By Denis Carmel
Several Internet service providers and related groups have now officially weighed in on TekSavvy and the Competitive Network Operators of Canada’s (CNOC) petitions to the Governor in Council, requesting cabinet overturn CRTC Decision 2021-181.
Unsurprisingly, competitive high-speed access (HSA) providers appealed CRTC Decision 2021-181, which reversed the Commission’s own Decision 2019-288, setting final rates on HSA. The rates had been interim ones since 2016.
This reversal came after the Federal Court of Appeal confirmed the CRTC’s 2019 decision and the Supreme Court denied the incumbents’ appeal to the Highest Court. It also came after the government refused to send the decision back to the CRTC.
Unsurprisingly members of CNOC endorsed CNOC’s petition.
The impact of the CRTC decision on Distributel, whose CEO is the chairman of the board of CNOC, includes that the company eliminated price reductions introduced after the 2019 decision and applied rate increases.
“We have had to remove our popular 150Mbps service offering from the market as the rates for that service increased by 42% as a result of the Commission’s new Decision. That increase would require us to sell that service at a loss in order to compete,” Distributel stated in their intervention.
VMedia, for its part, argued the 2021 “Reversal Decision” was “not supported by any substantive new quantitative data or evidence. The CRTC essentially stated that it got it wrong in the Decision but said it would not go to the trouble of showing how it got it wrong, as it would be too time-consuming and pointless in the face of the looming transition to a disaggregated fibre to the home framework.”
Start.ca said the 2019 decision resulted in $3 million in savings for its customers and doubling speeds for many plans.
But “the reversal in CRTC 2021-181 has cost us $6 million dollars in just the period between the final 2019 rate decision and the time in which it was reversed.”
And “we were forced to cease offering many speed tiers that were no longer financially viable; increase the service pricing to our customers; significantly scale back investment plans for our fibre facilities and infrastructure; and exit the recent ISED 3500MHz spectrum auction early,” Start.ca went on.
CIK Telecom indicated “our entire FTTH ongoing at Gravenhurst has been suspended as well although we have bought the land to build the POP and finished fiber network design.”
“Beside losing the refund for facility investment, in the new decision, CRTC even raised the rates for some of most popular speeds such as 150M on Rogers from $34 to $49, Videotron 100M from $28 to $37. This is causing we are not able to compete with them as they are selling below our cost. We are losing 300–500 customer per month right now and not any profit we can use to invest on facility,” CIK Telecom continued.
Coextro said that for years while it awaited the ruling it “was forced to operate based on the new rates, as every reasonable person, including our customers, expected the original decision to remain largely un-changed.”
The company has since had to cancel the “final phase of bringing high-speed services to the Chippewas of Georgina Island, with plans to bring services to more underserved areas of Ontario that the Incumbents have ignored.”
Also, additional local hirings were cancelled and they had to implement rate increases.
The comments provided by the Public Interest Advocacy Centre (PIAC) were different since the impact is felt on a different level.
They take issue of the fact that the CRTC in the 2021 decision, declined to proceed with a reexamination when they realized that mistakes had been made and decided to make the 2016 rates final: “It is the view of the petitioners and PIAC that the CRTC’s reluctance to reconsider the rates afresh is a dereliction of its duty to decide and therefore that legally it may remove the Commission’s jurisdiction. One cannot claim to be regulating and not regulate.”
It also takes issue with the Cabinet decision of 2020, which they dubbed the “dismissal with a message”.
In it, the order-in-council read that the government “considers that the rates do not, in all instances, appropriately balance the policy objectives of the wholesale services framework and is concerned that these rates may undermine investment in high-quality networks, particularly in rural and remote areas.”
PIAC argued the CRTC took the message wrong: “In plain English, the CRTC freaked out. TD 2021-181 was a rushed, ill-considered gallop to judgment that defied facts and law in its overzealous attempt to implement what the CRTC wrongly and partially understood to be Cabinet’s “instructions” to utterly reverse the wholesale rates. It is now up to Cabinet to attempt to clean up the mess that the Commission has made.”
They compared it to the four knights of Henry II, “who, upon hearing the King’s exasperation at the actions of Archbishop Thomas a Becket, overreacted and took this as an order to cut off the saint’s head in an apparent misinterpretation of the monarch’s wishes—and creating a much larger problem for the King.”
The Cable Carriers (Eastlink, Cogeco, Rogers, Shaw and Videotron) with no surprise, opposed the competitors’ petition. Their arguments are familiar to those who have followed all the steps of the process and are similar to those served to the Federal Court of Appeal, Cabinet and the CRTC itself, in their Review and Vary application.
Bell offered that the competitors’ rates are now lower than in 2016.
The Cable Carriers and Bell went further and provided a defense of Chairman Ian Scott who had been accused by TekSavvy of “unacceptable bias” because of comments he made publicly and the fact that he met with Bell’s CEO in December 2019 while the issue of HSA was being considered by the Commission.
“In any event, the identified conduct does not come close to establishing a reasonable apprehension of bias, let alone actual bias,” the Cable Carriers’ comment reads. “Chairperson’s Scott’s statements do nothing more than repeat… basic and well-founded principles.”
Bell added: “Bias is a severe allegation which challenges the integrity of the CRTC and of its members who participated in Decision 2021-181. As a result, it cannot rest on mere suspicion, conjecture or insinuations. It requires clear proof, which is utterly lacking.”
“The Bell meeting with Chairman Scott in December 2019 was also properly reported and discussed broadcasting matters. The report of this meeting has been publicly available since shortly after the meeting occurred and well before the Petitioners filed their interventions in respect of the R&V Applications in February 2020,” said the Cable Carriers.
Government has until May 26, 2022, to render its decision.
Staff at ISED could have access to confidential information filed with the Commission, which competitors did not have access to, and could determine if the Commission did indeed make a mistake and as a result, Cabinet could “vary or rescind the decision or refer it back to the Commission for reconsideration of all or a portion of it,” reads the Telecommunications Act.
