Question Period Note: TELECOMMUNICATIONS – Lobbying by large telcos

What is the Government of Canada response to critics suggesting that the CRTC decision on wholesale internet rates was influenced by the lobbying of large telcos?

• Canadians are relying on telecommunications services for work, school, finances and health care – making access to high quality and affordable wireless services absolutely essential.

• It is standard practice for ministers and staff to engage with stakeholders an advocates across sectors of the economy.

• Meeting with companies to convey the government’s desire for greater affordability, connectivity, and innovation in the telecommunications sector, and to hear their feedback on these efforts, is not only appropriate but should be expected.

• These companies, in addition to being internet service providers, are involved in a variety of lines of business which are federally regulated or heavily impacted by federal policy.

SUPPLEMENTARY MESSAGES

• The government has been clear that greater affordability, competition, and innovation in the Canadian telecommunications sector is important.

• Given that the decision is subject to appeal, we cannot comment further on the CRTC’s decision on wholesale access rates.

Meeting with telecommunications companies

Meeting with company representatives is a regular part of government business including for telecommunications. This is an important sector for the economy and meetings occur with companies of all sizes and perspectives. These companies also are typically in interested in a range of policy issues since they have various lines of business that are federally regulated or otherwise impacted by federal policy. There were also ongoing discussions during the COVID-19 pandemic, given the importance of connectivity.

CRTC wholesale rates decision and previous appeals

On May 27, 2021, the CRTC concluded its review of its August 2019 wholesale rates decision. The CRTC decision in question would have significantly lowered the rates that incumbents were permitted to charge smaller competitors for wholesale services. In its new decision, the CRTC decided that the rates in effect since 2016 would become final, with minor changes to the rates for the incumbent telephone companies. The CRTC’s rationale for their decision stated that correcting the errors that led to the 2019 rates would take considerable time and resources and likely result in rates similar to the 2016 rates. In order to reduce regulatory and market uncertainty, the CRTC decided to finalize the 2016 rates and focus their resources on moving the regulatory framework from the current aggregated model – which is to be phased out – to the future disaggregated model.

This May 2021 decision by the CRTC concludes the third avenue of appeal. The courts had previously examined the matter on narrow grounds of law or jurisdiction. In August 2020, the Governor in Council issued determinations that the 2019 rates in certain cases did not balance policy objectives and would undermine investment.

Update on petitions received

The government has received one petition regarding the CRTC’s most recent decision. It is possible that further petition(s) could be received. The deadline to file is August 25, 2021.

None