New wholesale rates to cost Rogers $140M, Cogeco $25M, companies say

Originally published by The Wire Report

Cogeco Inc. said Monday that the new wholesale broadband rates set by the CRTC will cost the company $25 million in retroactive payments, while Rogers Communications Inc. said it “expects to record a charge of approximately $140 million in the current quarter to account for the retroactive impact of the lower rates.”

Rogers said the “final rates do not recognize the true cost of building and expanding Canada’s world-class broadband networks and will certainly impact Rogers future network investments.”

Cogeco expressed “surprise and disappointment” in a press release issued Monday in response to the regulator’s decision last week.

Of the $25 million, $10 million will pay the retroactive rates for fiscal year 2019, while the remaining $15 million will cover fiscal years 2016 to 2018, it said.

Both companies pointed to the August 7 report from the Competition Bureau, which said that the bureau was impressed by the state of competition in the wholesale broadband market, but unsure of how long the dynamic would continue.

The report, according to Cogeco, “underscores the importance of setting wholesale access rates at the correct level in order to ensure that investment incentives are maintained for the future.”

The company said it is “assessing its options going forward.”

The release from Cogeco came just hours after BCE Inc. said it would be reducing its rural fixed wireless investment by 20 per cent in response to the new wholesale rates, after determining the new rates would cost Bell $100 million in retroactive payments.

In its release, Rogers said the “company is determining next steps, including a review of all future investments in rural and remote communities.”

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