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Company says it has no choice but to increase prices
TORONTO – August 20, 2020: Dismayed by the Federal Cabinet’s pronouncement on Saturday in response to the large telecom companies’ lobbying efforts, Distributel Communications Limited says it will be forced to add a temporary surcharge to its internet rates.
“Our company is built on affordability and access for all Canadians,” said Matt Stein, CEO of Distributel. “Internet service is more essential today than ever, and the idea of charging more for it runs completely counter to our values. But unfortunately, given the uncertainty and delay that the Federal Cabinet’s announcement has created, we don’t have a choice.”
The company has worked to minimize impacts but says most customers should expect a $5 to $10 surcharge to their monthly price. The additional fee will need to be in place at least until a final order comes down for wholesale internet rates, which are what the incumbent telecom companies charge independent internet service providers (ISPs) to access certain components of their networks—costs that affect consumer prices directly.
In August 2019, the CRTC released the results of a three-year review of those rates, in which it ruled that they are too high, ordering that they be lowered and that years of overcharging be repaid. When the ruling came out, Distributel immediately lowered prices, assuming the new wholesale rates would come into effect—but they didn’t.
Instead, a long period of delay ensued, as the incumbents (Bell, Rogers, and others) took multiple avenues to challenge the decision—asking the CRTC to review it, appealing it to the Federal Court of Appeals, and, finally, asking the Federal Cabinet to overturn it. In Saturday’s announcement the Federal Cabinet released its response to the latter request: While it declined to overturn the CRTC decision, Cabinet did take the opportunity to comment, without presenting any new evidence, that the rates ordered in the original CRTC ruling might be too low and could stifle investment in network expansion.
“The government could have simply allowed the CRTC to proceed with its own review, but by inserting this extra commentary, it’s created more confusion and uncertainty. What’s more, this runs counter to the government’s campaign promises of making life more affordable and helping working Canadians get ahead. Keeping prices high is simply bad for Canadians.”
When the COVID-19 pandemic struck, Distributel shifted to unlimited access for all customers, to support Canadians as they abruptly adjusted to working and learning from home. But, says Stein, while the company no longer charges by usage, it still pays that way to the incumbents. “And usage is skyrocketing. As long as the wholesale rates the CRTC deemed to be fair are not implemented, our costs will continue to rise.”
“Adding fees is the last thing we want to do. But this is unavoidable given our growing and immense cost pressures, and the additional uncertainty from the Federal Cabinet’s announcement. This is a bad day for Canadian consumers.”
Established in 1988, Distributel is a national, award-winning, independent communications provider offering a wide range of business and residential communications services. In 2020, the company proudly achieved certification as a Great Place to Work®, and it has also earned recognition for its progressive, collaborative workplace. 100% Canadian-owned, with offices across the country and a national network, Distributel continues to forge new partnerships and bring innovative solutions to market directly and through a thriving wholesale division. ThinkTel, the Business Services Division of Distributel, is a provider of advanced voice and data services for the SMB and Enterprise markets throughout Canada. The company offers TV services through TotalTV Inc., an IPTV service provider that operates in Ontario and Quebec. As a top Microsoft Solutions Partner and a Cisco PMP, the Business Services division is focused on driving industry innovation. For more information, visit: www.distributel.ca.
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