DAILY NEWS Feb 22, 2013 8:10 AM - 0 comments

CRTC Says Everyone Wins with New Rules for Internet Pricing

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The debate over Internet rates is over.

In a series of decisions that are said to finalize Internet pricing in Canada, the country’s telecom regulator has established wholesale rates for the high-speed access that independent service providers use to offer their own Internet services.

It says the rulings will be “favourable” to consumers, “enabling” to larger providers and more “straightforward” for the independent ISPs.

The Canadian Radio-television and Telecommunications Commission (CRTC) based the new rate structures on cost information provided by the Internet companies themselves, and it added a “reasonable mark-up”. Public hearings were held on the subject last year.

As a result, it says, some ISPs will see significant reductions in the wholesale rates they pay.

“We are pleased to finally close this chapter after a careful examination of the wholesale rates,” said CRTC Chair Jean-Pierre Blais, “which included a review of the costing information.”

Some larger Internet Service Providers, like Bell, have seen the wholesale rates for its DSL service reduced by more than half.  The CRTC approved rate increases for competitors Rogers, Shaw and Videotron, with lower rates for Cogeco, Telus and Bell (save for Bell Aliant in Atlantic Canada).

Those ISPs that sell wholesale high-speed Internet access services to smaller independent service providers must now offer the same rates for business and residential end-users.

The CRTC says this will result in a more straightforward billing process for independent service providers, while enabling large companies to recover their costs and make further investments in their networks.

Independent service providers serve a small but significant segment of the market: CRTC stats showing more than 700,000 high-speed residential Internet subscribers, or roughly seven per cent of the market, in 2011.

The CRTC does not approve retail Internet rates and packages offered to Canadian consumers, but it says that its setting of the rates “will have a favourable impact” in the competitive consumer retail market.

Internet lobby and citizen’s advocate groups are not so sure.

OpenMedia.ca, which inspired and helped coordinate an online petition by Internet users against high pricing structures, said the CRTC decision “appears to take small steps” towards controlling the costs that many see as far too high, especially when compared with Internet access rates in other countries.

OpenMedia said it is hopeful this decision will help independent ISPs provide affordable telecom options on a more level playing field, but it is clear that much more is needed to fix Canada’s dysfunctional telecom market, noting that the three major providers still control some 90 per cent of the market.

“This decision is a small step in the right direction, but now we need bold action from policymakers to empower affordable choices for Canadians and make our country a leader in digital services again. The cat’s out of the bag, and now it’s time to fix our broken telecom market,” said OpenMedia.ca Executive Director Steve Anderson.

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