Reaction is pouring in over the CRTC decision to keep prices low. Teksavvy and OpenMedia are both condemning the decision.
Recently, we reported on Canadian regulator, the CRTC, reversing a 2019 decision on wholesale rates. In short, smaller carriers argued successfully that wholesale rates are overly inflated and need to be kept low. The CRTC, at the time, agreed, pointing out that the rate fixing on wholesale rates was disturbing. The net result is that smaller players were able to pass savings on to consumers while potentially expanding their businesses, chipping away at the monopoly-like power big carriers have on the Internet and cellular markets.
Recently, however, the CRTC reversed the decision, paving the way for rate hikes. Economically, as also pointed out by others, the results of this are going to be obvious. Some of the smaller players will be forced out of the market while others will be forced to raise their rates. This makes Internet and cellular costs more expensive. So, when the competition is forced to either drop out or raise their rates, what do you think the bigger players are going to do in response? Raise their rates. None of this is really all that shocking. We are pretty much stating the blatantly obvious here.
Unsurprisingly, the CRTC has already been blasted as making a highly anti-consumer decision here. As we noted in the previous report, University law professor, Michael Geist, highlighted a string of anti-consumer decisions made by the CRTC, concluding that if these decisions are being made with Internet connectivity, what is going to happen when they start regulating user generated content – and thereby, regulating Canadian’s free speech?
Teksavvy, arguably Canada’s most famous independent carrier, is responding to the ruling. That carrier is calling for the firing of CRTC chair, Ian Scott. They note that he is a former Telus lobbyist turned chairperson. This, of course, is nothing new as the CRTC has a long history of bringing on board lobbyists working for the very companies the regulator is supposed to be regulating. Still, it is a very worthwhile reminder that this is not only still happening today, but has happened in this specific case. More from the press release:
With obscenely high wholesale rates locked in and the repayments cancelled, independent ISPs will now be unable to offer competitive pricing or grow their operations. Some are likely to fold. Jobs will be lost. Investments will be pulled back.
TekSavvy has already made the decision to withdraw from next month’s auction of wireless spectrum, a process that would have led to more choice for Canada’s similarly beleaguered mobile phone users. TekSavvy is also now likely to scale back on plans to invest $250 million in building fibre and wireless networks around Southwestern Ontario. This is sad for us, our employees and customers. We were excited and ready to go.
The wholesale ruling is not the only reason why Scott must be fired – it’s merely the final straw.
It follows closely the CRTC’s recent flawed decision on mobile competition, which requires that aspiring new wireless competitors not only purchase spectrum – a rare and expensive asset – but that they also negotiate rates with Bell, Rogers and Telus, companies that have so far shown zero interest in doing so.
Scott tried to convince Canadians that the decision will lead to more competition and lower prices. The consensus among anyone who doesn’t cut a check from Big Telecom is that it will result in the opposite.
Now, Scott is similarly trying to convince Canadians into believing that this week’s flip flop on internet rates won’t have a negative effect on consumer prices, telling reporters he doesn’t “buy the narrative” that they will go up. But, as a recent federal government report found, they already have – and without wholesale ISPs keeping them in check, Big Telecom now has carte blanche to keep raising prices ad nauseum.
Canadian digital rights organization, OpenMedia, also expressed displeasure from the ruling. The organization also notes that it is inevitable that rates will rise and further comments with the following:
The decision comes after Big Telecom appealed the 2019 decision to each of the Federal Court of Appeal (FCA), Cabinet, and the CRTC. While the FCA rejected the appeal, Cabinet sent the decision back to the CRTC with instructions to find ‘balance’ between investment and affordability. The move was widely criticized at the time as asking for higher Internet rates – something most certainly confirmed in today’s decision.
OpenMedia Executive Director Laura Tribe had this to say in response:
“It’s appalling to see that the CRTC has once again sided with Big Telecom. It’s clear they couldn’t care less about consumers, affordability, or small providers. This is the most anti-customer decision I’ve ever seen from the Commission. They effectively decided it would be too much work to get the rates right, so they’re just giving up – on their own work, on small internet providers, and Canadians. And if that wasn’t enough, they continue to double-down on their dogmatic faith in ‘facilities-based competition’ – the same model that for decades has failed to lower prices, or deliver sufficient speeds to those in rural and remote areas.
The Liberal government campaigned on a platform of Internet affordability, but their pick for CRTC Chair has undermined this pledge at every turn. In his time as Chair, Ian Scott has overseen the rollback of nearly every gain we’ve made for Canadians. What’s worse, Cabinet actually set the stage for today’s disastrous decision, as their August 2020 Order in Council amounted to asking the CRTC to raise the rates. Our community won’t let this betrayal stand, and we can guarantee Canadians will remember it and hold them accountable next time they go to the polls.”
The organization is using a similar argument we made in our previous piece in that numerous political parties promised to bring more access and affordable Internet to rural and indigenous communities. Raising the rates basically undermines this promise directly. What’s more is that this further cements the united front against this decision. Politically, with Bill C-10 being universally condemned as a threat to free speech, all this is shaping up to be a solid case against the Liberal Party of Canada.
As we pointed out multiple times in the past, all of this is just self-inflicted shots for the Liberal Party. They didn’t have to try and curtail free speech through Bill C-10. They didn’t have to appoint a chair that would ultimately undo all the consumer protections built up over the years. Really, they didn’t have to push for a link tax law that would undermine the very building blocks nor did they have to be labelled as thought police over the seemingly forthcoming online harms legislation. Still, here we are with a political party that has this odd knack of punching themselves in the face.
Really, all they had to do was sail through the COVID-10 pandemic, consolidate the good will they got from handling the pandemic reasonably well, call an election and win their majority when the polls looked particularly good. Instead, they had to make things much more difficult for themselves in the process.
While some die-hard Liberal party supporters will simply scream “Conservative hack”, the problem is, the people speaking out in this case are non-partisan (ourselves included). It’s really a simple case of seeing a threat to freedom of expression or the Internet and act accordingly. For those who haven’t been around for very long and think that we are just blowing smoke when we say digital rights observers would criticize the other party just as much, then we encourage you to see our coverage around the Harper Conservative years. We’ll leave this as an example here.
Of course, this leads to a very important question: if Canadians need to remember things like the CRTC decision, the link tax, online harms, and Bill C-10 for the next election, who should they support in the next election? To put it bluntly, things get much more messy than you might think. When the Harper Conservatives were in power, they had no problem putting forth anti-consumer legislation themselves with copyright reform and Lawful Access legislation.
Traditionally, the largest party digital rights advocates feel good supporting is the NDP. This has been the case for well over a decade. Of course, this year, they had to blow that track record by supporting the Liberals in shutting down debate over Bill C-10, so this adds complexity to this that really shouldn’t have been there before. Based on their vision of the last election and the track record prior to this massive blunder, that would still be a reasonable alternative.
The Green Party, meanwhile, hasn’t really tarnished their record so far that we are aware of. They still had a really good platform on the digital rights front from the last election.
The more obvious choice would seemingly be to support the Canadian Pirate Party – a political party devoted to these specific issues. Unfortunately, the party was de-registered in 2015 and the party effectively missed two elections in a row. So, even if you did want to vote for them, you actually were unable to for the most part. With the last tweet being posted in 2019, it isn’t looking good that they’ll be around for this up and coming election either. Really, all of these issues actually makes a great case for the existence of the Pirate Party of Canada, but sadly, it doesn’t look like they will be filling that void for this election either.
Perhaps the lack of a political alternative that could win at least a minority government may be factored into the political calculus here. It’s all well and good (in fact, it’s a worthwhile endeavor to do so) to say that Canadians will remember these actions by the Liberal party when they go to the polls.
The problem is that, the follow-through to that threat is, well, kind of missing or not well formulated yet. The ugly thing is that this sends an awful message that if the Liberals decide to continue trampling on your right to free expression, there isn’t really a political price to pay – at least, nothing that we’ve seen so far that looks even remotely promising. What Canada needs is a strong voice that is credibly going to take on these challenges to digital rights. The most Canadians are going to get is a steep uphill battle. As a result, this makes the political/electoral fight an avenue that shows little promise at this stage.
Drew Wilson on Twitter: @icecube85 and Facebook.
