CRTC finalizes wholesale rates for independent service providers
OTTAWA-GATINEAU, February 21, 2013 — Today, the Canadian Radio-television and Telecommunications Commission (CRTC) established final rates for the wholesale high-speed access services used by independent service providers to offer competitively priced Internet and other services. As a result of certain adjustments, some independent service providers will see significant reductions in the wholesale rates they pay.
"Large and small independent service providers now have the certainty they need to continue offering Canadians a choice of innovative and competitive services," said Jean-Pierre Blais, Chairman of the CRTC. "We are pleased to finally close this chapter after a careful examination of the wholesale rates, which included a review of the costing information."
All large telephone and cable companies that provide wholesale high-speed access services to independent service providers must now use a single billing model and offer the same rates for business and residential end-users. This will result in a more straightforward billing process for independent service providers. Previously, certain large companies charged different rates under different billing models for wholesale and residential business services.
The final wholesale rates are based on the large telephone and cable companies' costs, plus a reasonable markup. The rates enable large companies to recover their costs and make further investments in their networks.
Today's decisions apply only to the wholesale high-speed access services the large telephone and cable companies sell to independent service providers. The CRTC does not approve the rates and packages for Internet services offered to Canadian consumers at the retail level. The CRTC expects, however, that the final wholesale rates will have a favourable impact on prices charged in the competitive retail market.
The CRTC is an administrative tribunal that regulates and supervises broadcasting and telecommunications in Canada.
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These documents are available in alternative format upon request.
Additional information on wholesale high-speed access services
In the late 1990s, the Canadian Radio-television and Telecommunications Commission (CRTC) decided that it would not intervene in Internet services. There was enough competition to give Canadians choice. Internet service providers set the rates paid by consumers, as well as other terms and conditions, without having to obtain the CRTC’s approval.
With the introduction of high-speed Internet services, the CRTC required large telephone and cable companies to sell access to their networks to independent service providers on a wholesale basis. Independent service providers use these services, known as wholesale high-speed access services, to offer Internet and other services to their own retail customers. This decision was taken to encourage further competition and choice for Canadians. By the end of 2011, independent service providers had more than 700,000 high-speed residential Internet subscribers, or nearly 7 per cent of the market.
In 2011, the CRTC launched a public consultation to review how the large companies should charge independent service providers for the use of their networks. Further to this consultation, the CRTC selected two wholesale billing models—the capacity-based and flat-rate models—that give independent service providers the flexibility to develop innovative packages and pricing plans. At the same time, these models allow the large companies to recover their costs and continue to invest in their networks.
Since then, several large companies and independent service providers have asked the CRTC to review the wholesale rates associated with these billing models. Some wholesale rates were implemented on an interim basis while the CRTC considered these requests.
The CRTC has now finalized the rates for wholesale high-speed access services.
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