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Contact: Susan Hershman
(416) 523-6520, susan.hershman@vmedia.ca
VMedia demands all stays against implementation of CRTC decision in favour of lower internet prices finally end so Canadian families can start saving over $1 billion per year.
Toronto, ON-February 25, 2021 – VMedia Inc., one of Canada’s leading independent internet service providers, welcomes the rejection by the Supreme Court of Canada (SCC) of an attempt by Bell, Rogers, Videotron and others to further delay the introduction of lower residential internet prices for Canadians. Current prices are known to be among the highest in the world.
In August, 2019 the CRTC determined that the rates charged by the incumbent major telecom and cable companies for internet services for at least the past five years were not ”just and reasonable”. These inflated rates have resulted in unjustifiably higher prices paid by all Canadians for internet services. The introduction of those lower rates have been delayed, or stayed, in the course of various appeals by the incumbents. When the rate structure mandated by the CRTC is implemented, the result will be savings of up to $100 million per month for Canadian households.
“The CRTC found that competitors like VMedia have been overpaying for wholesale broadband for at least five years,” said Alexei Tchernobrivets, CEO of VMedia. ”This means that we are unable to reduce prices to levels that reflect the true cost of broadband. If we are forced to charge more, incumbents have the benefit of less competition, which lets them keep their prices, which are among the highest in the world, as high as they are.”
The telcos first appealed the CRTC decision to the FCA, which last September unanimously (3-0) rejected the incumbents’ claims. They then applied for leave to appeal to the SCC, unusual in the circumstances of a unanimous FCA decision, delaying the introduction of lower rates by a further six months. That application was rejected today.
The rejection of the leave application reinforces the FCA’s judgement that the CRTC acted properly and within its jurisdiction in concluding prices were unfairly high.
However, these stays in conjunction with the various telco appeals have cumulatively delayed the implementation of the lower rates for over a year and a half.
VMedia stated that with these clear rejections of specious claims by the incumbents, there is no longer any justification for any stays to be granted in connection with any other appeals the incumbents might pursue.
“There is one final stage of the process remaining that stands between Canadian households and substantially lower internet costs,” said George Burger, co-founder of VMedia, “and that is the issuance by the CRTC of its own review of its decision, carried out at the request of the incumbents. Whatever the outcome of the review, no doubt the incumbents will seek appeals there as well. But if they do, they should not be entitled to the benefit of any stay in the implementation of the CRTC’s final decision.”
With these rejections of the appeals, including its own, it is unlikely that the FCA will hear another appeal of this matter. Nonetheless, there is nothing to stop incumbents from applying in any case, if for no other reason than to further delay the implementation of the decision.
“We have no objection to anyone exercising their rights to the fullest extent of the law,” said Burger, ”but the time to reward incumbents with stays that let them keep their money in their pockets for years, at no cost to them but great cost to consumers, is over.”
At this point the big telcos have the benefit of $500 million that the CRTC has determined they would not be entitled to if tariffs were based on inputs that were just and reasonable. That does not take into account the additional $100 million per month in excess rates paid by Canadians, and pure profit to the incumbents, until the lower rates are implemented.
“There is no standard of fairness that would justify any continuation of this freeloading on the backs of Canadians,” Burger continued, ”and coming in the midst of a pandemic, when home internet services are particularly crucial and unemployment is at record levels, it is particularly heartless.”
VMedia acknowledges that there may be another appeal to Cabinet when the CRTC issues its final decision. Given the weight of the prompt rejection of the leave application by the Supreme Court, VMedia hopes that the Federal Cabinet will just as promptly reject any further appeal so that Canadians can reap the benefits of the CRTC’s decision.
In August, 2020, the Federal Cabinet took the unusual step of interfering with the CRTC’s review and vary process, suggesting considerations that were not borne out by the evidence placed before the CRTC. In effect, Cabinet sought to substitute its own findings, based on extensive lobbying campaigns and private meetings with the incumbents, for that of the CRTC which, in contrast, concluded that internet prices were not just and reasonable, and what they ought to be, after conducting a six-year long completely transparent process, including hearings and analysis involving the world’s leading experts on internet costs.
The incumbents succeeded in convincing Cabinet, which they could not do with the CRTC, that the CRTC decision would make them unable to invest in rural internet service improvements. This threat is a staple in all rate-setting hearings, and despite decisions unfavourable to the incumbents in the past, their investments have never been impaired. Moreover, the cost to the incumbents resulting from the CRTC decision was a rounding error- less than one-half of one percent of their profits over the last six years.
“The law clearly supports the CRTC’s decision,” said Burger. “It would be a great disservice to Canadians if the Federal Cabinet favoured its own political priorities for the judicious decisions of the highest Canadian courts, and the interests of hard-working, and now unfortunately long-suffering, Canadians.”
ABOUT VMEDIA
VMedia is Canada’s leading independent telecom and broadcasting company available coast-to-coast, offering unlimited Internet, TV, Home Phone and Home Security services. VMedia’s mission is to provide the most affordable prices, the best choice and flexibility, dedicated consumer advocacy and ongoing service innovation. VMedia is recognized as an innovation leader in the industry, as the first to launch numerous consumer-friendly service and packaging features, and in particular is a pioneer in the development of live TV streaming solutions and IPTV broadcast technology, offering affordable choice and easy access to all your favourite TV entertainment. Visit www.vmedia.ca. It is also the parent company of RiverTV Inc., the owner of RiverTV, Canada’s first live and on demand streaming TV service. Learn more about this great new TV platform at www.rivertv.ca.