CRTC Wholesale Broadband Pricing Decision Threatens Canada’s Broadband Future
August 21, 2019
CALGARY, Aug. 21, 2019 – Shaw Communications Inc. today said there will be long-term negative consequences to Canadians from the CRTC’s decision to dramatically reduce federally regulated wholesale broadband prices charged to third party internet providers.
“We cannot understand the CRTC’s rationale for drastically reducing the wholesale broadband rates available to third party internet resellers,” said Brad Shaw, CEO of Shaw Communications. “In time, this decision will be seen as short-sighted, and have negative far-reaching consequences for consumers and for the future investment required to build network capacity in all parts of Canada.”
As a result of the reduced wholesale rates, which the CRTC requires to be applied retroactively to January 2017, Shaw will incur a one-time charge of approximately $10 million in its fourth quarter results for fiscal 2019.
“While the CRTC appears to be trying to use the reseller market as a primary source of broadband competition, it is ignoring the fact that the resale model relies on the investments of facilities-based providers like Shaw to create robust, fast and reliable networks for the future,” Mr. Shaw said. “In light of the decision, we are reviewing our future plans for capital expenditure and network deployment.”
In its August 7, 2019 study of broadband competition in Canada, the Competition Bureau noted that “facilities-based competitors engage in a dynamic form of competition to successively introduce better networks over time through investments in new technologies.” Importantly, the study also noted “wholesale access regulation can have a negative effect on the willingness of facilities-based competitors to make the necessary investments to maintain and evolve their networks.”
“At Shaw, the network investments that we have made in a pro-competitive environment have allowed us to double the internet speeds to our customers twice in the past year,” Mr. Shaw said. “Unfortunately, the CRTC decision undermines the direction from the government to expand broadband connectivity to all Canadians and to make Canada a leader in the digital economy.”
About Shaw Communications Inc.
Shaw Communications Inc. is a leading Canadian connectivity company. The Wireline division consists of Consumer and Business services. Consumer serves residential customers with broadband Internet, Shaw Go WiFi, video and digital phone. Business provides business customers with Internet, data, WiFi, digital phone and video services. The Wireless division provides wireless voice and LTE data services through an expanding and improving mobile wireless network infrastructure.
Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 Index (Symbol: TSX - SJR.B, SJR.PR.A, SJR.PR.B, NYSE – SJR, and TSXV – SJR.A). For more information, please visit www.shaw.ca
Shaw Communications Inc.
Chethan Lakshman, VP, External Affairs