Government of Canada announces final policy direction to the CRTC to improve competition in the telecom sector

Innovation, Science and Economic Development Canada (ISED) has finalized the policy direction to the Canadian Radio-television and Telecommunications Commission (CRTC), proposed last summer to enhance competition in the telecom sector.

Today’s announcement legally binds the CRTC, under the Telecommunications Act, to translate the final policy direction into detailed regulations. 

The new policy direction also rescinds the 2006 policy direction which included language that the CRTC should rely on market forces when implementing the Telecommunications Act. Instead it builds on the 2019 direction on competition, affordability, consumer rights, and innovation.

“Access to affordable and reliable Internet and wireless services is critical in today’s society and economy. This is why our government is using every tool at our disposal to ensure that telecom services are competitive, reliable and, above all, affordable,” said Industry Minister François-Philippe Champagne.

“In general, smaller telecom service providers supported the proposed direction, but wanted the government to make it more prescriptive. Some improvements were made to make it more clear,” said Andre Arbour, director general of telecommunications and internet policy at ISED. “Several of the large telecom service providers opposed much of the direction. The government disagrees with those views, and it’s moving forward with measures to advance competition and consumer interests.”

Arbour also stressed that the new policy direction is outcome-oriented, and does not go into the details of CRTC’s rules. “The direction strikes a balance between providing clear direction to the CRTC on the objectives that matter for Canadians, while still leaving a fair bit of leeway for the CRTC to interpret those instructions into its ongoing activities.”

The new policy direction to the CRTC aims to:

  1. Enhance wholesale Internet access and competition for more affordable Internet by;

– requiring large companies to give access to competitors at regulated rates so they can offer lower prices and more choices to Canadians. The CRTC should take action to improve availability of more timely and improved wholesale rates

– The existing model of service, called the aggregated model of service, that the smaller companies relied on had been slated to be phased out by the CRTC. The direction states that this model must remain in place. 

– Require large companies to make the speeds that Canadians are demanding available to competitors.

– CRTC should ensure that wholesale Internet access is available evenly across the market, including on fibre-to-the-home networks.

2. Increase mobile wireless competition for more affordable cell phone plans by

– directing the CRTC to improve its hybrid mobile virtual network operator (MVNO) model (in which a wireless communications services provider does not own the wireless network infrastructure over which it provides services to its customers). The government will also move to a full MVNO model if necessary to support competition in the telecom sector. 

“If down the road, if for some reason, the measures are not having the impact on competition that has been foreseen by the government and supported by the Competition Bureau, then the CRTC should be prepared to revise its approach and expand access MVNO further,” stated Arbour.

He added that moving to a full MVNO model would be a substantial departure, dependent on market conditions in place, including potential issues, such as impact on prices that can negatively influence the success of regional competitors already in the marketplace.

3. Improve consumer rights by;

– require new measures to address unacceptable sales practices and improve transparency in terms of service and pricing, and make it easier and more affordable for consumers to change or cancel services

– require service providers to implement mandatory broadband testing to ensure Canadians know they are getting the service that they are paying for. The CRTC currently only has a voluntary broadband testing program with SamKnows, which involves the installation of specialized equipment in a representative sample of homes to monitor and test the speed and the performance of the connection in a particular location. The purpose of today’s provision is to beef up that process so that it will be mandatory, and that key providers especially in rural areas participate, Arbour said. “But ultimately, it will be up to them [CRTC] to lay out the specific rules for who it applies to and how the testing is undertaken.”

– improve accessibility of telecommunication services to Canadians with disabilities

– improve consumer protection in the event of a service outage

– strengthen the Commission for Complaints for Telecom-television Services (CCTS), including by giving consumers and non-industry representatives a more prominent voice

– raise public awareness on CCTS and its capabilities to resolve disputes for consumers

4. Speed up service deployment and universal access

– Improve access to telephone poles and similar infrastructure so service providers can deploy new services more rapidly

– Adjust its Broadband Fund to meet connectivity needs across Canada. Champagne said that the government continues to roll out its C$3.225 billion in Universal Broadband Fund to support connectivity in underserved rural and remote communities.

5. Build better regulations

– directing the CRTC to use resources available to make sound decisions while being more proactive in strategic planning and market monitoring

– CRTC’s regulations should be efficient and proportionate to their purpose, balancing economic needs with competition and investment considerations

– improve decision timeliness

“Under the Telecommunications Act, the CRTC is responsible for implementing the policy direction and is required to take certain steps and approach all of its future decisions in a way that is aligned with it,” said Champagne. “I trust that the CRTC will act on this important work, and I look forward to seeing the direction being put into action soon.” 

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Jim Love, Chief Content Officer, IT World Canada

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Ashee Pamma
Ashee Pamma
Ashee is a writer for ITWC. She completed her degree in Communication and Media Studies at Carleton University in Ottawa. She hopes to become a columnist after further studies in Journalism. You can email her at [email protected]

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