Why is unlimited internet so expensive in Canada
Why is unlimited internet so expensive in Canada
In Canada, unlimited internet prices have been rising for
several reasons specific to the country’s telecom environment:
1.
Lack of Competition: Canada’s internet market is dominated by a few large telecom
companies, often referred to as the "Big Three" — Bell, Rogers, and
Telus. With limited competition, these companies have substantial control over
pricing, and there's less pressure to keep prices competitive.
The situation got worse when Rogers merged with Shaw in 2023, and we started to see
price increases on the internet plans.
2.
Regulatory Challenges: The Canadian Radio-television and Telecommunications Commission
(CRTC) regulates telecommunications. In recent years, policy shifts have impacted smaller, independent ISPs. Initially, the CRTC proposed lowering the wholesale rates that large ISPs charge smaller providers, who lease
infrastructure.
However, this decision was reversed, allowing major providers to keep wholesale rates high. This reversal made it difficult for smaller ISPs to offer affordable, unlimited internet plans, reducing competitive options for consumers.
3.
High Infrastructure
Costs in Rural Areas: Canada’s vast geography
and low population density, especially in rural and remote areas, make it
costly to expand and maintain internet infrastructure. Large ISPs bear these
costs, and they argue that they need to pass them on to customers to maintain
profitability. This drives up internet costs nationwide, as ISPs set prices to
cover these rural service expenses.
4.
Data Consumption Growth: With rising demand for streaming, gaming, and remote work, the
need for high-speed and unlimited data plans has surged. Canadian ISPs invest
heavily in maintaining and expanding network capacity, and they pass on these
expenses to consumers.
5.
Inflation and Operating
Expenses: Like most countries, Canada has
faced inflation, especially for labour, materials, and equipment. Canadian ISPs
reflect these higher operating costs in the form of increased prices for
customers.
6.
Lack of fibre access for small or independent ISPs: Access to high-speed fibre networks, which are mostly owned by
large telecom companies, is often restricted or offered at higher rates to
smaller providers. Without equitable access to these networks, smaller ISPs
cannot provide the same quality of service, making it difficult for them to
compete on price. This restriction maintains the dominance of the major
providers while keeping fiber prices high.
7.
Limited Government Intervention: The
CRTC and other regulatory bodies have been criticized for not doing enough to
foster a competitive market. Recent decisions have favoured incumbent telecoms,
while calls for increased government regulation, such as setting fairer
wholesale rates or opening up fibre access, have yet to yield substantial
results in reducing consumer prices. The Federal government has been called out
for outrageous government contracts on internet services or the ban on federal
contracts for companies like Rogers, who receive billions of taxpayers’’ money
to “fund” their fibre expansion and investments.
These combined factors create a challenging environment for internet affordability in Canada, making unlimited data plans particularly expensive for consumers.