Large telecoms oppose CNOC application for interim relief

Canada’s biggest telecom companies are asking the CRTC to dismiss an application by smaller providers that, if granted, would make usage-sensitive rates interim, allowing small Internet service providers to access refunds and retroactive rate adjustments should the CRTC lower wholesale rates in the future. BCE Inc. said in an intervention that doing so would introduce “significant and unnecessary uncertainty that harms the marketplace and ultimately consumers and the public interest.” CNOC had filed a Part 1 application with the CRTC in early May, saying that the usage-sensitive rates, a category that includes capacity-based billing (CBB) fees that large telecom companies charge small ISPs to access their wireline networks, have reached extreme levels and are eroding competition “with every passing day.” Interventions were due June 1. In its response, Bell argued that the “balance of convenience favours allowing parties to see the results of the Wholesale Wireline Review and Costing Review before considering and commenting on an application to make some of the rates at issue in those proceedings interim.” In late May, the CRTC announced a review of the application process and methods for determining tariff rates for large cable and telephone providers selling wholesale high-speed Internet access. The CRTC also wrapped up a week-long hearing into the wholesale wireline market in December. In an email Monday, CRTC spokeswoman Céline Legault declined to offer any details about when the CRTC will issue a decision. “CNOC’s Application attempts to reopen past proceedings and amounts to a pre-emptive collateral attack on any outcome that could emerge in the Wholesale Wireline Review other than the one it prefers. This is an abuse of the Commission’s process,” Bell said. Telus Corp. also said that granting CNOC’s request would lead to uncertainty. It called CNOC’s application “speculative and not a sound basis upon which to make a rate that is already final interim. Moving from a final rate to an interim rate imposes uncertainty, both on the regulated service provider and the customer, and should not be made lightly.” It argued that “CNOC’s application is founded on its desire for lower rates, not on any evidence that TELUS’ costs studies or the Commission’s tariff proceedings were flawed.” In a joint response, large cablecos Rogers Communications Inc., Shaw Communications Inc., Quebecor Inc. and Cogeco Cable Inc. said there was no basis for CNOC’s application. The companies argued that CNOC’s arguments were already aired during the wholesale wireline review and were, at that time, “unaccompanied by any request for interim relief.” They said that CNOC has not placed any new evidence on the record, and that the basis for its application “appears to rest solely on the unsupported assertion that the Cable Carriers’ Usage Sensitive Rates are unreasonably high.” They said that when the CRTC established the capacity-based billing regime that is currently in place, it assumed Internet traffic would grow 20 per cent annually, but the five cable companies are seeing growth of 50 per cent each year. “This means that higher usage by CNOC members is actually being charged at a lower rate than would otherwise have been the case if the Commission had accepted a higher growth rate,” they said. The intervention also addressed CNOC’s argument that the rates are too high for the smaller companies to offer TV services. The cablecos argued that while it “might well be that the bundles in question do not make economic sense,” the Telecommunications Act doesn’t require large telecoms to “offer services at artificially low rates to ensure competitors succeed in either the telecommunications or broadcasting markets.” The companies also noted that the CRTC will be issuing a decision on the wholesale wireline proceeding soon, and stated that CNOC’s application “is therefore premature and unprecedented.” They argued that the appropriate time to apply for interim rates would have been when that proceeding began, and “not weeks before the anticipated release of that decision.” “Any perceived urgency at this juncture is entirely the result of CNOC’s failure to request interim rates at the outset of the Wireline Wholesale Review — not the result of any event that has occurred since the proceeding closed,” they said. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Large telecoms oppose CNOC application for interim relief

News | June 8, 2015

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Large telecoms oppose CNOC application for interim relief

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