Canada takes another step backwards in telecom service

According to Standard & Poor, Canada’s Big Three telecom providers are able to handle their debt load associated with the rollout of 5G, which is fantastic news for shareholders, but it’s not so great for consumers.   

This is a perfect example of the systemic inequities of Internet access in Canada. The telecom oligarchs are transferring wealth to shareholders at the expense of consumers and because of their market dominance and the lack of regulatory oversight there is nothing consumers can do about it.

S&P is upgrading the bond rating for BCE Inc., Rogers Communications Inc. and Telus Corp. so the incumbent telecoms can take on more debt to roll out 5G networks, which will largely benefit themselves and wealthy subscribers. If the telecoms’ debt ratings took a negative turn, they wouldn’t be able to justify higher dividend payouts to shareholders.  

So, while the Big Three take on more debt, their shareholders are making more money, and 5G is in the process of rolling out in urban, affluent neighbourhoods. Where does this leave low-income, northern, and rural communities? They’re sadly the ones paying for it through the taxpayer subsidies, which largely go to incumbent telecoms to deploy 50/10 Mbps service by 2030.

Governments at all levels are being pushed to intervene, but so far, the only solution the feds have come up with is to give the incumbent telecoms more taxpayer money to inadequately fill the gaps.

Rural communities are stuck paying exorbitant amounts for their slow Internet, while their peers in wealthy areas like parts of downtown Toronto continually gain access to faster and faster speeds. And this isn’t just a rural-urban issue. A few square blocks near the Financial District downtown Toronto residents have access to 1 Gbps symmetrical Internet for about $100 a month while some neighbouring communities to the east like Moss Park and Regent Park struggle with slower and more expensive service.

And things are only going to get worse. As BCE, Rogers and Telus take on more debt, they will use it as a reason to justify rate hikes. Internet is going to get more expensive, and with a lack of competition on a national level, there’s nothing stopping it as the CRTC is loath to regulate.

There’s clearly something wrong with this picture. Three oligarchs get the green light to take on more debt, all while paying out more money to shareholders and increasing prices. All so all affluent urban areas will someday have access to FTTP and 5G networks, leaving rural communities stuck in the past.   

I’m all for the advancement of broadband infrastructure and technology, but it needs to be rolled out in a way that everyone in the country has equitable access to the Internet as it is a determinant of one’s access to essential services like utilities, transportation, healthcare, education, and marketplaces, as well as all the other services people need on a daily basis to learn, play, stay healthy, find a job, connect to customers, and grow a business.

It is now more important than ever for municipalities to take it upon themselves to invest in their own broadband infrastructure and/or support emerging and smaller telecom service providers so that independent providers can have a fair shot at competing with the Big Three. This is the only way BCE, Rogers, and Telus will feel any pressure to offer competitive pricing and continue to improve their services for everyone.