Thank you, Madam Chair, vice chairs and committee members. Thank you for the opportunity to speak with you.
My name is Andy Kaplan-Myrth, and I'm VP of regulatory and carrier affairs at TekSavvy, an independent Canadian Internet and phone service provider based in southwestern Ontario and Gatineau, Quebec.
TekSavvy has been serving customers for over 20 years. Today, we have over 300,000 customers in every province.
TekSavvy has always defended some very important values concerning the Internet. We believe in affordable, competitive access, as well as network neutrality and our customers' privacy rights.
In our home territory in southwestern Ontario, we connect customers on network facilities that we build. Elsewhere to reach customers where we have not built our own networks, we buy wholesale services from the large incumbent carriers.
Wholesale-based competitors like us serve more than one million households and businesses. Seven months ago, I told this committee that the entire framework for telecom competition was at a breaking point, and competitors were at risk of disappearing. The situation today is dire. If we don't protect broadband competition, especially during the uncertain times of this pandemic, then the result will be less affordable Internet services and less investment in underserved communities.
Since my last appearance here, TekSavvy and the competitive broadband industry have seen some victories and some setbacks concerning wholesale rates and our access to modern fibre networks.
After the CRTC set final rates in August 2019 correcting inflated rates going back four years, TekSavvy passed on the benefits of those lower rates to consumers by lowering our prices. However, the incumbents got a stay preventing those rates from coming into effect. They also filed multiple appeals.
In August, the Governor in Council responded, and while it did not overrule the CRTC, its decision adopted the incumbent's false position that investment and competition need to be balanced against one another.
In September 2020, the Federal Court of Appeal unanimously dismissed the incumbents' appeals to that court saying their issues were of dubious merit.
Despite that ruling, competitors had another setback when the CRTC suspended their own final rates leaving in place the inflated rates that the CRTC itself already found to be unjust and unreasonable.
Meanwhile, the incumbents have been targeting us with anti-competitive retail prices that are below the wholesale rates that they themselves inflated. In February, TekSavvy filed a complaint with the Competition Bureau seeking an inquiry into some of that anti-competitive conduct.
After being squeezed by incumbents for years and having lowered our prices expecting the CRTC to implement its final rates, by late 2019 TekSavvy was losing money. As a result, TekSavvy had to make the difficult decision to raise prices twice in the past year. In some cases, absurdly, we have had to set our prices higher than those of the same incumbents who sell us wholesale services, and now instead of losing money, we're losing customers.
We remain hopeful that the CRTC will reaffirm its earlier rates, and that the government will trust these experts who have spent years poring over thousands of pages of evidence. Those rates that are retroactive correction to years of overpayments are critical, not only for competitors, but also for connecting people in underserved areas.
Despite the widespread rhetoric, TekSavvy and other competitors do invest in network facilities. TekSavvy's five-year investment plan funded by ownership and private capital totals over $250 million including over $100 million for high-speed network facilities connecting 60,000 residents and businesses in underserved communities across southwestern Ontario.
As important as they are, all of these issues about wholesale rates are for access to aging legacy technologies. Five years ago, the CRTC determined that competitors need access to modern fibre to the home networks, but we still don't have access to them, and that's not to mention the mobile sector where we have no service-based competition and where mobile rates remain some of the highest in the world.
Canada needs to accelerate the deployment of networks to underserved areas. To accomplish that, a broadband plan must include competition by design, and it must reject the false dichotomy between investment and competition.
TekSavvy is demonstrating that we can have both.
Thank you. I look forward to your questions.