Last December, the Canadian Radio-television and Telecommunications Commission (CRTC) began a yearlong public consultation on the future of Canada’s Internet services. At its core, the Review of Wholesale Services and Associated Policies is about how Canadians are served by the current structure of our telecommunications system and the policies that govern it.
The consultation will determine whether and how Canadians are able to access affordable and reliable Internet services that are independent of Canada’s large telecom conglomerates. Despite recent improvements, crucial steps remain in reforming our telecommunications sector to ensure it provides a wide range of cost-effective services that allow artists, entrepreneurs, and everyday Internet users to participate in Canada’s growing digital economy.
Sadly, the current state of Canada’s telecom marketplace is often characterized as dysfunctional, driven by oligopolistic forces that impede our ability to fully benefit from the possibilities of broadband Internet.
For example, in 2013, large incumbent carriers such as Bell, Rogers, Telus, and Shaw held 92% of the Canadian residential market. The result, in broad strokes, is that Canadians pay some of the highest prices in the industrialized world for Internet services—a finding confirmed by several independent reports, including the CRTC-commissioned Wall Report, and the Organization for Economic Co-operation and Development’s (OECD) Communications Outlook.
The current CRTC review of wholesale services could potentially improve our telecommunications system in two critical ways.
First, it could overhaul open access rules to put independent Internet service providers (ISPs), such as Teksavvy and Distributel, on an equal playing field to Canada’s big three by ensuring all providers, large and small, have cost-based access to broadband networks. Second, the CRTC could extend this cost-based regime to next-generation ultra-fast fibre Internet networks, to ensure that independent providers can keep up with growing bandwidth demands.
Presently, Canada’s incumbent providers not only control access to crucial wholesale broadband Internet services—the network that non-incumbent competitors rely on to provide their own retail offerings—they also offer their own retail services against which these smaller providers compete. For example, incumbent provider Rogers sells wholesale services to TekSavvy, an independent ISP, while also operating against them in the retail arena.
The resultant situation is ripe for abuse by powerful incumbent providers, which have taken advantage of their market power with a well-documented history of discriminatory practices against smaller, independent operators.
This CRTC consultation will determine whether these practices continue, or whether we will finally move toward a more level playing field for independent services. OpenMedia has been an intervener in the process since the beginning, notably by facilitating nearly 25,000 independently written submissions to the regulator from everyday Internet users.
CRTC Chair Jean-Pierre Blais acknowledged the impact that these contributions can have in a recent speech to the Vancouver Board of Trade: “the very small lanterns of thousands of individual Canadians often create a powerful beam of light. It’s only when the stage is fully illuminated, by all those lanterns, that the full story becomes clear. It is only then that the full public interest comes to light.”
Open access rules for independent ISPs would not only lower prices and improve choice; they are also critical to enabling innovation that would otherwise not occur. As just one example, the acclaimed Canadian TV show Sanctuary, filmed in B.C., began as an online-only program before getting picked up by Syfy (formerly the Sci Fi channel). Creators are just one of the many groups who rely on affordable, accessible Internet access and innovative services to deliver their content to users.
Thankfully, the CRTC has a number of reasons to side with the public interest. For starters, its mandate is drawn quite clearly from Section 7 of the Telecommunications Act, which emphasizes how the wider social and economic needs of Canadians must guide CRTC decision-making.
Past CRTC decisions have recognized this. For example, the regulator recently rejected Bell’s effort to increase payphone prices because it would have disproportionately impacted low-income Canadians. Similarly, several courts have acknowledged this mandate, including an influential Supreme Court ruling that pushed the CRTC to extend its public engagement beyond industry concerns.
While incumbent providers want Canadians to believe that fair, open access policies will hurt investment in our telecommunication infrastructure, this does not bear scrutiny. Interveners such as the Public Interest Advocacy Centre and Primus have thoroughly dismantled such claims by using the incumbents’ own executive statements, annual reports, shareholder messaging and financial data.
Where open access rules presently exist (albeit as a “cost plus” instead of cost-based regime), incumbents have continued to invest in our networks and new offerings have flourished.
While mandating cost-based access is an important solution in the near term, it is important that the regulator consider a more effective long-term solution by moving toward opening the networks through structural separation. That is, the CRTC should put an end to telecom companies controlling both service delivery and the infrastructure through which services are delivered.
This is the most effective long-term solution to a distorted telecommunications market. Doing so would put us in good international company, as this longer-term strategy already enjoys support from the OECD, Australia, New Zealand, Singapore, and Sweden.
Steve Anderson is the executive director of OpenMedia.ca, a community-based organization that safeguards the possibilities of the open Internet. Josh Tabish is the campaigns coordinator with OpenMedia.ca. You can read about OpenMedia’s submission to the CRTC at openmedia.ca/CRTCsubmission.