The federal government is supporting Canada’s largest telecoms’ petition to lower the CRTC’s wholesale rates.
“On the basis of its review, the Governor in Council considers that the rates do not, in all instances, appropriately balance the policy objectives of the wholesale services framework and is concerned that these rates may undermine investment in high-quality networks, particularly in rural and remote areas,” said Innovation Minister Navdeep Bains in an August 15th statement.
“Retroactive payments to affected wholesale clients are appropriate in principle and can foster cooperation in regulatory proceedings. However, these payments, which reflect the rates, must be balanced so as not to stifle network investments.”
Last August, the CRTC lowered the wholesale rates that large providers can charge for access to their high-speed broadband networks, stating that this would “facilitate greater competition.”
This resulted in capacity rates dropping five percent to 43 percent, while access rates lowered three percent to 77 percent. At the time, the CRTC argued that the new capacity rates were 15 percent to 43 percent lower than the interim rates, with access rates three percent to 77 percent lower than the interim rates.
Smaller ISPs like TekSavvy and Distributel have expressed satisfaction over the changes. However, telecom giants have called for the CRTC to lower the wholesale rates, stating that they stand to lose roughly $350 million in retroactive payments to smaller providers as part of the decision. This, in turn, would greatly hinder their ability to invest in high-quality networks, the larger carriers have argued.
For now, though, Bains noted that it’s not necessary to refer the wholesale decision back to the CRTC for reconsideration, given that it’s already in the process of reviewing it. To that end, Bains said he encourages all parties to cooperate with the CRTC for the time being.
“We will continue to monitor the CRTC proceedings closely to ensure our frameworks have the right incentives for investment and competitive choice, while preserving our policy flexibility for the forthcoming CRTC decision to ensure these important objectives are met,” concluded Bains.
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