OTTAWA – Bell Canada is seeking leave to appeal the CRTC’s March 3 wholesale services decision to the Federal Court of Appeal on the grounds that the regulator “erred in law and/or as to its jurisdiction.”
The court has no deadline to respond “yes” or “no” to the request made last week by Bell and fellow appellants Bell Aliant, Saskatchewan Telecommunications and Telebec, Societe en commandite to take Telecom Decision 2008-17 through the judicial system to try to have it overturned.
The CRTC’s decision is “incorrect and unreasonable” and “didn’t meet legal standards,” Mirko Bibic, Chief of Regulatory Affairs at Bell Canada, told cartt.ca.
The decision maintains the requirement for telephone companies to provide interconnection services to competitors, but identified a number of wholesale services, such as CDN (competitor digital network) and Ethernet, that will be deregulated over the next three to five years.
Bibic said Bell has no problem with the test the CRTC adopted to determine what constitutes an essential service.
“The problem is with how it’s being applied,” he said. “It finds that loops are essential because there is no competition. The CRTC though decided to ignore the fact that the cablecos are there providing competition.”
He added that loops are essential in rural areas, but not everywhere. When the CRTC decision was released, he told cartt.ca that unbundled local loops in major centres, such as Montreal, Toronto, Ottawa, Calgary, etc., should be deregulated.
Determining whether loops are an essential service or not should be determined on a market by market basis, he told cartt.ca in an interview earlier this week.
This opinion is outlined in Bell’s leave to appeal, which states the CRTC erred because it failed to apply its own definition of “essential services” by refusing to undertake a market-based analysis of whether services are essential. Bell complains that the CRTC only assessed whether a particular service could be duplicated, and proceeded to a service-by-service approach on a national basis regardless of the prevailing conditions in the relevant downstream markets, notably the admitted competition from cablecos, and in some cases, in downstream retail markets using their own networks.
In its decision, the CRTC recognized that the cablecos’ duplication of the functionality of unbundled local loops (ULLs) could be viewed as exercising a level of constraint on the ILECs’ upstream market power. But the regulator added that while cablcos are competitors to ILECs, there are no wholesale alternatives to the ILECs’ ULLs.
Another way Bell claims that the CRTC’s March 2008 decision erred in law and/or jurisdiction was by failing to comply with the government’s binding policy direction to it, contrary to sections 11 and 47 of the Telecommunications Act, and by misapplying an earlier Cabinet Order (Order Varying 2006-15) in establishing or applying its essential services definition.
The government’s policy agenda was spelled out in a legally binding December 14, 2006 policy agenda, where the government ordered the CRTC to rely on market forces to the maximum extent possible.
In Decision 2006-10, the CRTC determined that it would deregulate retail local exchange services only where the incumbent telecom provider demonstrated it had experienced a 25% market share loss. However, the decision was appealed to Cabinet, and the regulator was forced to modify its criteria in Order Varying 2006-15 to allow forbearance if there was at least one independent facilities-based, fixed line telecommunications provider offering local telephony services in addition to the ILEC.
The government has adopted a telecommunications policy agenda to make regulations more efficient and effective through increased reliance on market forces, noted Bell.
In releasing Telecom Decision 2008-17, the CRTC referred to “a new framework for wholesale services that will promote competition in wholesale and retail telecommunications markets based on sound economic principles,” but Bell told cartt.ca at the time it was pretty much status quo.
In its request for leave to appeal, Bell also stated the CRTC made a mistake in mandating under the Telecommunications Act wholesale services, specifically broadcasting, that are excluded from the Act’s jurisdiction.
“This decision [2008-17] will ultimately slow innovation in the country. That’s why we want to file the appeal,” Bibic said.
Norma Reveler is an Ottawa-based freelance writer.
