Critics of Rogers-Shaw merger say government must mandate affordable internet in remote areas
'It doesn’t do well for the consumer by a long shot,' says head of New North Networks of merger
News of a proposed $26 billion Rogers-Shaw merger this week, a move that would combine two telecom giants, has Canadians casting a critical eye on the prices they pay for TV, cell and internet services — and nowhere is that felt more acutely than in Northern Canada.
Residents there have fewer options for services, and geography means that connections may be slow or non-existent, and prices are often higher.
Tom Zubko is the head of New North Networks based in Inuvik, N.W.T., a company that offers digital cable TV and high-speed internet services.
He says that the merger will concentrate power among fewer large companies and says the federal government and CRTC are failing to ensure communication services are affordable for consumers.
"It doesn't do well for competition. It doesn't do well for the consumer by a long shot," Zubko told Cross Country Checkup.
"The government hasn't been able to come up with any kind of a cohesive plan to lower the cost of cell service or other communication services across the country, in spite of the fact that there are places, you know, like Australia that has an extremely strong, consumer-oriented type of communications program," he said.
Zubko says that fewer companies in control means they can price out the smaller companies and prevent them from competing. For example, he says his company buys internet and transport services from a company in Alberta, but that company was taken over by Bell last year.
"So where we have some fairly reasonable pricing right now for services into northern Alberta, we don't have a lot of confidence that Bell won't change those once it fully integrates the takeover that it made a year and a half ago," he said.
"If they want to stop us from competing, they raise the prices there and it makes it more expensive, more difficult for us to bring services to our customers, no matter how good we are at doing it on a local basis."
No accountability, says advocate
Zubko's concerns are echoed by Andy Kaplan-Myrth, vice president of regulatory and carrier affairs for the internet service provider TekSavvy.
"If this deal goes through .... if Rogers buys Shaw and the government and the CRTC don't get serious about supporting wholesale, prices are going to go up for sure," he said.
In this proposed merger, Rogers has only committed not to raise prices for a short amount of time, he points out.
"I mean, that's basically an admission that a consolidation like this involves prices going up," he said.
Kaplan-Myrth says that it doesn't make sense for carriers to each build their own infrastructure and compete against each other there. Instead, there should be a wholesale model that provides access to network infrastructure for a variety of internet service providers, who can then compete on pricing to consumers.
"Every Canadian deserves reliable, affordable, and high-speed connectivity and we're at a critical inflection point where generational investments are needed to make Canada-wide 5G a reality and close the urgent connectivity gap," wrote Rogers spokesperson Andrew Garas in an email to CBC News.
"As part of bringing our companies together, we will create a new $1 billion fund for rural, remote, and Indigenous communities, new jobs and investment in Western Canada, with the scale needed to bring these vital services to more communities, more quickly, than either company could do on its own."
Laura Tribe, the executive director of OpenMedia, an advocacy group that supports open and affordable internet access, says that she doesn't see a mechanism in the proposed deal that would guarantee Rogers would increase investment in rural internet access and there's no way to hold them accountable if the work doesn't get done.
"We know that in rural Canada and remote areas of Canada, the quality of service, the affordability of service … is much worse than it is in southern and more urban areas of Canada," she said.
"When we're looking at the communities that are the most underserved, they have been passed over time and time again for a reason. These companies don't think they can make enough money there," she said.
Huge bills, bad service in the north
High prices for consumers is something Madeleine Redfern knows all too well.
She is the chief operating officer of CanArctic Inuit Networks, a company building a 3,000 kilometre subsea fibre optic connection from Clarenville, N.L. to Iqaluit.
Redfern, who is the former mayor of Iqaluit, says that residents don't have bundled packages for internet, phone and cable, no unlimited broadband and pay significant amounts of money for data overages. She says many households will find themselves paying hundreds of dollars a month for these services.
"Many of our neighbours, we know that their internet bill, especially since COVID, people are paying anywhere between $500 to $1,000 a month," she said, adding that her own bill for the month of January was $1,200.
The lack of stable connections in some areas causes significant hurdles for people trying to go about their daily lives, such as trying to pay using a debit card or credit card, which requires an internet connection.
"The transaction is not going through because the signal keeps dropping," she said. "You simply may be faced with a situation where you can't pay for your gas, you can't get money out of an ATM or from the bank teller or pay for your groceries."
Families weren't able to send their children to school online, and students who wanted to attend post-secondary remotely were unable to because of the unreliability of the internet.
The fibre optic link that Redfern's company plans to build, the SednaLink, would replace the current satellite links for internet access, and is scheduled to be completed in 2023.
The most important part, said Redfern, is that the company is Inuit-led and would work on a utility model for pricing. She noted however, that the company will sell wholesale access to internet service providers who will then sell services to consumers.
Redfern says that Rogers and Shaw don't provide service in Iqaluit so she doesn't see the merger directly affecting residents.
"The main impact is that we're seeing a move across the country to the dominance of large telecommunications titans" she said.
"It does make it harder for the development of either local or regional internet service providers, let alone the ability for Indigenous internet service providers and telecommunications companies to get into this important sector."
Written by Andrea Bellemare with files from CBC News and Steven Howard. Produced by Menaka Raman-Wilms.