Iristel fights traffic stimulation finding, proposed $1.25M fine

Iristel Inc. says the CRTC wrongly determined it was stimulating traffic to the 867 area code and “fundamentally misunderstood” the role of a tariffed rate it significantly reduced in a bid to stop the practice, the company has argued in a review-and-vary application. In an application dated Sep 2. but posted to the CRTC’s website on Tuesday, Iristel urged the CRTC to overturn its August decision that Iristel was involved in traffic stimulation and abandon a process proposing a fine of up to $1.25 million on Iristel. The application also asks the CRTC to refrain from altering Iristel’s long distance termination rate or imposing a fine on the company until the regulator has reviewed its initial decision. In its final decision on a long running dispute between Telus Corp. and Iristel over calls to the 867 area code last month, 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 August decision. The CRTC set Iristel’s new long distance termination rate - set to apply retroactively from Nov. 23, 2018 - at $0.0098125 cents per minute, a 74 per cent reduction from the interim rate of $0.038 cents per minute. It will be made final on Nov. 16 unless Iristel submits a tariff notice supported by a case study. But in its review-and-vary application, Iristel says the CRTC was wrong to find Iristel’s tariffed Interexchange Service Provider rate provided the company with an incentive to stimulate traffic. That tariffed rate is only available to carriers who interconnect directly with Iristel in the country’s north, Iristel claims in its application. “To date, no carrier has done this and thus no carriers pay, or ever have paid, Iristel’s Tariffed IXSP Rate,” the review and vary application states. Further, that rate has no connection to the agreements Iristel reached with Telus and Rogers Communications Inc. where it terminates traffic generated by the end-users of those companies, Iristel claims. Iristel said it would suffer irreparable harm if carriers interconnected directly with it at the lowered rate, which it said was set at a low enough price that may incentivize carriers to do so. “Iristel supports investments in the North by all carriers, but not pursuant to the revised Tariffed IXSP Rate, which is likely well below Iristel’s costs, and will cause inefficient entry by other carriers and irreparable harm to Iristel,” Iristel’s application states. Iristel also claimed the CRTC had misinterpreted Iristel’s traffic data and “committed a serious error of fact in determining that Iristel is still engaged in traffic stimulation,” stating its termination of all revenue sharing agreements following an interim ruling in 2017 meant that it “had ensured that it could not be engaged in what the Commission considered to be traffic stimulation.” It also suggested the regulator develop a clear framework for traffic termination so local exchange carriers could better understand their rights and obligations, a proposal Iristel had previously opposed. The CRTC is also proposing a fine of up to $1.25 million on Telus, finding its decision to reduce the capacity of certain toll circuits between May and November 2018 unjustly discriminated against Iristel. Telus spokesperson Richard Gilhooley said last month that Telus was “surprised and disappointed that the CRTC would consider assessing an Administrative Monetary Penalty against TELUS and intend to oppose it vigorously,” stating the company was considering whether to appeal the decision. A review and vary application from Telus is yet to appear on the CRTC’s website. Iristel has been sparring with Telus and Rogers over calls to Iristel’s 867 telephone numbers since 2016, when Rogers accused Iristel of engaging in traffic stimulation, which prompted 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. Telus filed a further Part 1 application in August 2018 that claimed Iristel had resumed stimulating traffic shortly after that decision and called for further action to stamp out the practice. Iristel hit back with its own Part 1 a few days later regarding the reduction of toll circuit capacity, claiming Telus was deliberately causing some calls to Iristel end users to fail. It sued Telus in October 2018, seeking revenue it says 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. -- Reporting by Adam Langenberg at alangenberg@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Iristel fights traffic stimulation finding, proposed $1.25M fine

News | September 8, 2020

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Iristel fights traffic stimulation finding, proposed $1.25M fine

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