As an alternative Internet provider, TekSavvy has pushed for public pressure on Ottawa to make changes that would effectively lower consumers’ bills.
Such is the Canadian wireless and telecom landscape that one company — a smaller, yet growing one — is spearheading the latest effort to get the CRTC (Canadian Radio-television and Telecommunications Commission) to make it more competitive against established incumbents.
We’ve been down this road before. The “Big 3,” as Rogers, Bell and Telus are often lumped together, account for 90 per cent of the mobile market. Along with Shaw and Quebecor, the five account for over two-thirds of home Internet customers. The CRTC’s latest report covering the country’s mobile market paints a picture of cartels that have, more or less, carved out the market in three almost-equal fiefdoms.
That kind of market domination is what TekSavvy says it’s been fighting against from the start. The company’s marketing has long echoed that narrative, positioning itself as a bastion of independence. But it’s also highly dependent on the infrastructure incumbents have built because it has to buy high-speed bandwidth from them at wholesale rates. TekSavvy then offers service to their customers at their own retail prices.
Independent ISPs (Internet service providers) have complained for years that the Big 3 don’t play fair under these conditions. Despite the CRTC setting out rules in 2015 to provide smaller providers access to the incumbents’ fibre networks, they allegedly overcharged them to the tune of $300 million. Without the CRTC mandating set rates, smaller providers have accused the bigger ones of abusing the process. Not only that, but there doesn’t appear to be any official penalty obligating the Big 3 to pay any money back.
Wireless market scrutiny
In March, the federal government tasked the CRTC with reviewing the mobile wireless market to determine “whether further action is required to improve choice and affordability for Canadians.”
To spur public activism, TekSavvy launched a website called PayLesstoConnect.ca where participants could automatically contact their local MP (Member of Parliament) with a prewritten note demanding such action. Over 70,000 Canadians reportedly took part.
Its contention is that government regulators should open up the wireless market to MVNOs (Mobile Virtual Network Operators) — basically smaller providers who would buy network access wholesale to resell to consumers at their own prices. It’s the mobile equivalent of what TekSavvy and other ISPs already do now with home Internet.
“Since 2006, the CRTC has made telecom policies under a Policy Direction developed under then-Minister (Maxime) Bernier, which required reliance on market forces and minimal regulation,” said Janet Lo, VP, Privacy and Consumer Legal Affairs. “But the 2006 Policy Direction led to more regulatory gaming, and less competitive markets — with the result of harming consumers and competition.”
The current campaign’s goal is to replace the 2006 Policy Direction with the new proposed government directive. Regulators will look at the market’s overall competitiveness, assess the inclusion of MVNOs and also look at future deployment, particularly as it relates to 5G network infrastructure.
Industry consultation for the directive is over, but it doesn’t look like anything will happen before the upcoming federal election in October. A public hearing is currently scheduled for January 13, 2020 in Gatineau, Quebec.
Even so, the CRTC is still accepting comments and feedback from the public. Those wanting to weigh in with their own two cents are encouraged to do so here. All comments and suggestions must be submitted by May 15, 2019.
TekSavvy is pushing this because it has a vested interest in becoming an MVNO itself. Much like its existing business model for home Internet — and now TV — the Ontario-based provider believes it can do the same for wireless customers.
“If the CRTC allows real consumer choice for wireless by allowing MVNOs, TekSavvy wants to be able to offer wireless service options for Canadians,” said Lo. “TekSavvy fought for and won the right to offer unlimited Internet to Canadians who were trapped paying for metered ‘usage,’ and now wants to be able to bring unlimited cell phone plans to Canadians too.”
There is precedent for both south of the border. MVNOs operate in the United States, largely as small regional carriers offering more affordable plans. Currently, dozens of them are active, though even incumbent carriers, like AT&T and T-Mobile offer unlimited data plans to their customers. They may throttle the connections at peak times, however.
The more consumer-friendly orientation for the new directive could also depend on election results. The current Liberal government waited until an election year to push this forward, and it’s unclear whether other parties, should they win, maintain the same level of pressure on the CRTC to act decisively.