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Distributel says decision unequivocally puts incumbent shareholders ahead of Canadians
TORONTO – May 27, 2021: Distributel Communications Limited is shocked and dismayed with the Canadian Radio-television and Telecommunications Commissions (CRTC)’s decision to overturn its own 2019 ruling on wholesale internet pricing.
“This is a terrible day for Canadians,” says Matt Stein, CEO of Distributel. “And it couldn’t come at a worse time. Affordable internet access has never been more important given the country’s economic challenges and Canadians’ continued reality of working, learning and connecting from home due to the pandemic. We had expected the CRTC to stand by its 2019 ruling and stand strong for Canadians; instead, today’s decision ensures Canadians will see their internet rates continue to rise, when they already pay some of the highest prices in the developed world.”
The 2019 CRTC decision was based on six years of thoughtful research, consultation and investigation. It was well-thought-out, thoroughly discussed, and carefully balanced. Retracting that decision negates that entire process, says Stein, which sends a very unsettling message to the market and to Canadians. “The CRTC was designed to ensure we have a robust, thriving industry,” he continues. “But it’s becoming increasingly clear that they’ve abandoned that mandate, abandoned the government’s policy directive, abandoned the principles of competition…and they seem to have abandoned their post as Canada’s telecom regulator altogether.”
“To spend so much time on this decision, go to such lengths to do such a thorough job, only to wind up seemingly bowing to lobbyist pressure and rejecting the whole thing… it’s just incomprehensible. Not to mention that it took an extra two years to come to this new arbitrary decision, extending uncertainty, and further delaying the innovation and choice that Canadians deserve.”
Stein says the entire system needs to be rethought, noting that the length of time between submissions and decisions always seems to extend well beyond the relevance of the original decision.
The CRTC, he says, is demonstrating an inability to handle this kind of decision in a fair, balanced and timely way.
Stein notes a further concern that the decision is not consistent with the direction provided to the CRTC by the Liberal government to ensure innovation and competition in telecom—nor to its promise to Canadians to make telecom services more affordable. The CRTC has seemingly turned its back on those promises, he says, discarding the government’s policy directive entirely and disregarding Canadians’ best interests. Distributel hopes the government will step in and ensure its promises are fulfilled.
Stein says this is yet another example of how the competitive internet service providers like Distributel—independent businesses who are committed to providing choice, fairness, competition and affordability—continually see their efforts thwarted because of the tactics of the country’s largest, richest corporations.
“This is a major disappointment for our customers and for our company, which has long fought hard to bring better, more innovative services to Canadian consumers,” he says. “This decision is only good for one group of people: the incumbents and their shareholders.” He says this outcome amplifies the imbalance in Canadian telecom and leaves Distributel extremely concerned for the future of the industry.
The 2019 ruling clearly established that the incumbent carriers had broken the CRTC’s rate-setting rules by inflating their costs, which meant the independent internet providers had been paying far too much to access the incumbents’ networks, resulting in higher retail prices passed on to consumers. The ruling ordered that the rates be lowered and for the incumbents to pay the independents back for years of overcharging. This announcement instead reverts rates back to far higher 2015 levels and dramatically reduces the repayment requirements.
Stein says the company is reviewing the options available to it at this point, and assessing which ones it will pursue in its continued push for fairness, affordability, choice and competition on behalf of Canadians. “We won’t stop fighting for what’s right,” he says. “It’s what we always do. We stand up to the status quo, and fight for what we believe in: choice, fairness, and value for Canadians.”
Established in 1988, Distributel is a national, award-winning, independent communications provider offering a wide range of consumer, business and wholesale communications services. In 2020, the company proudly achieved certification as a Great Place to Work®, earning recognition for its progressive, collaborative workplace. 100% Canadian-owned, with offices across the country and a national network, Distributel is focused on providing choice and value to Canadians. With the recent acquisition of Primus Telecommunications, the company is even better positioned to offer solutions to consumers and businesses of all sizes. Distributel offers high speed internet, TV, mobile and home phone products through its consumer brands. It delivers business solutions through the Primus and ThinkTel brands as a provider of advanced voice and data offerings for the SMB and Enterprise markets throughout Canada. The company also forges new partnerships and brings innovative services to the wholesale market. For more information, visit www.distributel.ca.
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