CRTC ruling: Internet Access is a Social Right

by Barry Weisleder

The Canadian Radio and Television Commission ruled on December 23 that high-speed Internet is now a basic service — as essential to our lives as the telephone. From now on, all Canadians must have access to reliable, world-class mobile and residential Internet services.

This is Big Telecom’s worst nightmare. The CRTC just ordered them to extend full service to every part of the country. This is a shake-up in the world of internet, a big departure from the status quo.

Rogers Communications Inc., BCE Inc. and Telus Corp. are not accustomed to being told what to do. They are used to enjoying huge profits, and to using their economic clout to crush competition. The Big Three incumbent wireless providers cashed in by muscling out new entrants, like Wind and Mobilicity, by charging prohibitively high rates to use their infrastructure, the Canadian Competition Bureau charged.

Patrick Hughes, senior economist with the independent enforcement agency, said the out-sized returns the incumbent carriers are making from their wireless divisions are evidence that the market is distorted. If new entrants that rely on the incumbents’ towers and networks have to pay exorbitant costs to use that infrastructure, that cost will get passed on to consumers, he said.

There’s no doubt Big Telecom is already scrambling to overturn the latest win for working class consumers. As surely as night follows day, there will be court challenges, intense lobbying, and temper tantrums.

Meanwhile, here’s what the CRTC ruling means:

  • Universal access to mobile and residential Internet.
  • Packages with unlimited data.
  • Funding support for rural and remote communities.
  • World-class Internet speeds. 50 up. 10 down.
    Minimum quality guarantees for your Internet.

Now, before you pop a champagne cork, there is still a major problem to be addressed: lack of access to high-speed internet for low-income people. According to Statistics Canada, only 58 per cent of Canadian households with annual incomes of $30,000 or less have home internet access, compared to 98 per cent of households with annual incomes of $120,000 or more. Can the telecoms afford to reduce rates?

Award-winning journalist Peter Nowak, in a November 2013 article titled “The Country Most Gouged By Telecom Companies? Canada”, wrote:

“With a margin of 45.9 per cent, Canadian carriers come in at the high end of the most profitable list. They’re seven per cent more profitable than their American and European counterparts and five per cent more than the developed world.

Even more interesting is the fact that Canadian carriers had the third-highest year-over-year growth in margins. Combined with ARPU growth, it’s clear that business is good in Canada. Incumbent carriers may have experienced a temporary hiccup thanks to new entrants such as Wind and Mobilicity, but things are obviously getting back to normal.

It’s hard if not impossible to look at these key metrics and come to any conclusion other than Canadian wireless carriers are some of the most profitable around based on unmatched monthly revenues, which are coming directly out of consumers’ pockets.”

It took two years of campaigning, nearly 50,000 people speaking out, multiple policy submissions to the CRTC, and scores of media appearances to persuade the CRTC to impose the new conditions on the telecommunications giants.
But it begs the question: if internet and telephone service are a social right, and if the industry is an oligopoly in Canada, and if the dominant players operate in a systematically anti-social manner, gouging their internet and cable TV customers, why not just nationalize the Big Telecoms? Why not direct the industry to serve the interests of the vast majority, under the control of its workers and the communities they serve, and plough the profits back into vital public services?