CRTC sticking with current wholesale internet rate approach with slight changes
Global News
Most of Canada's larger carriers had argued for reforms, saying the traditional wholesale rate-setting method has resulted in competitors paying them less than the break-even cost.
The federal telecommunications regulator is sticking with the way it sets prices for smaller companies that buy access to large carriers’ internet networks.
Following a review, the Canadian Radio-television and Telecommunications Commission says that the best way to promote competition is the current approach in which it sets rates for wholesalers, such as TekSavvy, based on the service and infrastructure costs to the major players, plus a markup.
Most of Canada’s larger carriers had argued for reforms, saying the traditional wholesale rate-setting method has resulted in competitors paying them less than the break-even cost.
They instead wanted to bring in commercial negotiations as the method for setting the majority of wholesale service rates, saying that model would provide greater opportunity to meet competitor-specific needs while minimizing unnecessary regulation.
The CRTC described its current approach as “forward-looking, which results in rates that reflect expected market conditions, including the technology used, over a period of time.”
“Once final rates are set, generally for a five-year period, they typically remain constant, barring any changes in the market,” it said in its decision published Friday.
“This provides regulatory certainty for all parties when planning their respective strategies.”
But the CRTC said it will work to improve its current approach, with adjustments such as considering market rates and other relevant information. To do so, it directed carriers to provide market-level information when submitting rate-setting applications for any new or existing services.