Cabinet should not intervene in non-mandated service: Rogers

Rogers Communication Inc. is asking the federal government to reject City Wide Inc.’s request to force Bragg Communication Inc.’s Eastlink to relocate its third-party internet access (TPIA) point of interconnection (POI) to a more central location in Halifax, N.S, arguing that it would run contrary to established industry practices and it is not for the cabinet to intervene in non-mandated services. Eastlink is also arguing that allowing a relocation would set a dangerous precedent. “Such decisions must be left to the carriers as they must be able to design and build their networks to their individual specifications,” Rogers wrote in a Sept. 12 response to a petition before the governor in council. Rogers argued that if City Wide has an issue with Eastlink’s POI, it can invest in its own transportation facilities. “Although such an investment may have some inherent risk, that fact alone does not merit Commission, let alone Cabinet, intervention into a non-mandated service,” Rogers stated. Eastlink told the governor in council that granting the request would “set a gravely concerning precedent which would severely alter the wholesale high-speed access services framework, would impact regulatory certainty relied on by industry, and ultimately act as a disincentive for facilities-based providers to invest in and expand their networks.” Eastlink said ruling in City Wide’s favour would leave facilities-based providers at the mercy of their competitors to determine the configuration of their networks for their own convenience. “Not only will this likely lead to inefficient network configurations, but is a disincentive for facilities-based providers to continue to invest in and expand their networks,” Eastlink wrote in its Sept. 12 response. In March the CRTC denied an application by City Wide requesting it order Eastlink to move its TPIA POI to downtown Halifax. The commission determined that Eastlink’s TPIA point of interconnection in Pennant Point – located 30 km from downtown Halifax – subjected City Wide to a disadvantage but that it was not undue or unreasonable. City Wide escalated its grievances to the Governor in Council, arguing that the commission erred in its determinations. City Wide argued in the petition that the rate of growth of its customer base has been “declining significantly and persistently in recent years,” hindering its ability to invest in its own networks and to sustain affordable services in Nova Scotia. The responses to the petition we made public last Thursday. Rogers argued that the CRTC acknowledged that “that the availability of suitable and economically feasible transport options” is only one of several criteria to determine a POI location. Rogers argued that companies must also balance the carrier’s existing network configuration, the extent of any modifications needed for each POI location, future network plans as well as the age, location, and amenities of the facilities in each proposed location. “City Wide’s Petition ignores all these considerations and instead asks the GIC to compel Eastlink to design critical network infrastructure for the singular economical benefit of City Wide,” it wrote. “This is the heart of the decision that City Wide fails to consider. The Act only contemplates intervention if the preference or disadvantage is undue or unreasonable. Rogers reiterated arguments it made from the original CRTC proceeding in which it allegedly found three suppliers, including Eastlink, that were willing to submit a quote to build or lease fibre to the locations in which City Wide operates. Purple Cow Inc., a Nova Scotia internet service provider, submitted a response in favor of City Wide’s petition, confirming that it too found there are “no other economically and practically feasible means” of connecting to the POI. “Purple Cow is especially baffled by the Commission’s unsubstantiated determination that transport costs have not been a significant barrier to competition and the delivery of competitive Internet access to consumers. This finding rests on a superficial observation regarding increases to City Wide internet customers and TPIA end-users on Eastlink’s network,” the company said. City Wide had argued to the governor in council that the rate of growth for its customer base has been “declining significantly and persistently” in recent years, along with its ability to invest in its networks and innovative services. “Purple Cow’s experience corroborates City Wide’s submission that Eastlink’s rates for transport services to the Pennant Point TPIA POI consist of a significant barrier to competition. Indeed, Eastlink’s inflated transport rates hinder our ability to innovate and invest in our operations with a view to competing more effectively, to the ultimate benefit of Nova Scotian consumers,” it wrote. Eastlink and Rogers argued that growth is still growth, with the former alleging that TPIA customers including new entrants have successfully grown since the TPIA model has been introduced at Pennant Point, along with the number of TPIA end-users on Eastlink’s network. It said City Wide’s economic analysis is outdated by using rates it no longer pays and by making comparisons to transport costs in areas where Eastlink has no viable POI facility. “The fact is that if City Wide is unhappy with our rates, they are free to build their own transport infrastructure or find an alternate supplier. City Wide simply dismisses the idea of building their own transport infrastructure as inefficient. The reality is City Wide is happy for others to incur the costs to build the infrastructure, as long as they don’t have to pay rates that reflect that cost,” Eastlink wrote. The Public Interest Advocacy Centre (PIAC) and the Competitive Network Operators of Canada (CNOC), in separate submissions submitted last month, said the government needed to “urgently” act on the petition in the name of competition. Pacquet Mayor Vera Norman submitted a petition on behalf of the Newfoundland and Labrador town arguing that Eastlink’s practices are “anti-competitive” and that rejecting City Wide’s petition would be a “disastrous public policy outcome for consumers.” – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Paul Park at ppark@thewirereport.ca

Cabinet should not intervene in non-mandated service: Rogers

News | October 3, 2022

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Cabinet should not intervene in non-mandated service: Rogers

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