The CRTC yesterday released its wholesale Internet rates decision, shocking the industry and consumer groups by reversing its 2019 ruling and virtually guaranteeing increased costs for consumers and less competition for Internet services. Indeed, within hours, TekSavvy, one of the largest independent providers, announced that it was withdrawing from the forthcoming spectrum auction and would no longer offer mobile services. In other words, the competitive and consumer cost reverberations from the decision will impact both broadband and wireless services. When the increased costs coming from Bill C-10 for Internet services are added to the equation, the Internet could get a lot more expensive in Canada.
Much of the blame rests with the government as it appointed CRTC Chair Ian Scott, who has presided over a dismantling of a pro-consumer, pro-innovative policy approach. Moreover, the former ISED Minister Navdeep Bains opened the door to this decision last summer by inviting the CRTC to re-examine the 2019 decision and current ISI Minister Francois-Philippe Champagne is seemingly completely uninterested in his own department’s digital files. I’ve written that this government has become the most anti-Internet government in Canadian history and the path that led to yesterday’s decision vaults to near the top of the evidence list.
The wholesale Internet process is remarkable for its incompetence. The CRTC simply decided that “completing a fulsome revision of all the cost studies would prolong the period of regulatory and market uncertainty” so why bother. Competitors reduced prices in response to the 2019 CRTC decision (which Scott now says they should have known were not final) only to have the Commission find substantial doubt with 12 of its own previous findings. That is an astonishing level of fundamental disagreement with a decision issued by Scott himself less than two years ago.
The CRTC’s lack of competence and dismissal of competitive concerns combined with the government’s willingness to vest the future of Internet regulation in its hands creates perhaps the greatest threat arising from Bill C-10. That bill is notable both for how little guidance and how much power the government provides to the Commission. When MPs and concerned citizens raise fears of the Bill C-10 risks to freedom of expression and net neutrality, Canadian Heritage Minister Steven Guilbeault has often responded that Canadians can trust the CRTC.
After this most recent decision, that assurance is just not credible. This is the same CRTC that under this chair:
- rejected a public inquiry into misleading telecom sales tactics, arguing “Canadians already have a variety of options available to them to seek redress depending on the nature of the issue.” The government ordered the Commission to examine the issue.
- announced plans to create a Consumer Internet Code only to have consumer groups boycott the entire proceeding.
- released the Harnessing Change report that called for extensive Internet regulation including new mandated fees on all Internet and wireless services to support the creation of Canadian content. In other words, it supported higher costs for Internet access.
- called for new regulatory powers to regulate online service providers including discoverability requirements. The words Charter, freedom of expression, or free speech did not appear in the submission.
- while acknowledging that “for wireless in Canada .. If you’re asking me if rates are too high, the answer is yes”, refused to require wireless competition because doing so would require “careful and ongoing regulatory assistance” involved in operating a wholesale regime. That decision is already a failure with TekSavvy now saying it will not enter the market.
- called the prospect of increased prices from yesterday’s decision a “false narrative”, adding “Why would it go up? I’m not buying this – not as a result of the establishment of these rates.” Within hours, competitors said prices would be going up.
The consumer perspective is seemingly viewed as irrelevant under the current Scott-led CRTC administration with little concern for the costs of Internet services (wireless, broadband, and streaming). Further, the Commission isn’t even willing to do the hard work, suggesting fulsome cost reviews take time and could lead to market uncertainty.
This is the CRTC that Guilbeault and the government suggest in Bill C-10 that Canadians can trust with the most extensive Internet regulations in Canadian history with implications for freedom of expression, net neutrality, online competition, and consumer costs. Is there any reason for Canadians to trust that their online speech will be safeguarded? For Internet services to expect anything other than years of hearings and expensive, uncertain regulatory processes that make them think twice about entering the Canadian market? For Canadian creator groups to think that they are going to see a dime in new money from Bill C-10 before the end of the decade?
As Maya Angelou said, “when someone shows you who they are, believe them the first time.”
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