Execulink said rate reduction would improve business case for disaggregated adoption
By Ahmad Hathout
Bell and Rogers are accusing Quebecor of trying to relitigate issues on the disaggregated regime outside of the CRTC’s existing proceeding in the matter, adding the parent company of Videotron and Freedom is flip-flopping on a regime it previously thought should have been abandoned.
Quebecor filed a Part 1 application in December asking the regulator to align the access rates to large last mile fibre networks for both disaggregated and aggregated regimes in order to remain competitive. Quebecor pointed to the costs of the disaggregated packages – which don’t include the middle transport mile – as nearly twice the cost of the rates Bell filed for temporary last mile fibre access under the bundled aggregated regime, which is currently being challenged in court by the national telco.
And because of that legal challenge, Quebecor said that leaves competitors stranded with the higher rates under the disaggregated regime, which it said has been interim for more than six years and are all “excessively high.”
But in response to the application this week, Bell and Rogers have said Quebecor is trying to get around the existing process by filing a separate application when there is a live file in the name of the wholesale internet review already before the regulator. That live file includes questions about whether the regulator should make the current interim rates for the disaggregated regime final, if it should reduce those rates, and how costs should be recovered.
The national telecoms said Quebecor didn’t propose reducing the rates of the disaggregated regime likely because it wanted the disaggregated regime gone altogether.
Trying to come back and ask for a reduction in the rates via a separate mechanism “constitutes an abuse of process” in the words of Bell and an “end-run around the procedures” in the words of Rogers.
“It is not credible that a service that Quebecor Media despised just six months ago would suddenly become the keystone of a competitive wholesale regime or become essential to Quebecor Media’s commercial objectives, which it describes as the offering of bundled services outside Quebec,” Bell said in its reply, adding Quebecor had submitted those disaggregated comments after it had purchased VMedia and Freedom, so it knew about the subsidiaries’ needs.
Bell added that Quebecor’s comparison of the different internet speed costs between the two regimes is not apples-to-apples because the two regimes are completely different. It added that the aggregated rates were crafted on an expedited process, further making such a comparison inappropriate.
Rogers said the commission has previously rejected what the CRTC called a duplicate process when it threw out an application by investment firm Globalive on the issue of wholesale roaming because it already had a live file on it.
Competitive wholesalers TekSavvy and Execulink, by contrast, agreed with Quebecor’s request.
TekSavvy argued that disaggregated rates should be at most be the same as those under the aggregated regime simply because – all facilities being the same – the transport facilities are removed.
The competitor pointed to the bundled access rate for speeds of up to 8 Gbps being $78.03 per month versus the unbundled access rate for the same speed and 8 Gbps of $121.79.
“Therefore, as the Application points out, the access rates of the disaggregated model should accordingly be at most the same as the access rates of the aggregated model,” TekSavvy said. “Or, to the extent that Bell’s monthly access rates incorporate any costs associated with transport elements, they should be lower.”
TekSavvy argued that Bell’s monthly interim access rates for the disaggregated last mile services are “set 56 to 77% higher than the equivalent interim aggregated rates,” citing Bell’s Report on the Economic Valuation for the Introduction of Disaggregated Broadband Service, Fibre to the Node of January 9, 2017.
“It is difficult to envision a rationale in which these disaggregated rates could qualify as ‘just and reasonable’ as required under section 27(1) of the Act,” TekSavvy said, adding Bell admitted there are “several flaws with its current interim disaggregated rates.”
As a result of these higher rates, TekSavvy said it is being penalized for investing in disaggregated facilities.
The telecom had come out and said it wasn’t for sale after the CRTC announced an interim regime that would force Bell and Telus to negotiate last mile fibre access with competitors under the aggregated regime.
When the CRTC announced an interim regime for access to last mile fibre under the aggregated regime, TekSavvy said it was a positive development. However, it added that concerns persisted, including the limited geography of the regime to Ontario and Quebec and the rates still being higher than the retail prices that the telcos charge their own customers.
Execulink said the fact that the CRTC approved Bell’s lower interim aggregated rates suggested that they are “directionally correct,” thus making the rate differences between the two regime – given the lack of transport on disaggregated – “unjust and unreasonable” and that Bell “is currently enjoying an undue advantage vis-à-vis its wholesale customers/competitors.
“The implications for retail market competition are clear,” it said, adding that it is currently “only days away from migrating an entire market’s customer base” over to Bell’s disaggregated service.
“The rate relief proposed by Quebecor in its application would significantly improve the business case for serving these customers and advance competitive market forces in the areas where Execulink uses Bell Canada’s disaggregated wholesale highspeed access service for both copper and FTTP customers,” its said.
The Public Interest Advocacy Centre filed a submission in support of Quebecor’s application.
“Mandating access to aggregated wholesale HSA services through FTTP can increase
competition in the market,” PIAC said in the application. “However, rates for disaggregated wholesale HSA services must also be just and reasonable to protect wholesale users, who will in turn offer competitive retail services. In line with the 2023 Policy Direction, the Commission must adjust the telecommunications framework to ensure just and reasonable rates ‘by making proactive adjustments.’
“Granting Quebecor Media’s Part 1 Application and setting disaggregated interim rates at the same rate as aggregated is one way the Commission can make those proactive adjustments while upholding the key objectives of the 2023 Policy Direction.”
