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Big telcos set to hit many Canadians with internet price hikes

cbc.ca logo cbc.ca 2018-03-09 Sophia Harris
a person posing for the camera: Eric Polsinelli of Oshawa, Ont., is not happy that his Rogers internet plan is going up by $8 a month. © Eric Polsinelli Eric Polsinelli of Oshawa, Ont., is not happy that his Rogers internet plan is going up by $8 a month.

Canadians' thirst for fast, reliable internet service has surged in recent years, and so has the amount we're paying to stay connected.

For many customers, the cost of home internet is about to get even more pricey as the big telecom companies hike rates once again. 

"Internet is expensive enough," said Rogers customer Eric Polsinelli of Oshawa, Ont. "There's nothing I see on my end that justifies that extra $8."

On March 12, Rogers will raise prices for all its current internet plans by $8 a month, with the exception of its cheapest package, which will rise by $4 a month.

On April 1, Bell will increase internet prices by $5 a month for customers in Ontario and by $3 a month for Quebecers. In both provinces, charges for exceeding one's internet data limit will also go up by $1 to $4 per extra gigabyte.

Rival Telus says it has no current plans to raise internet prices. However, some customers are still feeling the pinch after the company ended its bundle discount in late January, which provided customers who signed up for multiple services a monthly discount of $3 per service.

Rogers, Bell and Telus  also hiked prices on some internet plans in 2017.  

Living online

News of the latest round of price increases didn't sit well with some customers.

"I would rather not pay more, but what can I do?" said Bell customer Larry McLean of Toronto, who also got hit with the same $5 internet price hike in 2017 .

"I'm tired of price gouging," Polsinelli tweeted to Rogers after learning his current $70 internet bill is going up by $8 a month.

According to Statistics Canada, Canadian households spent an average of $594 on internet services in 2016, a 35.6 per cent increase compared to 2012.

"Just so much of our life is dominated by the web," said Katy Anderson of consumer advocacy group OpenMedia. "People are spending more and more money per month to access the internet."

As a result, revenues are also on the rise. 

A  recent report by the industry regulator, the CRTC, found the telcos' internet service revenues climbed to $10.2 billion in 2016 — a jump of 10.2 per cent compared to the previous year, and the biggest increase for any telecom service, including wireless.

Rogers, Bell and Telus all said they need to raise internet prices — or in Telus's case, end the bundle discount — to generate the funds requried to upgrade their networks and keep up with growing demand for their services.

" We're continually investing to deliver great value and fast, reliable internet for our customers now and in the future as demand continues to grow," Rogers spokesperson Michelle Kelly said in an email.

Telecommunications consultant Lawrence Surtees says telcos do have added costs when they expand their networks. However, he's not certain that explains why internet prices have continued to creep up over the past couple of years. 

"They budget that, they figure out how much it's going to cost, then they do an increase. I'm not quite sure why they need to do second or third increases," said Surtees, with market intelligence firm IDC Canada. 

"I'm a bit skeptical."

a screen shot of a computer: According to a recent CRTC report, internet service revenues climbed from $9.2 billion in 2015 to $10.2 billion in 2016 — an increase of 10.2 per cent. © Karen Bleier/AFP/Getty Images According to a recent CRTC report, internet service revenues climbed from $9.2 billion in 2015 to $10.2 billion in 2016 — an increase of 10.2 per cent.

Polsinelli says his family uses the internet for everything from their phone service to watching Netflix.

Still, he says he's not prepared to pay more for what he's getting.

"I rely on the internet, but I need to be realistic as a consumer here."

To make his point, Polsinelli informed Rogers on Twitter that he's considering moving to upstart internet service provider TekSavvy.

"If they're not going to at least match the prices I can get somewhere else, I will just abandoned ship," he said. 

Shop around

Vancouver-based OpenMedia recommends unhappy customers consider smaller providers such as TekSavvy and Distributel that offer competitive pricing for internet services.

"They can be good alternatives for Canadians," Anderson said.

OpenMedia also believes the federal government should intervene to help make internet service more affordable.

In 2016, the CRTC declared broadband internet a basic service to which all Canadians are entitled.

OpenMedia is now calling on the government to implement a national broadband strategy that would include mandating telcos provide a low-cost, basic high-speed internet package and encouraging more competition in the industry.

"If we want Canadians to be able to participate in the digital age, we need to ensure there's actual packages there that make sense for Canadians in terms of pricing," Anderson said.

Rogers says it's already helping low-income Canadians by offering a $9.99 per month basic internet plan to more than 150,000 people living in social housing.  

Meanwhile, Polsinelli is still waiting to see if Rogers will offer him a better deal for his internet service.

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So far, the company hasn't budged. But TekSavvy has weighed in, tweeting to Polsinelli, "No price increases from our side."

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