You may have seen a campaign being led by various groups saying the CRTC made a big mistake developing its wholesale internet rates. It did. And in fact, the CRTC itself agrees that its wholesale rates decision had errors. That is why it corrected its mistake in May 2021.
The Commission’s 2019 Decision would have transferred hundreds of millions of dollars into the pockets of a handful of owners of resale-based internet service providers, without delivering meaningful measures to advance affordability or improve internet access for Canadians. The 2019 rates determination was flawed.
That is why the federal government made it very clear that the 2019 Decision could not stand, when Cabinet said the CRTC’s rates “may undermine investment in high-quality networks, particularly in rural and remote areas” and the retroactive payments “must be balanced so as not to stifle network investments”.
The CRTC’s May 2021 determination to reset the wholesale rates acknowledged the August 2020 statement from Cabinet (the Governor in Council). The Commission said “The Governor in Council also determined that exercising its authority under subsection 12(1) of the Act to vary or refer back the order to the Commission for reconsideration at that time would be premature, pending a decision from the Commission with respect to the review and vary applications.”
Of course, you would never know that from TekSavvy’s filing with the Federal Court of Appeal for Leave to Appeal the May 2021 decision. Of the petition to the Governor in Council, Teksavvy simply said “the petition was denied”, as though it was summarily dismissed: “the Governor in Council declined to vary, rescind, or refer it back.” TekSavvy failed to disclose to the Court the clear statements made by Cabinet that there were real concerns about the CRTC’s 2019 rates decision.
In fact, Cabinet’s “denial” of the petition led TekSavvy to publicly proclaim (in August 2020) “In a statement, the federal Cabinet effectively directed the CRTC to increase wholesale rates — above the rates independently set by the CRTC in 2019”. The headline on the press release read “Cabinet decision means higher prices, less competition for Internet services”. So much for telling the Court that “the petition was denied”.
Last summer’s clear statement from Cabinet may seem so long ago, but it should hardly have been a surprise to see the CRTC’s reversal of its 2019 decision. ISPs like TekSavvy had already raised consumer prices last August to accommodate the wholesale rate changes. The CRTC finalized those charges. Where is the “surprise”?
Disinformation is also being disbursed through active lobbying, somehow convincing rural members of parliament that increases to wholesale rates somehow “makes the growth of competition less likely in areas that require better service and even in those areas that are currently not serviced.”
Let’s be perfectly clear. The CRTC’s May 2021 decision improves the business case for rural broadband, meaning: (1) investment has been accelerated; (2) there is a lower requirement for broadband subsidies; and as a result, more households will get better service sooner.
Why is the CRTC Chair the singular target of corporate-sponsored venomous online attacks, OpEds, and social media campaigns?
Former CRTC Vice-chair and Acting Chair Michel Arpin reacted, saying: “The decision was unanimous, no dissent by a group of 9 members. A fair number of these members have a telecom background particularly the two vice chairs who are long time civil servants having spent a major part of their career in telecommunications. So stop accusing Ian Scott.”
Take a minute to unpack that statement. The CRTC’s May 2021 Decision, reversing the 2019 rates, was issued with no dissenting opinions. At the end of the day, under CRTC rules, the Chair only has one vote. So the May Decision represents the decision of the Commission, not just the Chair.
A comment on this blog last week from a former Director General at Industry Canada said:
Calling for the firing of the Chair because one is not happy with a decision is totally inappropriate. What is the point of having an independent regulator if that regulator could be fired whenever a disaffected party could convince the government to do so? Who would ever take the position of Chair with that spectre hanging over them? This would terribly influence decision-making in the worst possible way. Calling for the firing of the Chair does great insult to carefully crafted institutional arrangements and reflects badly on those who make such a call. As you mention there are more than adequate established means of seeking redress if one believes the regulator has erred. Populism has no place in the administration of fair regulation.
Populism has no place in the administration of fair regulation.