Canadian ISPs demand CRTC review of 'inflated' wholesale fibre rates
A coalition of independent Canadian internet service providers led by TekSavvy has filed an application with the CRTC to review and vary Telecom Order 2026-77. The coalition argues that current wholesale fibre internet rates, which exceed retail prices, inhibit competition and are based on inflated cost factors that should be significantly reduced.
Key Takeaways
- The coalition identifies a 25% to 30% artificial rate increase caused by an erroneous 'Adjustment Factor'
- Proposed reduction of wholesale markup from the current 30% down to 15% to reflect operational efficiencies
- Current rates force independent ISPs to either sell services at a loss or price themselves above incumbent carriers
- Technical errors regarding fibre speed descriptions are cited as a primary reason for immediate regulatory correction
Why It Matters
If the current wholesale rates remain, independent ISPs face potential insolvency or irrelevance in Canada's high-speed market, as they cannot price competitively against major telecom giants. This gridlock threatens the federal government's policy goal of fostering a diverse retail broadband market. The ecosystem impact is significant: high wholesale barriers limit the expansion of smaller players into multi-service bundles, including television and smart home tech, which often rely on fibre speeds. Watch for the CRTC's response to this 'review and vary' application, specifically if they allow interim rate reductions during the inquiry.
Additional Context
The challenge to Telecom Order 2026-77 follows years of regulatory friction between Canada’s incumbent carriers and independent providers. Per MobileSyrup (April 2026), the CRTC finalized these wholesale rates to provide 'certainty' after years of temporary pricing. However, the decision was criticized from launch for mirroring older interim rates that many independent firms already found unsustainable. For example, Bell’s 150 Mbps fibre plan was sold through its flanker brand EBOX for roughly $50 per month, while independent competitors faced over $100 in wholesale input costs for the same service, according to CNOC (July 2026). This regulatory environment has already triggered significant consolidation in the Canadian ISP market. Per the CRTC’s Canadian Telecommunications Market Report (2025), the market share of wholesale-based providers dropped from 8.4% in 2020 to 4.2% in 2024. This decline was accelerated by incumbents acquiring several major independent players, including Bell’s purchase of Distributel and Telus’s acquisition of Start.ca and Altima Telecom, per CNOC (April 2026). While the CRTC argued in its April 2026 press release that the framework could bring new competition to up to 8.5 million households, much of that projection relied on major incumbents like Bell and Telus entering each other’s out-of-territory markets. Under the current rules, Telus began using Bell’s network in Ontario and Quebec, while Bell accessed Telus infrastructure in Alberta and British Columbia. Independent ISPs argue this dynamic prioritizes incumbent expansion over legitimate third-party competition, as the current markups and adjustment factors effectively lock out smaller firms seeking to undercut big-carrier retail pricing.
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