chairman of the Canadian Network Operators' Consortium (CNOC), and CEO of independent operator Distributel.
"The decision released today removes a significant amount of uncertainty faced by competitive Internet service providers," added Michael Garbe, CNOC’s chairman and president and owner of Accelerated Connections. "We are very pleased that the CRTC recognizes that the rates put forward by the large telephone and cable companies are not reasonable and has taken strong measures to address this issue. The CRTC’s actions will immediately benefit both Canadian consumers and businesses and we are hopeful that the final outcome of this matter will have the same result."
