London, Ontario-based internet provider Start.ca hiked its internet subscription costs yesterday in response to the recent changes to CRTC’s wholesale internet rates.
The company increased the cost of its internet packages for new subscribers and is planning on raising $5 to $10 for its current subscribers. Affected customers will be notified about the price adjustment 30 days in advance.
Peter Rocca, CEO of Start.ca, said that this is the first time the company has raised its prices in 25 years.
“Today, we have had to update our pricing and options to reflect the reality that it has been over a year that we’ve been paying the old rates while offering our services modelled on the new rates which have yet to materialize,” said Rocca in the press release.
Start.ca isn’t alone in raising prices. TekSavvy, another independent ISP, also notified its customers of a price increase this week–the second time this year. Similar to Start.ca, TekSavvy also blamed the uncertainty around CRTC’s new wholesale pricing.
When asked whether facility-based ISPs are using reduced network investment as threats to influence the rates decision, Rocca wasn’t surprised.
“This is a pretty tried and true response that the incumbents have every time there’s any kind of threat to competition, the threat of investment comes out,” said Rocca in an interview with IT World Canada. “It just hasn’t played out that way. These incumbents are telling the commission in the public opinion that these investments are going to be jeopardized. Well, at the same time, they’re lining up for broadband funds, and making these investments regardless.”
In Bell’s petition submitted to the cabinet earlier this year, Bell noted a significant infrastructure investment gap between facility-based ISPs and independent ISPs. According to the petition, between 2012 and 2017, facility-based ISPs invested almost $35 billion in infrastructure, whereas independent ISPs only invested $16o million.
But Rocca disagreed and argued that when expressed as a percentage of revenue, independent ISPs invest the same, if not more, than the incumbents.
“We certainly are investing as much, if not more,” said Rocca. “Additionally, a piece that the incumbents love to leave out is the hundreds of millions of dollars that they receive every year from the independents is going to fund those investments that they’re making.”
Rocca said in the release that Start.ca would reverse the price increase if CRTC’s originally proposed rate passes.
Although the CRTC’s rates are still rife with debate, some telecom experts disagree with independent ISPs’ recent price changes.
“Last August (2019) #CRTC issued a decision that EVERYONE knew would be appealed; it called for a third of a billion dollars in windfall payments to smaller ISPs,” wrote telecom consultant Mark Goldberg in a tweet. “Knowing it would be appealed, many ISPs dropped prices before their costs dropped, in an unsustainable move. Yesterday’s price increase wasn’t caused by changes to wholesale rates; they’re unchanged in 4 years. If anything, it appears rates were dropped last Fall in a cynical attempt to use subscribers as pawns in a political appeal.”
