TekSavvy application: a test for new-look CRTC and competition landscape?

Is last week's Part 1 application from TekSavvy Solutions Inc. a last minute, Hail Mary pass attempt at blocking the all-but assured blockbuster merger of Rogers Communications Inc. and Shaw Communications Inc.? Or is it a significant intervention that heralds a shift in Canadian telecom regulatory policy? This is the million – or $26.2 billion – dollar question after the Chatham-Kent, Ont.-based wholesale internet service provider (ISP) filed its application with the CRTC, alleging that the arrangements between Rogers and Quebecor Inc. to help the latter launch its wireless service in the west amount to "undue preference" and a violation of the Telecommunications Act. The application is set to be included as evidence in Tuesday's Federal Court of Appeal hearing of the Competition Bureau's claim that the Competition Tribunal erred in law when it rejected the bureau's case in late December. For the executive director and general counsel of the Competitive Network Operators of Canada Geoff White, TekSavvy's application is a "dramatic," and part of a number of developments that have thrust the spotlight back on competition in the wholesale home internet sector. "2023 is the year where all we will be debating is: 'how can we fix home internet competition in Canada?' That's what the TekSavvy application is about. That's what the Industry committee's report on affordability and accessibility is about. That's what parliamentary industry committee hearing is about," White said in an interview with the Wire Report late last week. Indeed, on Friday in an interview with the Wire Report, new CRTC chair Vicky Eatrides said that when it comes to home internet, "we need to come up with a better model." "We know that because it’s not having the desired effect," she said, pointing to the 2022 edition of the Wall report showing rising broadband prices. One of the ways the CRTC could address home internet pricing, according to White, is the reopening of his organization's proposal for a resale framework for fibre-to-the-premise (FTTP). This step, the CNOC head said, would at least address the complaint in TekSavvy's application about FTTP access BCE Inc. is offering to EBox Inc. In December, Innovation Minister François-Philippe Champagne said that he would issue his ruling on the merger – generally thought to be the last of the three regulatory hurdles the merger needs to clear after the CRTC and Competition Tribunal – after "clarity in the ongoing legal process." But it remains unclear if TekSavvy's allegation to the CRTC that the proposed divestiture remedy contains a violation of the Telecommunications Act introduces enough legal uncertainty to pause the minister's deliberations. In a Sunday evening note, National Bank analyst Adam Shine wrote that "we'd be surprised to see the first action by Ms. Eatrides being to jump into the fray at the 11th hour of the regulatory review and slow or stop the process in order to sign off on Vidéotron's access arrangements with Rogers." At the same time, Shine did acknowledge the shifting regulatory winds on the issue of wholesale pricing, and wrote that in the Eatrides CRTC, "regulatory decisions would be expected to offer some assistance to wholesalers and smaller competitors rather than stimulate their consolidation which is what was triggered by the prior TPIA decisions." The CRTC did post TekSavvy's application to the telecom Part 1s section of the website Friday, indicating that the regulator would be entertaining the company's application, and would be accepting interventions until Feb. 21. "It will be pretty interesting to see what the new CRTC head does, and this is an early opportunity for her to shed some public light, despite being a very public process, these agreements that regulators really haven't been able to take a look at," former Competition Bureau special adviser and Canadian Anti-Monopoly Project co-founder Keldon Bester said in an interview with the Wire Report Friday. Globalive Capital Corp. chief legal officer Simon Lockie said in an interview that “it is clear that Rogers simply doesn’t care that its cozy deal with Videotron violates the Telecom Act,” and placed the onus back on Minister Champagne. “Rogers is making the dangerous assumption that Minister Champagne won’t care either,” he said. "To the extent that they're concerned that the off tariff agreement with Videotron could fall apart and Videotron/VMedia wouldn't be able to compete anymore, our application is putting that to the test," TekSavvy vice president of regulatory affairs Andy Kaplan-Myrth told the Wire Report Friday. — Reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca.

TekSavvy application: a test for new-look CRTC and competition landscape?

News | January 24, 2023

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