Stakeholder reaction to CRTC policy direction mixed

Amongst those independent internet service providers (ISPs) who had been pleading with the federal government to overturn the CRTC's 2021 reversal of a 2019 decision that drastically lowered the rates those ISPs paid for access to incumbent networks, reaction to Thursday's proposed policy direction was like the policy itself: decidedly mixed. While the government declined to overturn the CRTC's 2021 reversal, it did issue a new policy direction to the regulator that contained a number of new guidelines for the proactive monitoring of competition in the wholesale regime going forward. For the Competitive Network Operators of Canada (CNOC), which filed one of the petitions to which the government was responding, the organization was both "discouraged" and "hopeful." "While CNOC is disappointed that the Federal Government has chosen to deny its July 2021 formal appeal to Cabinet … there remains reason to be hopeful that this new and targeted policy direction will make a difference," the organization wrote. The organization also clearly tied the announcement to the appointment of a new chair of the regulator in the fall, as current chair Ian Scott's tenure comes to a close. The "proposed policy direction, if executed properly by the next CRTC Chair, will ensure that smaller independent companies will make the home internet market more competitive," CNOC wrote. The organization has asked Scott to recuse himself from matters involving relations between wholesale companies and incumbent telecom companies after Scott was discovered to have met with top BCE Inc. executive Mirko Bibic in an Ottawa bar in 2019. TekSavvy Solutions Inc., on the other hand, said in a Thursday evening statement that the cabinet decision ultimately "endorsed higher internet prices and misconduct by the head of the CRTC, amounting to a big loss for consumers and competition in general." “The federal government says its proposed policy direction is a win for consumers and smaller ISPs, but it is not,” TekSavvy spokesperson Peter Nowak said in the release. "“Instead of immediately lowering prices by overturning a bad CRTC decision, it is asking us to hold out hope that the CRTC will do better in the future.” TekSavvy, too, had drawn attention to Scott's conduct in recent months. Internet advocacy organization OpenMedia joined TekSavvy in saying that the direction did not go far enough. “Today our government agreed the CRTC is failing Canadians — yet did nothing immediate to fix it,” OpenMedia campaigns director Matt Hatfield said in a statement, while the organization also turned its eyes toward the future. "Cabinet appears to be losing patience with his CRTC’s tardy and disinterested approach. Fortunately, Mr. Scott’s term is now almost up, providing a chance to make a more substantial change to get the CRTC back on track," Hatfield said. Reaction from Bay Street was more muted. "In the short-term, we see a limited impact on the sector from the new proposed policy direction with the government largely reinforcing ongoing CRTC reviews in both wireline and wireless," RBC Capital Markets analyst Drew McReynolds wrote in a Thursday night note, but added that in the medium term, the direction might see the emergence of stronger wholesale markets. "e expect the pendulum to swing more in favour of Internet resellers and facilities-based regional wireless operators as the CRTC looks to update/finalize and implement these wholesale access regimes - both of which, while not game changing for the large incumbents (BCE, Rogers, TELUS), are likely to be directionally negative over time," McReynolds wrote. In the longer term, however, McReynolds wrote that once major 5G and wireline investment cycles are completed, there may be a "a major dial 'reset' in favour of a more service-based policy approach increasing considerably." — Reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Paul Park at ppark@thewirereport.ca

Stakeholder reaction to CRTC policy direction mixed

News | May 27, 2022

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Stakeholder reaction to CRTC policy direction mixed

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