Canadian Government’s “Historic” Plan to Address ISP Competition: Do Nothing About It?

Canada’s Innovation Minister says he has a new plan to address ISP competition. His plan, however, fell flat with critics.

For a number of years now, Canada’s Innovation Minister, François-Philippe Champagne, has been seemingly synonymous with inaction. It seems that lip service has been the most the minister has done to address files in his portfolio. A shining example is the lack of privacy reform which has been mired in 6 years of inaction. The lack of any action, despite calling privacy reform one of his “top priorities“, has led Canadians to sign petitions demanding that he get off is lazy butt and do something.

Another area that is well within the ministers portfolio is ISPs – and competition within the ISP and carrier industry. The track record in this area has been absolutely abysmal. After all, it has been shown that Canadians pay some of the highest cell phone rates in the developed world. Competition has been one of the big reasons why prices remain high (and on an upward trajectory), why quality of service is so low, and why access continues to be a major problem. Indeed, this hurts pretty much ever aspect of the Canadian economy. Whether it’s the lost economic potential with rural and indigenous communities continuing to have no or little access to reliable high speed Internet, ordinary Canadians struggling to pay the bills, or businesses struggling to find an edge in a highly competitive Internet market.

Now, to be fair, there is plenty of blame to go around here with regards to who is at fault for such a terrible situation for a country as wealthy as Canada. Whether it’s municipal governments blocking municipal broadband initiatives, the CRTC rubberstamping mega mergers, or the Federal government refusing to intervene in decisions that actively harm competition.

While the Champagne did some concern trolling over the potential Rogers Shaw merger a while back, it wasn’t until the Competition Bureau got involved and recommended the rejection of the merger that there was finally a ray of hope in this debate. Since then, we really haven’t heard much of anything from the minister about addressing the ridiculously bad situation with competition in the ISP and carrier industry.

Recently, however, the Minister released a statement on the sorry state of affairs in this area. The statement reads, in part:

“While the progress we have made and witnessed to date on lowering prices is encouraging, more needs to be done. Canadians still pay too much for their Internet and cellphone services.

“As part of our continued efforts, we are proposing a new policy direction that requires the Canadian Radio-television and Telecommunications Commission (CRTC) to put in place new rules to improve competition and support consumers, which will lead to lower prices and better telecommunications services for Canadians.

“This new approach sets out to:

  • enhance wholesale Internet access and competition
  • increase mobile wireless competition
  • improve consumer rights
  • speed up new infrastructure for universal access
  • build better regulations to better support Canadian consumers

“Building on the previous commitments we made to place consumer interests and innovation at the forefront of telecom decisions, the new direction would require the CRTC to improve support for service providers that want to offer Internet and mobile services at lower prices to Canadians.

“This decision follows careful consideration of the feedback received from stakeholders and Canadians regarding the CRTC’s May 2021 decision on wholesale Internet rates.

“We recognize the important balance that must be achieved between the need to invest in our networks and the need to promote continued competition and affordability. The wholesale rates decision made by the CRTC in 2021 is an attempt to correct errors made in 2019, and it makes permanent the rates that have been in force since 2016. The decision provides stability, and the government has determined that it will not alter this decision.

The statement is rather odd because we covered the wholesale rate story. At the time, we saw a very different story unfolding. At the time, the CRTC reversed an earlier decision to basically keep Internet and cell phone rates low. This sparked huge controversy because it was a decision that would force rates higher, not lower. In response, independent ISP, Teksavvy called for Ian Scott to be fired. Open Media, at the time, said that they were “appalled” at the decision, saying that the CRTC has once again sided with big telecom. The Federal NDP joined the calls to have the decision reversed. So, it is all the more reason to look at the statement with a sideways look. We can only assume it was basically an attempt to re-write history and say the decision was basically a reflection on trying to lower cell phone and Internet rates when, really, it was a move in the opposite direction.

Apparently, we aren’t the only ones looking at these statements with that air of “what are you talking about?” Others have basically blasted the statement and “plan” as a plan to do nothing to address ISP competition. Open Media criticized the decision as nothing more than cheap talk:

Today our gov’t agreed the CRTC is failing Canadians — yet did nothing immediate to fix it. Instead of giving cheaper Internet today, Minister Champagne’s policy direction gives general instructions that the CRTC must do more for competition/affordability. This talk is cheap.

What people in Canada need is for our Internet prices to fall in line with the rest of the developed world — and that can only begin when the absurdly high 2016 interim wholesale rates are dead and gone.

University Law Professor, Michael Geist, also weighed in:

New telecom directive from @FP_Champagne reads like an attempt to distract from the decision to uphold CRTC wholesale rates ruling. The headline says enhanced competition. The text says more of the same.

On wireless and the need for MVNOs to enhance competition, more of the same again. “If necessary” “if needed” the telltale words for keeping the current system in place that largely denied possibility of enhanced MVNO competition.

Putting an end to the Bernier policy directive provides some certainty and the opening to comments is welcome, but the government’s aversion to big change in the telecom sector to address the woeful state of competition remains the same.

So, for critics, the big and “historic” plan is largely to do nothing to address the problems with competition and the problems that are associated in the ISP and carrier sectors. This is, no doubt, the last thing anyone wanted to hear on this front. Sadly, this isn’t exactly a surprise given the Minister’s current track record of doing pretty much nothing to address issues affecting Canadian consumers. While the Minister might have thought he was going to get some good publicity by pretending to finally start solving problems, all Canadian’s are going to receive is nothing.

Drew Wilson on Twitter: @icecube85 and Facebook.

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