The source of this problem is clear:  The big telephone and cable companies now control 94% of the residential internet services market in Canada.

This dominance of just a few companies stands in stark contrast to the competitive dynamic and choice that existed when internet access was first emerging. In 1998 competitors had 47% of the residential market however as high speed began to emerge competitors’ market share began to drop dramatically and is now virtually non-existent because the former monopolies have denied competitors fair economic wholesale access.

As you may know, telephone companies built networks over decades supported by federal rules which gave them monopolies over telephone service. This was a form of subsidy by taxpayers, guaranteeing that these companies would be profitable, so that the public could benefit from having telecommunications networks across the country.

The federal government put in rules to help create healthy competition. These rules required the largest providers to allow competitors to connect to their networks, at prices that were regulated by the CRTC. This allowed Canadians to have access to a choice of provider for telephone and eventually for Internet services too.

This system of regulation and competition should be good for Canadians, ensuring lower prices, more innovation, and better service than would be the case if you were captive to a single monopoly provider. Rules like competitive access are specifically designed to prevent abuses of market power. But the big providers often ignore those rules and regulations that don't suit them. See this letter  from competitive ISPs for more details on this.

Even more appalling, recently the biggest providers have essentially received permission from the CRTC to reduce competition and simultaneously raise prices. Unfortunately this is not a brand new problem. Canadians already pay higher rates than all but 3 of the industrialized countries of the OECD.  The outrageous pricing and anti-competitive actions by the big communication service providers have been slowly eroding Canadian's competitiveness over the last 10 years.  Governments have recognized this issue. Several years ago the Government of Alberta tried to address the challenge by investing in the construction of a provincial "Supernet". This intervention helped connect 429 communities in Alberta to an advanced fibre optic network. Unfortunately, the implementation of the Alberta Supernet has been fraught with challenges. This network has still not connected the vast majority of Albertans and the original dream of connecting all Albertans to this advanced fibre optic network has not yet been realized.