For the first time in a long time, many Canadians are seeing their monthly internet bill shrink — or at the very least, they’re getting an upgrade to faster service at no charge.
Distributel Communications Ltd. on Tuesday became the latest of the independent internet Service Providers (ISPs) to announce an upgrade to internet packages following a CRTC ruling that slashed the rate the telecom giants can charge smaller providers for wholesale access to their networks.
CEO Matt Stein said the vast majority of customers across Canada will see greater value with many enjoying internet speeds roughly doubled for the same price.
“This one’s on us,” he told the Star, suggesting that the initial focus is on providing faster internet speeds at no extra cost “because that’s what our customers tell us they want.”
In a similar move, TekSavvy Solutions Inc., another independent ISP, announced on Sept. 13 that it would reduce prices or upgrade data plans for 85 per cent of its customers starting with their next monthly bill as the company streamlines its retail product line after the Aug. 15 decision by the Canadian Radio-television and Telecommunications Commission (CRTC).
A number of customer who have received notification of the changes took to Twitter to report improvements in their stand-alone or bundled packages. “You just dropped my bill by $6. Didn’t you know this is Canada? You’re doing it backwards!” read a retweet using the hashtag #ThanksAgainCRTC.
On the same day, London, Ont.-based high-speed internet service provider Start.ca said it would improve its cable, DSL and fibre internet plans across Ontario as of October with existing customers to see their rates go down and/or their speeds increase.
Start.ca chief executive Peter Rocca said the reduced cost for so called last mile network access has allowed savings to be passed on to customers with prices for some home high speed cable internet subscribers falling by $20 to $70 per month, with a speed upgrade.
Distributel also said lower costs for network access stemming from the CRTC decision will also further investment in rural offerings as the company is moving forward immediately to offer services in four additional communities across northern Quebec.
Laura Tribe, executive director of internet access advocate OpenMedia, said the promise to continue investing in rural areas is another really positive step “in filling the gaps that Big Telecom is leaving behind.”
Citing the need to increase competition among internet providers, the CRTC set the final rates that cable and telephone companies can charge for network access at 15 to 43 per cent lower than the 2016 interim rates and required major telecom and cable companies to make retroactive payments to the third party resellers as an offset for the higher prices over the proceeding three years.
Major telecom companies Rogers, Shaw, Quebecor’s Vidéotron, Cogeco and Bragg Communications, who say their investments in expanding infrastructure could be impacted if wholesale rates are set too low, are challenging the CRTC ruling over what they call errors of law and an overstep of its jurisdiction.
“If allowed to stand, [the ruling] will create significant and irreversible market distortions while serving as a powerful disincentive to innovation and investment by the cable carriers. Ultimately, Canadian consumers will suffer the consequences,” the companies said in a court filing.
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While third-party resellers argue that the CRTC decision is the result of careful consideration and within the purview of the regulator, a report from TD Securities cites “good odds” for success of the appeal by the big telcos. “We believe…the recent CRTC decision … will be overturned, or at a minimum revised in favour of the [large] telecom and cable players,” Vince Valentini wrote. He also predicted that if the rates are not changed, major telecoms will roll back their investments in broadband networks by $1.7 billion by 2021.
Scotiabank’s telecom and media analyst Jeff Fan had a more moderate view of the effects of the ruling, writing in a note to investors in August that the hit to the major telecom and cable companies may not be quite as bad as portrayed, since they will see increased payments from resellers as a result of greater network usage flowing from the CRTC rate cut.