CRTC ruling may bring lower prices
Cheaper Internet service possible
TORONTO — A ruling from Canada’s telecommunications regulator is bringing certainty to what independent players will pay to rent access to major Internet providers’ networks, but offered little clarity on the ultimate effect on consumers’ monthly bills.
In a policy statement and eight separate decisions made public Thursday, the Canadian Radio-television and Telecommunications Commission adjusted some of the approved rates major providers can charge, most notably cutting BCE Inc.owned Bell Canada’s Ontario and Quebec wholesale rates for its DSL service by more than half. On the other end, rates for some cable providers went up slightly or stayed largely the same.
“The business case for those who lease access from Bell just got better,” Geoff White, senior manager at strategy consulting firm Nordicity, said in an email. “However, it is too early to assess how this will affect end-users at home.
Independent Internet resellers represent only about six per cent of the market, but they are a significant driver of competition in the sector. The wholesale rates they get from the incumbents are critical for these smaller companies as they turn around and sell that capacity to the same customers Bell, Telus and Rogers are targeting.
The wholesale prices the major telephone and cable companies charge independent providers for access to their networks don’t always directly translate into retail prices consumers pay but can have a follow-on effect as the small providers adjust their pricing accordingly.
“I don’t know exactly what this will translate to when it comes to our consumers in the near future — we’ll need to assess that in the weeks ahead,” said Marc Gaudrault, chief executive of Chatham, Ont.-based independent Internet service provider TekSavvy Solutions Inc. “But there’s no doubt that our costs have gone up on (the cable) side so perhaps rates won’t go up but perhaps value for your dollar may go down.”
Gaudrault, whose company serves about 200,000 customers, mostly in Ontario, added that the decrease in Bell’s Ontario and Quebec rate was a positive element of the ruling for his business and, while rates for his DSL users might not go down, value would improve.
A spokesman for BCE said the company was still assessing the impact of the “complex set of decisions.”
Thursday’s ruling, which finalized rates under both the capacity-based billing and flat rate models after a number of appeals, traces back to the controversy that exploded two years ago over the application of so-called usage-based billing to wholesale pricing.
While a further appeal or petition to the federal cabinet is possible, it seems the CRTC attempted to provide a degree of closure with its ruling, stating it “seeks to remove any remaining uncertainty, allowing all service providers to move forward.”
“What’s most likely at this point is that people are just going to have to live with it and carry on their business,” said George Burger, adviser to VMedia Inc., a Torontobased IPTV and Internet services provider. “At some point you just have to knuckle down and do your business and to that extent this is a relief and my view is that it could have been worse.”
The commission approved an increase in the wholesale rates for Rogers Communications Inc., Shaw Communications Inc. and Quebecor Media Inc.-owned Videotron, and decreased the rates for Cogeco Inc.