Bell Canada says it will cut about 200,000 rural households from a broadband internet build-out to offset the impact of a regulatory change that lowers the wholesale broadband rate that it can charge smaller providers. Bell Canada head office is seen on Nun’s Island, Wednesday, August 5, 2015, in Montreal. THE CANADIAN PRESS/Ryan Remiorz

Bell Canada says it will cut about 200,000 rural households from a broadband internet build-out to offset the impact of a regulatory change that lowers the wholesale broadband rate that it can charge smaller providers. Bell Canada head office is seen on Nun’s Island, Wednesday, August 5, 2015, in Montreal. THE CANADIAN PRESS/Ryan Remiorz

Bell will cut 200K households from rural broadband program after CRTC rate cut

Company says the cut will cost it $100 million

Bell Canada says it will cut roughly 200,000 households from a rural internet expansion program after a federal regulator lowered wholesale broadband prices that major telecom companies can charge smaller internet providers.

The Montreal-based company said Monday that the final rates set last week by the CRTC will cost it more than $100 million, with the bulk of the sum going to cover the retroactively lower rates.

“Putting this kind of unexpected and retroactive tax on capital investment is not the way to ensure the continued development of Canada’s internet infrastructure,” said Bell chief operating officer Mirko Bibic in a statement.

The company said that in response, it will cut back by 20 per cent on a rural internet program designed to provide wireless internet access to homes that are hard to reach by fibre or traditional cable access.

READ MORE: CRTC lowers wholesale broadband rates to boost competition

Rogers Communication said it was very disappointed by the CRTC’s ruling and that it was reviewing all future investment in rural and remote communities in light of the $140 million charge expected by the decision.

The regulator requires that large telecom companies like Bell and Rogers sell access to their infrastructure to smaller internet providers as a way to improve competition and lower prices.

After years of review, the CRTC set final wholesale rates last week that were up to 77 per cent lower than the interim rates set in 2016.

Bell’s decision to cut back spending is a political move designed to play on fears, said John Lawford, executive director and general counsel of the Public Interest Advocacy Centre.

“It bugs the hell out of me that they can hold rural people hostage, or pretend that they are, by saying oh now we’re not going to invest.”

He said that the company will still make profits by selling infrastructure access to smaller providers, and could still very much afford to continue the high-speed expansion to less profitable rural areas.

“If they dug a little deeper in their pockets they could keep those marginal people on if they really believed in rural areas, but they don’t. They’re using them as a pawn, so that’s why it’s sickening to me.”

He said rural internet expansion, which is already subsidized by the government, isn’t really related to the CRTC decision last week to set lower broadband wholesale rates.

ALSO READ: CRTC to bring in ‘code of conduct’ for internet providers

The major telecom companies have long threatened that infrastructure investments could be impacted by lower broadband access rates.

Bell says the latest decision means the rural expansion program will be cut back to a million households from 1.2 million across Manitoba, Ontario, Quebec, and Atlantic Canada. The company had expanded the program from an initial target of 800,000 households following a federal government incentive program.

The cut to rural service expansion seems to be based on a false premise, said Matt Stein, chair of the Canadian Network Operators Consortium and CEO of Distributel.

“It seems like they’re trying to put the blame on not being able to charge the excessively high prices that they had been.”

He said the CRTC didn’t give a discount to independent service providers, it just corrected a priced that had been too high based on the regulator’s criteria.

“If Bell was counting on charging too high a price for these services to wholesale ISPs as a way to fund rural broadband, that doesn’t make a lot of sense.”

A Competition Bureau study released in early August found that CRTC rules that allow smaller providers to buy access to networks have created more choice for consumers and increased competition, though rural and remote customers have fewer options.

The study found 90 per cent of all customers were generally satisfied with their internet provider, while customers of independent providers were more likely to be very satisfied.

The Competition Bureau said it was important to set wholesale rates at the right level to make sure there are still incentives for the major providers to invest in infrastructure, while also giving opportunities for smaller players.

ALSO READ: B.C. minister says rural internet is ‘railroad of the 21st century’

Ian Bickis, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A 17-year-old snowmobiler used his backcountry survival sense in preparation to spend the night on the mountain near 100 Mile House Saturday, Jan. 16, 2021 after getting lost. (South Cariboo Search and Rescue Facebook photo)
Teen praised for backcountry survival skills after getting lost in South Cariboo mountains

“This young man did everything right after things went wrong.”

BC Emergency Health Services has deployed the Major Incident Response Team (MIRRT) as COVID-19 positive cases rise in the Williams Lake region. (Monica Lamb-Yorski photo - Williams Lake Tribune)
B.C.’s rapid response paramedics deployed to Williams Lake as COVID-19 cases climb

BC Emergency Health Services has sent a Major Incident Rapid Response Team to the lakecity

Interior Health update. File photo.
86 new COVID-19 cases, two more deaths in Interior Health

The new deaths are from Heritage Square, a long-term care facility in Vernon

Jethro Rolland, 8, and Guinevere Rolland, 6, test out the ice at the new outdoor rink in 100 Mile House. (Kelly Sinoski photo - 100 Mile Free Press).
Outdoor ice rinks popular Cariboo pastime

The skaters are out this winter across the South Cariboo.

A scene from “Canada and the Gulf War: In their own words,” a video by The Memory Project, a program of Historica Canada, is shown in this undated illustration. THE CANADIAN PRESS/HO - Historica Canada
New video marks Canada’s contributions to first Gulf War on 30th anniversary

Veterans Affairs Canada says around 4,500 Canadian military personnel served during the war

Williams Lake physician Dr. Ivan Scrooby and medical graduate student Vionarica Gusti hold up the COSMIC Bubble Helmet. Both are part of the non-profit organization COSMIC Medical which has come together to develop devices for treating patients with COVID-19. (Monica Lamb-Yorski photo - Williams Lake Tribune)
Group of B.C. doctors, engineers developing ‘bubble helmet’ for COVID-19 patients

The helmet could support several patients at once, says the group

Conservative Leader Erin O’Toole holds a press conference on Parliament Hill, in Ottawa on December 10, 2020. THE CANADIAN PRESS/Sean Kilpatrick
No place for ‘far right’ in Conservative Party, Erin O’Toole says

O’Toole condemned the Capitol attack as ‘horrifying’ and sought to distance himself and the Tories from Trumpism

A passer by walks in High Park, in Toronto, Thursday, Jan. 14, 2021. This workweek will kick off with what’s fabled to be the most depressing day of the year, during one of the darkest eras in recent history. THE CANADIAN PRESS/Chris Young
‘Blue Monday’ getting you down? Exercise may be the cure, say experts

Many jurisdictions are tightening restrictions to curb soaring COVID-19 case counts

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic in Toronto on Thursday, January 7, 2021. THE CANADIAN PRESS/Nathan Denette
COVID-19: Provinces work on revised plans as Pfizer-BioNTech shipments to slow down

Anita Anand said she understands and shares Canadians’ concerns about the drug company’s decision

Tourists take photographs outside the British Columbia Legislature in Victoria, B.C., on Friday August 26, 2011. A coalition of British Columbia tourism industry groups is urging the provincial government to not pursue plans to ban domestic travel to fight the spread of COVID-19. THE CANADIAN PRESS/Darryl Dyck
B.C. travel ban will harm struggling tourism sector, says industry coalition

B.C. government would have to show evidence a travel ban is necessary

(Phil McLachlan - Capital News)
‘Targeted’ shooting in Coquitlam leaves woman in hospital

The woman suffered non-life threatening injuries in what police believe to be a targeted shooting Saturday morning

JaHyung Lee, “Canada’s oldest senior” at 110 years old, received his first dose of the COVID-19 vaccine on Thursday, Jan. 14, 2021. He lives at Amenida Seniors Community in Newton. (Submitted photo: Amenida Seniors Community)

Most Read