CRTC ruling still leaves room for high Internet rates

The regulator’s decision only addresses access, not affordability, critics say

The Canadian telecom regulator’s declaration Wednesday that highspeed Internet is a basic service entitlement like a home phone continues to draw applause, but some observers say the underling problem remains — Canadians still pay some of the highest Internet prices in the developed world.

“This does not address affordability; it addresses access,” Stuart Jack, head of the telecom practice at Nordicity Group Ltd., said.

The consulting firm was commissioned by the CRTC to prepare a 2016 international comparison on home telephone and wireless Internet prices that was published in August. The Nordicity report found broadband Internet prices in Canada in the middle of the pack of a sub-group of eight advanced countries when looking at lower and midtier performance.

But Canada had the second-most expensive prices — behind only the U.S. — for the top download speeds that the CRTC said should be available to residents in all areas of the country.

In remote communities such as the Matawa First Nations in northwestern Ontario, residents are paying far more. Matawa economic development manager Jason Rasevych said residents are paying as much as $200 per month for satellite dishes to access the web because broadband service is so poor.

He said the only way the CRTC’s ruling could promote affordability is if it puts pressure on the federal government to partner with Ontario to bring advanced fibre networks to the community. Jack cited a lack of competition as a reason for comparative- ly high-cost Internet services, along with low population density and expansive geography.

The CRTC, in its ruling Wednesday, also mandated that carriers must contribute to a $750-million fund that will be drawn on over five years to expand networks into rural and remote communities, but the announcement stopped short of regulating prices.

Lack of access to the Internet excludes low-income Canadians from equal opportunities to education, employment, government services and modern civic participation, said Alejandra Ruiz Vargas a spokesperson for ACORN, a national organization of low- and moderate-income families. A survey of almost 400 ACORN members showed 83.5 per cent felt Internet service is “extremely expensive.” Of those, almost 59 per cent said they skimped on other budget items to pay for Internet service because they need it.

But Jack of Nordicity said a cap on Internet prices would discourage a new category of competitors.

TekSavvy, a telecom reseller that is lowering Internet prices for 300,000 customers, also said Internet price caps would be a competition killer. TekSavvy CEO Marc Gaudrault lauded companies such as Rogers and Telus for offering monthly Internet plans for about $10 to certain low-income households, but said the packages are below costs and could not be offered by smaller rivals.

Mean while, CRTC chairperson Jean-Pierre Blais noted that Innovation Minister Navdeep Bains is looking at the issue. “Right now, we’re giving a chance to Minister Bains and others to fill that affordability gap.”