Quebecor CEO asks, ‘Should we be surprised…?’
By Ahmad Hathout
OTTAWA – Bell has sent a letter to the Federal Court of Appeal backing Rogers’s appeal of the CRTC’s decision to choose Quebecor’s price to access the cable company’s national wireless network.
“The proposed appeal raises crucial issues relating to the ‘just and reasonable’ standard pursuant to which the CRTC sets the rates for a wide range of regulated telecommunications services, including the facilities-based MVNO access service mandated by the CRTC in 2021,” Bell, which isn’t a party to the matter, said in a letter dated August 31.
“These issues include the ability of a service provider in a regulated industry to recover reasonable costs of service and a reasonable rate of return within that standard,” the telco said in the letter.
Rogers filed an appeal in late August against the regulator’s decision to choose Quebecor’s rate during arbitration. The CRTC justified its decision by saying Quebecor’s rate on wholesale data would allow it to offer more data and more plans to better compete in new markets.
But it also reasoned that it didn’t need to ensure that Rogers made an immediate return on investment and that it is okay for the cable company to stomach a “modest or temporary loss” in its wireless segment because its other lines are profitable.
Rogers alleges the reasoning oversteps legal precedent in favour of policy preference, which could “insulate” the commission from legal challenges. As such, Rogers is appealing to the court on the basis that the decision runs counter to the “just and reasonable” provision under the Telecommunications Act.
Rogers also alleges the CRTC did not provide it with the proper documentation to show how it made rate adjustments or how Quebecor made its offer calculation, thus allegedly robbing it of a fair opportunity to challenge the methodology and participate in a fair process.
Bell is concerned, the letter suggests, that the decision by the CRTC holds precedential consequence for future final offer arbitration hearings on MVNO access to the national networks of the big three.
This is relevant because Bell is currently in MVNO arbitration proceedings with none other than Quebecor itself. “Bell is currently engaged in FOA with QMI and can confirm that similar legal and procedural issues are relevant to and highly important in that process,” Bell said in the letter.
The appeal “raises important questions about the process by which future FOAs conducted by the CRTC will proceed,” it said.
Quebecor CEO Pierre Karl Peladeau responded to the letter, asking, “Should we be surprised to see Bell backing Rogers on an appeal to a decision of the CRTC which promotes competition benefiting Canadians? Going against public interest is running deep into Bell’s DNA.
“The regulators – CRTC, Competition Bureau, and ISED – and the Government should keep this in mind when dealing with Bell,” Peladeau added in the post.
Earlier this year, Quebecor closed its acquisition of Freedom Mobile from Shaw as part of the Rogers-Shaw combination. Freedom has since put new offers on the market that it says puts the industry in a “different landscape.”
The CRTC had set August 7 for an expectation that regional carriers hash out agreements for access to the national wireless networks, but that was not a hard deadline.
Regional carriers have seven years to use the MVNO regime before its sunsetting, the expectation being they will by then have built sufficient wireless networks to sustain themselves.
