Internet prices in Canada have steadily increased since the CRTC’s 2019 wholesale rate decision: report

Consulting firm Wall Communications recently released its report commissioned by the federal government annual report on Canadian telecommunications for 2022, revealing that internet prices in the country have steadily and significantly increased since 2019.

Internet prices have increased in nearly all “baskets,” which are Wall’s categories of Internet connections based on download speeds and data allowances offered. Tier 5, which includes connections offering speeds of 101 to 250 Mbps, saw the biggest price increase at 13.4%.

Only one basket of services actually saw a price drop – Tier 2 connections (10-15 Mbps) were 5.6% cheaper in 2021 than in 2019.

That said, Tier 2 includes relatively low-speed packages with few subscribers. In 2020, nearly 50% of Canadian Internet subscribers paid for plans with advertised speeds of at least 100 Mbps.

Internet prices in Canada were actually on a downward trend at the start of 2019, but started to increase thereafter. According The Toronto Starcritics attribute the reversal of internet and wireless rates in Canada to the failure of the Canadian Radio-television and Telecommunications Commission (CRTC) to implement lower wholesale internet rates in 2019.

Wholesale Internet prices represent what smaller Internet Service Providers in Canada pay national players like Bell and Rogers to use their network infrastructure.

In 2019, Canada’s telecommunications and broadcasting regulator lowered wholesale rates, by extension lowering retail internet prices. However, the decision has been (controversially) appealed by larger telecommunications companies like Bell. The CRTC suspended its decision and last year raised wholesale internet prices to 2016 levels.

“The price decline in 2019 and the price increases since then are a direct result of that pricing decision, then the uncertainty, and now the higher pricing we have in place,” said Andy Kaplan-Myrth, vice -President of Regulatory Affairs at TekSavvy. , one of Canada’s largest independent Internet Service Providers (ISPs).

“Smaller competitors were losing market share from 2020, and at the same time home internet prices were rising. There is a direct correlation between the two,” said CORC chief executive Geoff White. .

TekSavvy and other ISPs like Distributel challenged the CRTC’s decision to reverse wholesale Internet rates, but ultimately failed. The Federal Cabinet decided to keep wholesale internet rates higher in May.

Ottawa, meanwhile, has proposed a new policy direction to the CRTC alongside its May ruling that it says will help spur competition in the telecom space and ultimately lower internet prices. in Canada.

“The government’s proposed new policy direction to the CRTC would require the commission to put in place new rules to improve competition and advance consumer rights, resulting in lower prices and better telecommunications services for Canadian consumers. said ISED spokesperson Hans Parmar.

According to the Wall Communications report, Canadian internet prices were also higher or at least close to the top prices in international service bundle comparisons.