TekSavvy increases internet prices $3, lays blame on CRTC

TekSavvy says the CRTC's wholesale rates decision is the reason for the price hike

TekSavvy price increase blog

Chatham, Ontario-based internet service provider (ISP) TekSavvy announced residential internet customers will see a $3 price increase starting on the October billing cycle.

TekSavvy sent out an email blast to customers and shared a blog post detailing the motives behind the increase, which the company blames on the Canadian Radio-television and Telecommunications Commission CRTC).

“To be clear, we do not want to institute this increase and would much rather lower prices, as we have done in the past. But we have been left with no choice thanks to recent reversals by a regulator that is now clearly siding with and padding the profits of Big Telecom – the CRTC,” the company wrote in the blog.

The majority of the blog post focuses on the CRTC’s recent wholesale rates decision, which reversed the August 2019 decision that would have lowered wholesale rates. As a refresher, wholesale rates are the cost that smaller ISPs like TekSavvy pay to incumbents like Rogers or Bell to gain access to their network. The CRTC mandates wholesale rates and determined in August 2019 that the interim rates were too high.

In the August 2019 decision, the CRTC found that incumbents had overstated the cost of maintaining networks to inflate the wholesale rates. It set new, lower rates that would apply retroactively, which meant incumbents would have to pay back the difference. It’s also worth noting that following the decision, TekSavvy filed a complaint with the Competition Bureau accusing Bell and Rogers of offering prices that undercut the wholesale rates to steal customers.

The incumbents responded to the CRTC decision by appealing it through multiple avenues, including the court and the CRTC. Although the Federal Court of Appeal dismissed the incumbents’ appeals, the CRTC issued a stay on the order until it finished a review. In May 2021, the CRTC reversed the 2019 decision and returned to the previous rates.

Critics have called the reversal anti-consumer, and TekSavvy led a charge petitioning for the removal of CRTC chairperson Ian Scott over accusations of bias. Additionally, the Chatham-based ISP cited the reversal as the main reason it dropped out of the recent 3,500MHz spectrum auction.

However, TekSavvy also raised internet prices by $5 or $10 (depending on the plan) roughly a year ago. When the company raised prices in August 2020, it also blamed the ongoing wholesale rates debacle, at the time laying the blame on a Cabinet statement that sided with the big telecom companies. In September 2019, TekSavvy offered discounts to several customers following the CRTC’s August 2019 ruling.

Source: TekSavvy