Posted at 9:00 a.m.
The Trudeau government ultimately did not come to the rescue of independent providers by ordering a drop in wholesale internet rates. But by asking to prioritize competition, innovation and affordability over mere market forces, he gave a glimmer of hope to some of them.
“We were in post-traumatic shock from the latest decisions, summarizes Marc-André Campagna, CEO of the independent Quebec internet provider Oxio. Many indie gamers are at risk of dying in the next few years. But even if there is nothing concrete, the orientations given by the government are going in the right direction. »
Long-awaited in the industry, the new directive from the federal cabinet to the Radio-television and Telecommunications Commission (CRTC) fell on Thursday evening. It comes after the controversial decision of the federal body to cancel in May 2021 a significant drop in the wholesale internet rate.
Since this decision, the vast majority of independent providers have increased their Internet rates and the largest of them in Quebec, EBOX, has been acquired by its major competitor Bell.
“Most of the independents are just holding on and have had to pass it on to their customers, and their market share has gone down a lot,” said Matt Stein, CEO of Distributel and president of Canadian Competitive Network Operators (CNCO), who represent 28 independent Canadian suppliers.
Old directive eliminated
The May 2021 CRTC decision was not overturned by the government on Thursday. Instead, we preferred the status quo and asked the CRTC to take the necessary measures to ensure that Canadians have access to affordable telecommunications services.
However, we take the opportunity to eliminate an old directive dating from 2006, adopted when Maxime Bernier was Minister of Industry in the Harper government, which promoted “market forces” and encouraged investment in infrastructure. Emphasis is now placed by the Trudeau government on competition and “more attractive prices and choices” for Canadians.
This directive was still shot down by TekSavvy. This independent internet provider had multiplied the requests, in particular to the Federal Court of Appeal and to the cabinet, to have the CRTC’s decision of May 2021 invalidated and requested the resignation of the president of the organization, Ian Scott, accused of conflict of interests.
“Instead of immediately lowering prices by reversing a bad CRTC decision, [le cabinet fédéral] asks us to hope that the CRTC will do better in the future,” TekSavvy spokesperson Peter Nowak said in a statement.
In the opinion of Matt Stein, the expected new directive was “a great opportunity that the government has not seized”.
It is very unfortunate that the money has not been put back into the pockets of Canadians, especially in these times of inflation. Prices in Canada will continue to be the highest, no doubt.
Matt Stein, CEO of Distributel and President of Canadian Competitive Network Operators
He believes, however, that the abolition of the old directive of 2006, and the fact of requiring more competition rather than letting market forces act, “is a beautiful gift to the next president of the CRTC”. The current president announced in mid-May that he would leave office at the end of his term, next September.
Some flowers
Another aspect that has found favor with some is the Trudeau cabinet’s request to improve access for smaller businesses to wireless networks. Essentially, what are called “mobile virtual network operators” (MVNOs) can, if they hold the frequency licenses in certain areas, negotiate and obtain access to the networks of the larger companies. This so-called “hybrid” mode could be replaced by unlimited access “as needed”, warns the federal cabinet, if it does not fulfill its promises.
For Globalive President and Founder Anthony Lacavera, who is trying to get his hands on Freedom Mobile, it’s a small victory that we’re not allowing unlimited access to MVNOs right now. “This is good news for us, for Videotron: if you give full access, anyone can come in and compete. In the current hybrid mode, you have to have capital, commit to investing in infrastructure. It’s the best case scenario. »
The call for innovation also reassured Marc-André Campagna, whose company Oxio relies on a cloud-based operating system and total transparency to lower prices. “We are an innovative player in the industry, we are probably the only independent that is growing in the market at the moment […] We have a flexibility that others do not have. »
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- $69
- Average price, in 2021, of the lowest internet plans reported in Quebec (unlimited, 50 Mb/s/10 Mb/s)
Source: CRTC, Communications Market Reports 2021