Clarification: A previous version of this story omitted that TekSavvy does indeed have previous experience using Bell’s transport facilities where it is the dominant carrier, just not for regulated wholesale internet access.
By Ahmad Hathout
MONTREAL – Quebecor’s Videotron has not presented an adequate case for the commission to re-regulate rates it charges for third parties to connect to its fibre transport facilities, according to Bell’s response to the former’s application asking the CRTC to review those costs.
Videotron filed an application early last month charging that Bell is forcing the company’s subsidiary Fibrenoire to accept either a less expensive long-term contract or higher-priced monthly prices for access to its services to deliver traffic to the last mile. Videotron said the contracts are allegedly abusive and contravene the Telecommunications Act because they are in areas where Bell is the dominant carrier. It has asked the commission to freeze those rates until it completes its review of the wholesale internet framework.
But in a reply to the application dated Monday, Bell said Videotron’s application lacks compelling evidence for the CRTC to re-establish that regulatory authority, and its remedy for dealing with it is impractical.
The company argues that it has not seen its revenues, market share or retail prices increase in this market, showing that it remains competitive.
Bell also said Videotron is misrepresenting the situation by claiming it did not negotiate in good faith. Bell said it submitted several offers to Videotron, with the closest being a May 2022 proposal that was “just over 10% higher” than Videotron’s last counteroffer. That got approval from leaders of Quebecor, but Quebecor eventually pulled back without a counteroffer, Bell alleges.
Bell further alleges that Videotron tried to involve government entities into the discussions instead of returning to the negotiating table. In December 2022, Bell filed legal proceedings in the Superior Court of Quebec alleging Videotron failed to pay the “abusive” monthly fees for the facilities it was still using.
It also argues that Videotron does not specify what level(s) at which rates should be frozen, does not define or provide the points of presence where Bell’s “so-called dominance” exists, and its interim relief request does not have a firm deadline since it came before the regulator started its wholesale rate review.
Bell added that because re-regulating rates requires broad industry consultation, it cannot be done on an interim basis. Bell further charges that Videotron is asking for the commission to grant itself and not others a favourable price by Bell “in perpetuity.”
Support for Videotron’s application
Videotron, however, did receive some support from independent internet service providers.
The Competitive Network Operators of Canada said in its intervention that there is an “urgent need” for the CRTC to regulate wholesale transport services “to prevent the alleged anti-competitive practices by Bell Canada that are described in Videotron’s application.”
CNOC said Videotron’s complaint is “consistent with the challenges that CNOC members have reported with obtaining access to wholesale transport services on just and reasonable terms and conditions throughout Canada.”
But while the industry association said it does not oppose Videotron’s relief request, it is concerned that it “will not fully address the significant problems in the wholesale transport market” – namely it may only address rates that are already inflated and not determine rates that are “just and reasonable.” It will also not address points of presence that are “monopolized by parties” not named Bell.
As such, the association is asking for the commission to launch a proceeding considering the regulation of transport points after it delivers a decision on a 2019-initiated proceeding about identifying barriers to extending transport networks to underserved areas.
The country’s largest independent telecom TekSavvy also supported Videotron’s application and the freezing of the rates where Bell is the dominant carrier. TekSavvy said Bell “should not take advantage of its dominant market position, including monopoly or quasi-monopoly presence in some areas, to charge rates for transport services that present insurmountable barriers to competition.”
It also said that — despite not having needed to buy Bell transport for wholesale internet access services — it has a similar experience to Videotron’s using Bell’s transport facilities for other purposes where the latter is the dominant carrier. The telecom argued that as it moves into areas that are more rural, “the prospect that they charge unreasonable rates or impose unreasonable terms would threaten the viability of wholesale services in those areas.”
