Shaw ‘welcomes’ third-party ISP customers: CRTC filing

Shaw Communications Inc. has filed a response to the small ISPs that oppose its proposed new prices for wholesale Internet access that argues against the notion of its moves being anti-competitive. In a Feb. 19 filing to the CRTC, Shaw denied that the new prices —which one operator called “egregious” because they approximately double rates on certain service tiers — are motivated by “anti-competitive intent.” The company expanded on its former statements about valuing its third-party Internet access (TPIA) customers, pointing to the fact that the wholesale market is “healthy and growing” in its network footprint. “Shaw has seen a dramatic increase in wholesale revenues in many segments, as well as significant growth in wholesale customers purchasing competitive services from Shaw,” the company said in the filing. “The foregoing underscores that Shaw’s objective is not to thwart competition. Shaw welcomes the customer base represented by the TPIA segment.” The company said its proposed rates are based on the “fundamental principle” that TPIA prices should be based on costs plus a mark-up, and that the cost study it submitted in confidence to the CRTC laid out that formula. “Interveners seek to persuade the Commission that this long-standing principle should be disregarded,” Shaw said, referring to the Canadian Network Operators Consortium, the Public Interest Advocacy Centre (PIAC), VMedia Inc. and others. While some of the interveners had protested that the costing study was unavailable to them because the CRTC redacts some of the information when the information is published online, Shaw said its “competitively sensitive” information was available to the only party that matters, the CRTC. “This Costing Study … demonstrates the necessity of aligning TPIA rates with actual costs in the current environment, based on speed designations, traffic growth and related changes in the underlying cost characteristics in the broadband market,” the company said. The CRTC calculates the wholesale Internet price based on a formula that includes the cost of building and running the network and includes a built-in margin for the incumbents. VMedia director George Burger said in a Tuesday phone interview that he wanted to see more information from Shaw about its costs in order to determine their actual profit margin. "The fact is, their margins are tremendous," he said. "And if their margins are tremendous, how can they possibly justify the price increases?" Burger added that Shaw is "obviously not responding substantively to our argument; they're just being dismissive. I think it insults everybody's intelligence to not confront our arguments head on. What they're basically saying is, our margins are nobody's business. But that's not true." — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Shaw ‘welcomes’ third-party ISP customers: CRTC filing

News | February 24, 2015

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