CRTC proposes fines for Iristel, Telus over ‘self-serving’ conduct

The CRTC has proposed enforcing a financial penalty of between $750,000 and $1.25 million on both Iristel Inc. and Telus Corp. after finding each company had breached the Telecommunications Act during a long-running dispute over calls to the 867 area code. The regulator on Friday put out a call for public comment asking whether a financial penalty was appropriate and if so, what amount it should total, after finding in a separate decision that both companies had breached the Act. The CRTC was scathing of the behaviour of both Iristel and Telus throughout the dispute, finding both parties had “acted in a way that was self-serving.” “Such behaviour, which undermines the establishment of an orderly telecommunications system in Canada and the efficiency and competitiveness of that system, cannot be tolerated,” the regulator said in its decision. Iristel, Telus and Rogers Communications Inc. have been sparring over calls to Iristel’s 867 telephone numbers since 2016, when Rogers accused Iristel of engaging in traffic stimulation, prompting the regulator to order Iristel in December 2017 to cease the use of 867 area code numbers to connect callers to a Toronto-area radio station audio stream. In August 2018, Telus filed a Part 1 application alleging that Iristel had resumed stimulating traffic shortly after the decision and arguing that the regulator didn’t go far enough to stamp out the practice. Iristel hit back with a Part 1 application of its own a few days later, alleging that Telus was deliberately causing some calls from Telus users to Iristel end users to fail. Iristel sued Telus in October 2018, seeking $135 million it said it is owed for the terminated phone calls. That legal action was put on hold by the Ontario Superior Court in April last year while the CRTC settled the dispute over the 867 calls. The regulator issued an interim decision in November 2018, requiring Telus to ensure calls between it and Iristel were completed, while also approving Telus’ request to set an interim rate for calls to and from Iristel’s operating territory, set at $0.038 cents per minute. In its final decision Friday, the CRTC retroactively modified Iristel’s long distance call termination rate finding the company had granted itself an undue advantage by allowing the use of 867 numbers by “certain customers based in distant locations.” Doing so increased the connection costs for other carriers and caused economic harm, while “generating revenue for itself through the resulting long distance call termination charges,” the CRTC said in its decision. The CRTC set Iristel’s new long distance termination rate -- which will apply retroactively from Nov. 23, 2018 once finalized -- at $0.0098125 cents per minute, a 74 per cent reduction from interim rate of $0.038 cents per minute. That rate will be made final on Nov. 16 unless Iristel submits a tariff notice supported by a cost study. In its decision, the CRTC said the lower rate would “significantly reduce the incentive for traffic stimulation” in relation to 867 telephone numbers. The regulator noted setting a long distance termination rate specific to Iristel within the serving territory of BCE Inc.’s Northwestel was a departure from its usual rate setting approach for competitive local exchange carriers (CLECs) but said it was justified in light of the “pattern of inefficient routing; unnatural traffic growth; and the nature of the market that has developed and continues to develop in the North.” The CRTC also found Telus’ decision to reduce the capacity of certain toll circuits between May and November 2018 unjustly discriminated against Iristel, Ice Wireless and the customers of both Iristel and Telus by “by deliberately reducing the ability to complete calls to telephone numbers in the 867 .” Reducing the toll circuit capacity did not impact 911 calls, but could have affected long distance emergency calls, personal, family and work related communication, the regulator said in its decision. “There are provisions in the tariff for the cancellation of an agreement or the disconnection of a service, and there are avenues available for Commission direction to stop the offending activity. It is not open to to take matters into its own hands,” the CRTC said. Iristel CEO Samer Bishay posted on Twitter Friday morning that the CRTC did not consider all the facts properly, and said the company would be appealing the decision as it was “unjust, unfair and certainly doesn’t promote facilities-based competition.” Telus did not respond to a request for comment. -- With reporting by Adam Langenberg at alangenberg@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

CRTC proposes fines for Iristel, Telus over ‘self-serving’ conduct

News | August 14, 2020

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CRTC proposes fines for Iristel, Telus over ‘self-serving’ conduct

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