A coalition of independent providers says the CRTC's approved rates make it difficult for small carriers to compete with larger companies.Justin Tang/The Canadian Press
Telecommunications provider TekSavvy is asking the federal regulator to lower the rates that small carriers pay large companies to resell internet over their fibre networks, arguing competition is “impossible” under the current rules.
TekSavvy is part of a coalition of independent internet providers and industry associations that submitted an application to the CRTC on Thursday urging it to reconsider the decision it made in April.
At the time, the regulator said those rates would allow dozens of competitors to “continue offering new choices to Canadians while also ensuring companies are compensated fairly for the investments they make to connect Canadians to fibre.”
But the group said the CRTC approved “severely inflated” wholesale rates that are higher than the retail fibre internet prices charged by the large carriers.
That hinders the ability of independent providers to compete because they must either sell service at a loss or set retail prices higher than the large carriers, they told the regulator.
“Canadians were promised greater competition for fibre internet services, but these rates make competition impossible,” said Andy Kaplan-Myrth, TekSavvy’s vice-president of regulatory and carrier affairs, in a statement.
“The CRTC must correct these errors to ensure its wholesale rates promote broadband competition that challenges the market power of monopoly incumbents, lowers prices, and increases consumer choice.”
Along with Chatham, Ont.-based TekSavvy, the application was signed by the BC Broadband Association, Canada-Wide Internet Service Providers Association, Fibernetics Inc., ISP Telecom Inc., National Capital FreeNet Inc., Novus Entertainment Inc. and Purple Cow Internet Inc.
Among other asks, they want the CRTC to reduce a 30 per cent markup applied to wholesale fibre services to 15 per cent, in order to account for declining costs, operational efficiencies and the need to support competition.
CRTC spokesperson Mirabella Salem said in an e-mail that the regulator would examine the application and determine next steps, but declined to comment further.
The CRTC previously said companies such as Bell Canada, Telus, Eastlink and SaskTel had made the case for raising the markup above 30 per cent, which has typically been the level set for other wholesale internet services.
Those companies argued a higher rate would reduce risk and allow them to recoup their network investments given the “lengthy” amount of time it can take to do so.
But others such as TekSavvy and the Competitive Network Operators of Canada wanted a lower markup so that small providers could offer more competitive prices to customers. The CRTC determined that the 30 per cent benchmark would support “regulatory predictability, consistency, and business continuity.”
“The final rates are based on real costs, and enable companies to compete for customers while maintaining incentives to build high-quality networks,” CRTC chairperson and CEO Vicky Eatrides said in an April statement.
The CRTC has faced backlash from both big and small carriers over its wholesale fibre framework, especially because it also allows large companies to resell internet using their rivals’ networks outside their core regions.
Bell and Rogers had argued against that clause, saying it discourages the major providers from investing in their own infrastructure, while independent carriers raised concern it would make it more difficult for them to compete against larger players.
Telus supported it as a way to boost competition in regions where it doesn’t have its own network infrastructure, arguing that would improve affordability for customers.
The CRTC chose to apply the policy only to existing fibre networks and said any new fibre infrastructure built by the large telecoms can’t be made available to competitors until 2029.
In June, 2025, the regulator issued its final decision upholding those rules.
The federal government had asked the commission to reconsider whether the Big Three providers should be able to act as wholesalers under the rules, citing concern about the viability of smaller internet providers to act as alternatives.
After a review, the CRTC determined its framework effectively balances the need for both competition and investment, while only having a “modest” near-term effect on the market share of regional carriers.
Bell, Rogers and the Canadian Telecommunications Association called for the federal government to overturn the regulator’s decision. That plea was unsuccessful, as Industry Minister Mélanie Joly reasoned that the framework helps bring costs down for consumers when she announced her decision last August.
Both Telus and Bell have since begun offering fibre service to customers in each other’s dominant territory.
That shows the framework is having a positive effect, CRTC vice-chairperson Adam Scott told a telecom conference in Toronto this past May.
“As it stands, you’ll be hard pressed to convince me that Canadian consumers were better off when large [internet providers] only competed in their own backyards,” he said.