May 28, 2021. Markham, Ontario. CanNet Telecom. (“CanNet”) said it was shocked and disappointed by today’s CRTC decision, which reversed its 2019 decision lowering wholesale rates charged by Canada’s largest carriers (such as Bell Canada and Rogers) to smaller competitors (like CanNet). Our competitor TekSavvy said today’s CRTC’s decision will have immediate, devastating impacts to its business and investments and guarantees even higher retail prices for consumers.
In February 2020, a formal complaint was filed with the Competition Bureau, detailing how Bell and Rogers broke rules to inflate wholesale rates they charge competitors, while using their fighting brands to offer competing retail prices below the wholesale costs they inflated.
Rogers’ fighting brand, Fido, and Bell’s fighting brand, Virgin, have been present in the retail markets for mobile wireless services for many years. It was only after the CRTC began reviewing the wholesale rates charged by Rogers and Bell for wireline Internet services (May 2015), that Rogers and Bell added wireline Internet services to their fighting brands retail offerings (November 2015, and July 2016, respectively.
While leveraging their dominant positions in the wholesale market to inflate competitors’ costs, Bell and Rogers use their retail fighting brands to target and undercut competitors’ retail prices, regularly offering retail prices for a given level of Internet service at a price below the wholesale prices they inflated for competitors. The following table illustrates this phenomenon:
|Fighting Brand Retail|
(50Mbps retail service)
(50Mbps wholesale service)
(75Mbps retail service)
(75Mbps wholesale service)
As you can see from the above table, wholesale costs for internet plans are already too high without adding in any profit margins for third-party ISPs such as CanNet. With the underhanded promotions and prices of Virgin and Fido it is simply unfair competition and will only kill future competition for internet prices/plans in Canada. In the future when the competition is killed off, the big guys will then raise all the internet prices permanently since there would be no one left to challenge them.
Also, OpenMedia’s executive director Laura Tribe called the latest CRTC ruling “the most anti-customer decision I’ve ever seen from the Commission. It’s appalling to see that the CRTC has once again sided with Big Telecom.”