Incumbents say claim they disadvantage resellers on tech work is false
By Ahmad Hathout
GATINEAU – Despite an ongoing judicial review of lower wholesale rates the CRTC set last summer, the Regulator’s ability to set new emergency rates is unaffected by the case and the Commission should install new, lower fees for resellers, ISP TekSavvy is arguing.
On Monday, TekSavvy said in a press release the CRTC should consider emergency measures to reimpose lower rates which third party internet access providers like itself pay the incumbents to use network space. The Federal Court of Appeal is currently scheduled to hear an appeal on wholesale rates in June, after applying a stay to already lower rates set by the Commission in August. (The matter is also in front of federal cabinet and incumbents have asked the CRTC to review and vary the decision. TekSavvy has also taken the fight to the Competition Bureau.)
Last month, the Chatham-based company said it was laying off 130 staff and increasing prices by $5 starting in May as a result of the court’s decision to halt the final August rates and retroactive payments to TPIA companies the decision also called for, combined with the effects of the Covid-19 pandemic.
“I don’t think there’s anything that would prevent the CRTC from coming out with emergency rates,” TekSavvy’s vice-president of regulatory and carrier affairs Andy Kaplan-Myrth said over the phone. “The Federal Court order… did not say the CRTC cannot continue to set rates, either for new speeds or existing speeds, and I just don’t think the stay limits the CRTC’s existing powers.”
The public plea follows a call on Thursday by Conservative MP and innovation shadow minister Michelle Rempel Garner for Innovation Minister Navdeep Bains to order the CRTC to address the issue. “At a time when everyone is being required to work and attend school at home, it is no longer a choice to have a reliable and affordable internet connection,” she said in a post on her website. “Yet, frozen wholesale rates are forcing Canada’s smaller internet service providers (ISPs) to hike prices, lay off staff, may ultimately have to close shop, and may have to cut service off to existing customers.”
Garner noted some options the CRTC could issue, including: an emergency Covid-19 directive where the incumbents must temporary respect the August 2019 rate decision; changing the billing structure so that resellers are paying flat rates for capacity; and not accepting interest on payments due from the resellers for network space until the virus crisis passes.
Matt Stein, head of the Canadian Network Operators Consortium (CNOC), an organization representing smaller internet providers, said in an interview that his organization last week asked the incumbents for capacity cost relief during this period, but they were not receptive. The way it currently works is that resellers order a chunk of bandwidth capacity from incumbents but only pay for some of that capacity for use. CNOC’s pitch was to allow the resellers to temporarily use the remaining capacity that they ordered but haven’t yet paid, for the duration of the pandemic, but that was rejected.
Rogers said it denied that request because the change would require much more than just a simple flip of a switch, as the company said it has limited capacity in its local distribution networks and it would’ve cost the company to increase capacity.
CNOC has also already requested – and is awaiting an answer – from ISED to subsidize the cost of incremental capacity by 50% for the duration of the pandemic.
Monday’s press release comes after TekSavvy and CNOC filed a letter to the CRTC last week asking it to investigate allegations the big incumbent providers are prioritizing their own customers for installs, repairs and maintenance. Since the resellers use the incumbents’ network capacity, they also rely on their technicians to service those connections.
Changes to processes due to the pandemic include new customer screening measures and new installation, repair and timeline measures. The result, the independents allege, is a “significant increase in failed orders… significant increases in how long it takes HSA service providers to process our service orders, while some carriers have apparently extended self-install options for their retail services in order to continue to install retail services while mitigating risks of physical contact.”
“If the CRTC isn’t even going to be aware of the incumbents changing the rules here, then it just creates an opportunity for them to do whatever they want, which is going to happen at our cost.” – Andy Kaplan-Myrth, TekSavvy
Over the course of the past few weeks, TekSavvy and CNOC claim the incumbents have notified the smaller providers, but not the CRTC, of changes to technician services in light of the Covid-19 crisis that they say disadvantage their own customers. They’re asking the CRTC to enforce rules that would require the incumbents to notify the CRTC of any such changes so it can apply oversight.
“Without any regulatory oversight, then those who are in a position of power have the ability to use that power to the detriment of the other sides, so if the CRTC isn’t even going to be aware of the incumbents changing the rules here, then it just creates an opportunity for them to do whatever they want, which is going to happen at our cost,” Kaplan-Myrth said.
TekSavvy, which rents capacity from Rogers and Bell, said it has sent some of the notices of changes to the CRTC to make them aware of the issue.
In an emailed statement to Cartt.ca, Rogers said the allegation it is disadvantaging resellers is “inaccurate.”
“We’re working around the clock to deliver essential services and keep Canadians connected in the safest way possible for our teams and all customers, and to support our ongoing efforts to lessen the impact of COVID-19, we introduced a safe, easy and no contact way to install or repair internet and TV services – customers of resellers are not disadvantaged in any way during this transition,” the Rogers statement said.
“These comments are inaccurate and misrepresent measures put in place to protect all customers and team members during this public health crisis.”
Telus spokesman Richard Gilhooley said in an emailed statement TekSavvy and CNOC are trying to “politicize” the crisis.
“Unfortunately, some stakeholders are attempting to politicize this public healthcare crisis, and the accusations levied by TekSavvy are not only categorically false as they relate to Telus, but they are also irresponsible in the context of this pandemic,” the statement said, noting that the telecom has also moved to institute changes, which equally apply to both Telus’ and the resellers’ customers, to protect its workers from the virus by no longer going into residents’ homes.
“Since telecommunication services are critical to the functioning of our communities, we are continuing to ensure that our resellers’ customers remain connected to the people, information, resources and health services they need, while at the same time, protecting community safety and well-being,” he added.
Bell spokesman Marc Choma said in an email the company’s focus has been on “making the capacity investments necessary to meet increased network demand during the COVID-19 crisis.
“Bell has also taken all appropriate steps to protect the health and safety of customers and team members, including installations and repairs for wholesale customers. As is the case for our retail customers, technicians will complete all necessary work outside the residence or business and will call the customer about how to connect equipment. Technicians will only enter the premises when absolutely necessary following strict safety protocols. All customers will be screened for any possible Covid-19 exposure, and appointments will be rescheduled if any risk is identified.”
Technically, these notices by TekSavvy and CNOC to the CRTC are not applications in the traditional sense, where the regulator would give an opportunity for the targets to respond, Kaplan-Myrth said. In trying times, he continued, the CRTC needs to be more “flexible” to impose measures in a way that sizes up to the urgency of the situation.
The CRTC has delayed a number of proceedings, in line with a number of virus-induced stoppages resulting from measures requiring people to distance themselves from each other to protect against the communicable disease.
Finally, any speculation about TekSavvy seeking possible bankruptcy protection are unfounded, Kaplan-Myrth said. The company said in a March 21 tweet that it had stopped accepting new customer orders as it transitioned its staff to work from home, but it has since resumed accepting new customers, warning install times might take longer than normal.
