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Cheaper internet for Canadians is on the way

Liberal government finally shows pro-competition colours by taking a stand against Bell.

navdeep bains, cheaper internet

Minister of Innovation, Science and Economic Development Navdeep Bains.

Cheaper Internet:

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The federal Liberal government has rejected Bell Canada’s appeal to scrap a CRTC decision on wholesale fibre internet. As Donald Trump would say, this is yooooge (or “huge” for those not versed in Trumpisms).

To further translate all of that into normal English, small internet providers such as Teksavvy and Distributel will soon get access to the super-fast gigabit networks being deployed by Bell, Rogers, Telus and the country’s other big telecom providers.

With that access, they’ll be able to offer their own services to Canadians.

While the big players are selling super-fast speeds at sky-high prices – Bell’s gigabit service is $150 a month – smaller ISPs are promising to offer them at more reasonable levels. The only question now is when.

Bram Abramson, chief regulatory officer for Teksavvy, estimates it will take at least a year to get the access prices ironed out. The CRTC will have to determine the effective rent costs smaller players will have to pay network owners, which will take some time.

“We’ve won the air war, now it’s time for the ground war to play out,” Abramson said.

In the meantime, prices on other internet services are also likely to come down. The CRTC in March ruled that the existing rents that Bell, Rogers and other big companies were charging smaller ISPs on some slower speeds were neither just nor reasonable.

The big companies were ordered to refile new, lower cost proposals by mid-May. Bell was granted an extension till the end of June, and Abramson is hopeful that the process will be sorted out before the back-to-school season begins.

Teksavvy, for one, expects to be able to pass on the expected savings to customers, meaning that lower prices on existing internet services are on the horizon from at least one ISP.

It’s a safe bet that other smaller providers, hungry to steal customers from their bigger competitors, will follow suit.

The CRTC decided to give the smaller ISPs access to fibre networks in a ruling last July, but Bell appealed it to Prime Minister Justin Trudeau’s new government just as soon as it was elected.

In rejecting Bell’s appeal, Minister of Innovation, Science and Economic Development Navdeep Bains agreed that the CRTC’s attempt to foster more competition among a greater number of internet providers is the correct approach.

Had the government sided with Bell, it likely would have meant the end of many smaller ISPs, who would have been stuck selling slower services on older networks while bigger rivals pushed more customers onto faster fibre connections.

“The CRTC’s decision to extend wholesale broadband regulation to fibre to the home means the CRTC has updated its regulatory approach to keep pace with changing technology and consumer demand,” he said in a statement.

“The decision strikes the right balance between the private sector having incentive to invest and consumers having a competitive choice.”

Bains’ decision isn’t big just because it paves the way for cheaper, faster internet services, it also marks the Trudeau government’s first official pronouncement on the telecom market. The government has been utterly silent on internet and wireless issues since the fall election.

Bains and other government officials have been lobbied hard by Bell and Telus over that time, according to records, leading observers to wonder if the new government might be forming a cozy relationship with industry.

The rejection of Bell’s appeal goes a long way to refuting those worries, although the government now has to contend with the telecom giant’s attempt to acquire Manitoba’s MTS.

Bell is trying to sell the deal as a positive for Manitobans, but some observers believe it would the opposite.

Carleton University professor Dwayne Winseck, for one, says MTS invests more in the province, is more profitable than Bell and sells services at cheaper rates, so the acquisition should be blocked.

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