Bell restores network investment pledge; TekSavvy petitions gov on wholesale rates

In what the company says is a direct response to the CRTC’s reversal on wholesale high-speed internet access rates, BCE Inc. announced Monday that it is increasing the amount of its capital investment program by about $300 million over the next two years, bringing the total amount for investment roll out up to between $1.5 billion and $1.7 billion. 

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Wholesale rates decision signals shift at CRTC: wholesale ISPs, analysts

As reaction continues to pour in following the CRTC’s Thursday decision to finalize wholesale internet access rates at 2016 levels and effectively reverse a 2019 decision that dramatically lowered those rates, initial responses from both industry analysts and industry players (other than incumbents) has zeroed in on whether or not the decision represents a larger shift in CRTC policy. 

The NDP has blasted the decision and blamed the Liberal government for choosing “to side with big telecom companies, allowing them to charge more for these vital services.”  TekSavvy Solutions Inc. has said it will pull out of the upcoming 3,500 MHz spectrum auction, with the company’s vice-president of regulatory affairs calling the decision “a tombstone on the grave of telecom competition in Canada.” The CEO of VMedia Inc. has called on CRTC chair Ian Scott to resign and for Parliament to launch an “immediate investigation” into the decision. 

Industry analysts, too, wondered if the decision reflected a sea change at the regulator, as they celebrated the decision’s impact for incumbent telecom companies. 

In a Friday afternoon statement NDP telecommunications critic Brian Masse said he was “deeply discouraged with the CRTC’s move to reverse their decision to drop wholesale internet rates.”

“During this pandemic, Canadians have been more dependent than ever on high-speed Internet connection for work, school, business and innovation; it is an essential service,” he said. “Keeping people connected depends on the availability of accessible and reliable internet. However, rather than looking out for Canadians, the Liberals have chosen to side with big telecom companies, allowing them to charge more for these vital services.”

In its own Friday statement, TekSavvy said it was not only pulling out of the Department of Industry, Science, and Economic Development (ISED)’s upcoming spectrum auction, but would cancel plans to offer wireless services altogether. 

“Canada’s largest and most profitable telecom companies have successfully gamed the system with impunity. As competitors begin to exit the market, Canadian consumers will pay the price,” vice president of regulatory affairs Andy Kaplan-Myrth said in the statement.

VMedia’s statement pointed to the August 2020 statement from then-Innovation Minister Navdeep Bains, which while declining to send the August 2019 decision back to the CRTC, signalled that the government felt the 2019 rates were too low.

“This in itself was an unprecedented and politicized interference in an ongoing administrative process, issued while the CRTC was reviewing its own decision at the request of the dominant players,” the statement read. 

VMedia CEO Alexei Tchernobrivets went a step further. “The decision raises serious doubts about the leadership and competence of the CRTC, and the integrity of its process, and sells out Canadians to benefit the dominant players,” Tchernobrivets said in the statement. “CRTC Chairman Ian Scott should resign, and Parliament should launch an immediate investigation into this incoherent outcome and whether political and corporate influence impacted this decision.”

In a Friday statement Distributel Ltd. CEO Matt Stein also pointed to what he said was a shift at the commission.“The CRTC was designed to ensure we have a robust, thriving industry,” Stein stated. “But it’s becoming increasingly clear that they’ve abandoned that mandate, abandoned the government’s policy directive, abandoned the principles of competition…and they seem to have abandoned their post as Canada’s telecom regulator altogether.”

For National Bank analyst Adam Shine, Thursday’s rates decision, alongside the April decision to reject a broad-based mobile virtual network operator (MVNO) mandate, “we see a regulator and government that are supportive of facilities-based competition and seemingly easing off what appeared to be more aggressive rhetoric towards the industry and a harder posture on regulatory oversight,” according to a Thursday night note. 

RBC Capital Markets analyst Drew McReynolds, too, linked Thursday’s rates decision with the MVNO decision of a month ago. 

“Not unlike the recent CRTC wireless review decision,” he wrote in a Thursday night note, “this decision is further tangible evidence of full regulatory/government support for facilities-based competition in Canada with regulators in our view striking the right balance between reseller competition and the desire to have the private sector make sizeable FTTH/5G investments, including investments in rural broadband to address the digital divide in Canada.”

— Reporting by Michael Lee-Murphy at and editing by Jenna Cocullo at



UPDATED: CRTC reverts wholesale access rates to interim 2016 levels

The CRTC Thursday announced that it is setting permanent rates for third-party aggregated wholesale access to the level of interim rates established in 2016, before an August 2019 decision dramatically slashed the rates incumbent telecom companies were allowed to charge independent internet service providers (ISPs).

The 2019 rates never came into effect because of a Federal Court of Appeal stay.  

In reinstating the higher 2016 rates, the CRTC has done away with much of the retroactive payments that the 2019 decision would have — had it not been stayed by the courts — required incumbents to give to the smaller ISPs. There will be some retroactive payments to ISPs, flowing from the Thursday decision’s removal of a 10 per cent supplementary markup for incumbent local exchange carriers that was initially allowed under the 2016 decision. 

While it remains unclear just how much incumbents will have to pay in retroactive payments, it will be significantly lower than the windfall for ISPs expected under the 2019 decision. 

Effectively, the rates released by the CRTC Thursday are consistent with the rates currently charged to ISPs by incumbents, except for a slight reduction in some cases resulting from the removal of the 10 per cent markup. Apart from the removal of the supplementary markup, the decision largely undoes the three-year costing process that led to the 2019 rates. 

In deciding not to launch another review of the rates in light of errors in the original decision identified by the commission, the CRTC wrote that it “estimates that the majority of these rates would approach and be comparable to those currently in place on an interim basis, with some ILEC access rates exceeding the interim rates.” 

“In order to complete a fulsome revision to the cost studies, further information is required. This would result in prolonging the period of time without final aggregated wholesale HSA service rates in place, a situation that has already existed in the market for more than four years, by likely another year,” the CRTC wrote in the decision. 

The decision is another blow to competitive ISPs, who in April saw their ambitions for mandated broad-based mobile virtual network access dashed by another CRTC decision, which rejected their proposals in favour of a limited model that would see only regional players with spectrum assets able to avail of mandated access to incumbent wireless networks. 

For Competitive Network Operators of Canada (CNOC) chair and Distributel Communications Ltd. CEO Matt Stein, Thursday’s decision left him “absolutely shocked.”

“What an amazing flip-flop from the CRTC,” he said in a phone interview with The Wire Report, adding that he feels the decision “directly flies in the face of the 2019 policy direction.”

Stein, who praised the original 2019 decision as “fair” and “reasonable,” said that rates from member companies of CNOC would likely raise consumer prices following on from the decision. 

“Realization that rates like [the 2019 decision] aren’t coming — rates even halfway to that aren’t coming — is going to drive competitors to have to raise prices. No choice to raise prices, and probably immediately,” he said. 

BCE Inc., for its part, praised the decision in a statement from a spokesperson. “We’re pleased the CRTC has recognized the critical role that network builders play in connecting Canadians everywhere,” the spokesperson wrote in an email to The Wire Report. 

“It’s a positive decision that enables the major infrastructure investments Canada needs, including Bell’s accelerated capital plan to connect even more Canadians and help drive the country’s ongoing recovery, while also ensuring ongoing vigorous competition.”

In its own release, the CRTC said that the goal of the decision is to move toward the disaggregated regime, which has been stalled for the last several years. 

“Since 2016, the CRTC’s objective has been to complete the transition to a disaggregated wholesale model for access to the large companies’ high-speed broadband networks,” CRTC chair Ian Scott said in the release. 

“This model will foster greater competition and further investments, so that the industry can better serve the needs of Canadians. Today’s decision will allow us to focus on that goal, while providing certainty in the marketplace for Internet service providers.”

The CRTC’s Thursday decision was the last of the three challenges to the 2019 rates mounted by incumbents. The first, a court challenge, ended in defeat in both the Federal Court of Appeal and the Supreme Court of Canada. The second, a petition to cabinet, ended when then-Innovation Minister Navdeep Bains declined to send the decision back to the CRTC but said the 2019 rates were too low. Today’s decision marks the closing of the final outstanding process, though the decision is open to further court challenges. 

In a Thursday evening statement, Innovation Minister François-Philippe Champagne said that “wholesale broadband is a proven regulatory tool for enabling retail competition in the Internet service market. Setting the right wholesale rates is important to meeting our priorities when it comes to competition and the availability of high-quality networks for Canadians.”

“We will be reviewing the decision and its implications to ensure they align with our policy priorities of affordability, competition and innovation in the sector,” Champagne said. 

In an interview with The Wire Report Thursday evening following the release of the decision, Ian Scott rejected the notion that the decision forces competitor ISPs to raise rates. 

“We don’t regulate retail pricing on the internet. Providers decide what they will charge and what profit margin they’ll take,” Scott said. 

“The 2019 rates have never been in effect. So claims that say ‘as a result of the decision today, rates will rise’, are incorrect. One does not follow the other. What we established today are final wholesale rates, which is an input cost for those competitors, and they can and will judge themselves accordingly.” 

OpenMedia, on the other hand, in a release said the move was the “most anti-consumer decision on record.”

“It’s appalling to see that the CRTC has once again sided with Big Telecom. It’s clear they couldn’t care less about consumers, affordability, or small providers,” OpenMedia executive director Laura Tribe said in the release. 

— Reporting by Michael Lee-Murphy at and editing by Hannah Daley at 

GoldTV blocking order survives TekSavvy appeal

The Federal Court of Appeal has allowed Canada’s first-ever site-blocking court order to stand, dismissing an appeal of the order from TekSavvy Solutions Inc.

In a Wednesday decision, Justice George Locke, writing on behalf of the three-judge panel, said that he was not swayed by TekSavvy’s argument — made during a two-day hearing in March — that site-blocking is not an available remedy under the Copyright Act. 

“In my view,” Locke wrote, “nothing in sections 41.25 to 41.27 of the Copyright Act suggests an intention to deny copyright owners the benefit of a site-blocking order, and nothing in such an order conflicts with these provisions.”

“The fact that Parliament has put in place a regime to notify an alleged copyright infringer that its activities have come to the attention of the copyright owner does not suggest that this represents a limit on the remedies to which the copyright owner is entitled,” he added, referring to the so-called notice-and-notice regime

The site-blocking order was originally sought by a consortium of rights-holding companies, including BCE Inc., Rogers Communications Inc., Quebecor Inc., and granted in November 2019. The order required a number of internet service providers (ISPs) to block an anonymously-operated “pirate IPTV” service known as GoldTV and marked the first time a Canadian court has ordered internet service providers (ISPs) to block content. 

“Many Canadians will be disappointed by today’s ruling,” Canadian Internet Registration Authority president and CEO Byron Holland said in a release. CIRA had intervened in TekSavvy’s appeal of the order. 

“While it is important to underline that the court did not open the door for ISPs to block of their own volition, we believe fundamentally that there are more proportionate responses to copyright infringement than the GoldTV precedent prescribes,” Holland wrote. “Instead of ordering site-blocking at the telco level, with all of the risk that could carry for net neutrality, there are control points closer and more relevant to the act of infringement that should first be looked to.” 

Justice Locke also declined to delve into an analysis of the impact of the order on rights under the Canadian Charter of Rights and Freedoms, other than to write that he was content that the lower court had considered the rights sufficiently. 

“In my view, it is not necessary to decide whether the Charter is engaged and, if so, whether freedom of expression is infringed,” Locke wrote. “In considering the issue of freedom of expression in the context of a particular equitable remedy, it was not necessary for the [lower court] Judge to engage in a detailed Charter rights analysis separate and distinct from the balance of convenience analysis that is already to be considered.” 

TekSavvy’s vice-president regulatory affairs Andy Kaplan-Myrth said in a phone interview with the Wire Report that the company is “disappointed,” and that the decision “feels like it is very limited in the way that it very strictly just considers whether the original decision could be reviewed.” TekSavvy is still deciding whether or not it will appeal the case further, he added. 

Kaplan-Myrth said that any site-blocking regime “needs to consider all the relevant rights — user rights and rights holders rights — and the nature of the internet, technological issues of what ISPs are capable of doing and how effective those measures would be against users trying to circumvent it or accidentally circumventing it.” 

“You need to balance those considerations, including principles of network neutrality and legal rights like free expression, and the court has really never been best-placed to do that. The right place to do that is a statutory regime.” 

The government is itself currently consulting on whether or not it should allow internet service providers to unilaterally block certain websites from users in order to protect copyright holders. Kaplan-Myrth said that the Wednesday decision upholding the blocking order may dissuade the government from pursuing a legislative framework. 

“It’s exactly the opposite. We can’t get stuck with this ad-hoc regime. It’s actually all the more reason why we need the government to step in and create something that will work better,” he said. 

Indeed, an internal Innovation, Science and Economic Development (ISED) 2019 memo obtained last month by the website showed that ISED officials felt that “should the decision hold on appeal, the GoldTV website blocking order will reduce some of the pressure to provide additional tools in Canada’s marketplace frameworks to combat online piracy.” 

— Reporting by Michael Lee-Murphy at and editing by Hannah Daley at