The company wants a broader review of off-tariff agreements
By Ahmad Hathout
OTTAWA – The largest independent telecom in Canada has filed an application today for the CRTC to review whether Rogers could provide Videotron wholesale access to its network at below market rates, a deal that was struck between the two companies as a sweetener for regulators to approve Rogers’s purchase of Shaw.
TekSavvy had already asked Innovation Minister Francois-Philippe Champagne this month to block the deal on the grounds that the wholesale deal was not allowed. And the Competition Bureau filed arguments to be heard in front of the Federal Court of Appeal on January 24 arguing that the Competition Tribunal, in approving the deal, overlooked the possibility that the wholesale deal could be challenged at, and nullified by, the CRTC.
Today, TekSavvy became the challenger. The Chatham-based company’s central claim is that while the CRTC has generally allowed off-tariff agreements (OTAs), it acknowledged that they do raise concerns related to potential undue preference and unjust discrimination under section 27(2) of the Telecommunications Act. As such, the CRTC has oversight of those deals “to the extent that they raise issues of undue preference,” TekSavvy said in its Part 1 application.
“These arrangements were not arrived at through negotiations based on natural market forces, but are instead an effort by Rogers to remove regulatory hurdles to its acquisition of another Incumbent, Shaw,” TekSavvy said. “The arrangement with Videotron is specifically designed to allow Videotron and its wholesale-based affiliate, VMedia, to better compete than it could using tariff rates.”
The company said that there are bound to be many more of these deals under the table, deals that are “symptoms of larger systemic issues.” That’s because, TekSavvy said, wholesale rates in Canada are “inflated.”
The CRTC had originally proposed in 2019 lower rates in which smaller independent ISPs purchased network space from the incumbents, but reversed course in 2021 after saying it found errors in the methodology. TekSavvy encourages the CRTC to either temporarily fix the wholesale rates or reinstitute the 2019 ones.
And if that cannot be done, then the commission should “void the OTAs in full” or extend these OTAs to all competitors on an interim basis, the company said.
TekSavvy notes in the application that the CRTC had requested information about OTAs in 2021, but did not have a formal proceeding on it. The company said this review is “long overdue.”
TekSavvy also alleges in the application that Bell is offering its newly acquired EBOX affiliate aggregated fibre-to-the-premises access, a regime that is intended for a future system wherein wholesale ISPs must separately purchase the transport (middle mile) portion of the network. It also accuses Bell of providing these services at rates lower than for competitors.
When asked for comment, Bell said it would review the application when it gets it.
“This behaviour runs afoul of not only the Telecommunications Act, but directly undermines the Government of Canada’s explicit policy objectives in its forthcoming Policy Direction,” TekSavvy said. “These include the goals of encouraging equitable application of the wholesale HSA framework, encouraging all forms of competition and reducing barriers to competition for new, regional and smaller telecommunication providers.”
When the Competition Tribunal approved the Rogers-Shaw merger last month, it pointed to the viability of Videotron as the fourth national wireless carrier, and noted Rogers’s commitment to providing the Montreal-based company access to its wireline network at below market rates.
Photo via TekSavvy
