By Ahmad Hathout
Bell’s joint request of the CRTC to permanently block the three largest telecommunications companies from accessing its bundled fibre facilities is an attempt to nullify the competitive impact of the interim access regime, Rogers and Telus argued earlier this month.
The country’s largest telco partnered with wholesale competitors to ask the regulator in a procedural request to clarify that the Big 3 are ineligible to access the bundled middle- and last-mile facilities of Bell and Telus before the May 7 deadline to implement the interim regime in Quebec and Ontario. The CRTC did not explicitly say that Bell, Rogers and Telus were ineligible to ride on the networks during this period, and it said it still has to make a decision about whether the regime should be a permanent fixture and whether the Big 3 would be eligible.
In the original application, Bell, Cogeco, Eastlink, TekSavvy, and indie rep the Competitive Network Operators of Canada argued that the Big 3 should be denied access to the bundled regime on a permanent basis because it would cripple third-party competitors who must compete with deeper-pocketed rivals and would distort the market to the detriment of competition.
But Rogers and Telus are not buying the motive for the application, according to their separate responses to the joint application.
Telus argued that Bell allegedly knows that if the CRTC determines before May 7 that the Big 3 cannot access the bundled fibre regime on a permanent basis, then the incentive for it to access the regime on an interim basis would disappear. “This is the obvious substantive result that the Applicants seek,” Telus wrote in its response, calling the application a “collateral attack” on the interim regime.
Telus alleges that the collateral attack here is Bell finding another way to nullify the interim regime after going through the proper appeal routes. Bell challenged November’s interim regime decision to cabinet and the Federal Court of Appeal, the latter saying it would hear its arguments but denied its stay because it said Bell didn’t prove it would be irreparably harmed without the court order.
On this basis, Telus argues the CRTC must deny the application because the alleged collateral attack is improper.
“The Application…represents a concerted anti-competitive, anti-consumer and protectionist effort which, if endorsed by the Commission, will deny consumers…the benefits of the competition brought by out-of-territory, facilities based carriers,” Telus said.
While the Vancouver-based telco has argued that facilities-based providers should be banned from accessing other carriers’ last-mile fibre networks in their own serving territory, it said it should have that access outside of its operating territory for the sake of competition.
That last bit was met with jeers from at least Rogers, Bell, Eastlink, and Cogeco, who said this would make it difficult for competitors to continue operating in the market.
Rogers pushed back against the joint application this month on the basis that cable carriers like itself have been shouldering the burden of the wholesale internet regime, with roughly 75 per cent of all wholesale-based subscriptions on cable networks.
By allowing Bell to avoid having to lease its bundled fibre facilities to the largest providers, Rogers argued the market would remain slanted in that way.
“Asymmetrical wholesale customer exclusions must be rejected because they are inequitable, distort competition, and undermine investment, contrary to the objectives of telecommunications policy and the Policy Direction,” Rogers said in its reply.
“In effect, Bell is seeking to protect its [fibre-to-the-premises, FTTP] facilities from wholesale access by Rogers and Telus at least for the duration of the temporary mandate, while it continues to ride on mandated aggregated wholesale HSA services,” it added.
It continued: “Should the Commission wish to entertain an expedited decision on customer exclusions from mandated wholesale HSA service, the decision must address wholesale access to [hybrid fibre-coax] facilities as well. This is required by the Policy Direction and…is the only possible context in which a decision on wholesale customer exclusions could mitigate market distortions.”
The CRTC declined to mandate bundled access to the cable companies’ fibre facilities because they are newer developments with limited reach relative to the telcos’ FTTP builds.
When the Federal Court of Appeal determined that a stay of the CRTC’s November decision would not be granted, it made that determination based on the standard three-part legal test for stay requests known as RJR-MacDonald, which requires the applicant to prove: the issue is serious, it would suffer irreparable harm if a stay is not granted, and the balance of convenience is weighed in the applicant’s favour versus the public interest.
Telus alleges this “procedural request” by Bell and competitors is actually just another review and vary application, which wouldn’t have the components to be a successful one because it doesn’t meet the components of said three-part test. Even without that, the review and vary deadline has passed by the time it filed this request, it said.
Third-party competitor CIK Telecom had previously filed a Part 1 application asking the CRTC to clarify that the Big 3 couldn’t access the interim last-mile regime, but the regulator turned down the application in early March. Bell and the competitors argued they didn’t have an opportunity to provide a response to that application before its rejection.
Telus argued that the joint argument is trying to relitigate the essence of the CIK application, which allegedly amounts to an abuse of process. Additionally, Telus says Bell had the opportunity to raise this issue during the interim proceeding and didn’t.
“The Commission has the power to dismiss a proceeding as an abuse of process where it is, in essence, duplicative of an earlier proceeding,” Telus said. “The Application, while packaged differently, is an effort to re-litigate issues already decided by the Commission in the Interim Decision and in respect of the CIK Application.”
Telus also argued that determining whether the Big 3 will have access to the bundled fibre facilities on a permanent basis would prejudge the wholesale internet review, which it said is improper in an administrative law context, absent exceptional circumstances.
The joint application received support from indie rep Canadian Communications Systems Alliance, the British Columbia Broadband Association, Novus, and CIK Telecom. The supporting submissions argued that competitors would get crushed by the weight of the deeper pockets and brand power of the large three if allowed to ride on those premium networks.
The Manitoba Coalition said the application should be denied because the essence has already been argued in the CIK application.
Bell has an outstanding petition to cabinet to overturn or send back the interim decision to the CRTC. Cabinet has until November to do something or nothing about it.
Earlier this month, Bell filed its preview arguments before the Federal Court of Appeal, which will hear from the telco that the CRTC was not right to rely on the government’s policy direction when it made the interim order because there is an inherent contradiction with the Telecommunications Act.
The telco’s CEO Mirko Bibic said in March that it would be “foolish” to think the CRTC won’t mandate access to fibre facilities.
The million-dollar question that will determine what types of “difficult” business decisions Bell makes, he said, is: who gets access?
