GATINEAU – A day after getting a month delay to file its Review and Vary application to the CRTC on the final rates it set for aggregated wholesale high-speed access services, Bell Canada filed a an official Petition to Cabinet to overturn the CRTC Decision – as did the incumbent cable providers.
Bell had already filed an appeal to the Federal Court of Appeal, on September 16, too.
In its petition (officially to the Governor-in-Council) Bell is asking Cabinet to: “restore the wholesale rates that were in place immediately prior to the issuance of the Order, with no retroactive effect,” the petition reads. “Our request is reasonable and easy to implement, without requiring the Government to engage in complex rate setting,” adds the document.
“As of August 2016, Videotron was selling its flagship tier, Internet Giga, for $145.95. The Commission then set, in its August Order, wholesale access rates to Videotron’s gigabit service at $14.30,” Bell adds, to demonstrate what it sees as one of the Commission’s main blunders. Cartt.ca has already written about this here and here.
What also hurt was the CRTC decision came a week after the Competition Bureau concluded its own market study on High-Speed Internet, said Bell, quoting the Bureau: “The wholesale access regime appears to be fulfilling its promise to bring about greater consumer choice and increased levels of competition for Canadian consumers.”
The Bureau report was something Bell and the cable companies both stressed to the FCA, too.
Bell goes further on the retroactive payments, saying, “this forces Carriers to refund hundreds of millions of dollars to Resellers, exceeding in the case of Bell, a year’s worth of projected wholesale high-speed access (HSA) revenues if the new rates remain in effect, for Resellers that have no obligation to pass any of this regulatory windfall on to their own customers.”
That said, some of them have made moves to pass on some of those gains.
“The net result of the Order therefore will be fewer communities served by high-speed networks.” – Bell Canada
Having said previously this CRTC decision will cause it to curb deployment of broadband in remote communities, Bell said it “originally planned for 800,000 homes, as a result of the Government’s Accelerated Investment Incentive initiative we expanded the program to 1.2 million households (a 50% increase).” However, “as result of the Order, we now have scaled back the program to 1 million households (a decrease of 200,000). The net result of the Order therefore will be fewer communities served by high-speed networks.”
“Failing to overturn the Order would also be a missed opportunity in Canada’s shift to a green economy and in our path towards reducing the nation’s carbon emissions,” Bell also contends.
“For instance, broadband-enabled audio and video conferencing can substitute for business travel, high-speed Internet access allows workers to telecommute and leave their cars at home, and IoT applications can optimize fleet management as well as smart city initiatives,” it argues.
“But the dramatic impact of these latest rate reductions raises our concern to a new level, especially when the investment situation is already difficult in Canada; foreign inflows into Canadian stock are down 75% over the past year. As well, Encana recently announced it was changing its name and moving its headquarters to the United States.”
Quoting a commentary published in Cartt.ca, it adds: “Former Commission Chair Konrad von Finckenstein (and now Chair of the consumer rights group, PIAC) rightly comments that while the Order may benefit Resellers, it does not benefit consumers,” in a column where he urged the CRTC to revisit the retroactivity portion of the decision.
“In addition, it does nothing for consumers. The money will go to small ISPs and not consumers and it is far from clear as to what portion will be invested in further network capacity, what portion will go to enhance profits and what, if any will be passed on to their customers,” reads the Bell petition, quoting von Finckenstein.
Illogical regulatory sequencing
It seems that the core of Bell’s “ask” is the following: Request the Government to order the CRTC to review, as the Regulator has already announced it would review its costing methodology.
“Yet, right after setting final rates for HSA services, the Commission proposes to embark (before March 2020, according to its plan) on a review of its approach to costing, of its own initiative, notably to ‘ensure that the rates that the Commission sets for wholesale services continue to be just and reasonable’,” reads the Bell submission, quoting the CRTC.
“If there is something potentially wrong with the Commission’s costing (and we submit that there is as we discussed in the previous section), then it seems puzzling that the Commission did not choose to correct costing before setting final rates for the most important wholesale services,” they conclude.
The Telecommunications Act states that Cabinet (which will be announced next week) should issue a decision on this petition before 15 August 2020.
