GATINEAU – Hot on the heels of Shaw Communications’ application to review and vary the CRTC’s newly set policy on wholesale Internet, both Rogers Cable and now Videotron have also submitted similar appeals to the CRTC of its Telecom Regulatory Policy 2011-703, the so-called wholesale usage-based billing decision.
The decision quashed the idea of usage-based billing for third party independent internet service providers in favour of incumbents charging independent ISPs either a flat rate, or a rate based on capacity and the number of users. While most liked the idea, few liked the rates (independent ISPs say they’re too high while Shaw, Rogers and Videotron are saying they are too low or too inflexible).
“We submit that there is substantial doubt as to the correctness of TRP 2011-703 due to the Commission’s failure to consider a basic principle which had been raised in the original proceeding, namely the principle that the cost of providing high-speed capacity is not constant over time,” reads Videotron’s submission. “As relief, we request that the Commission vary TRP 2011-703 by replacing the fixed capacity rate for each network provider by a declining capacity rate determined in such a manner that the weighted average of the declining rate over the study period equals the fixed rate determined in TRP 2011-703.”
Says the Rogers missive: “In this application, Rogers is not questioning the Commission’s primary determination to use a capacity-based model to establish TPIA rates, or the model itself. Rather Rogers objects to certain of the adjustments to Rogers’ costs, specifically regarding, distribution plant segmentation, Cable Modem Terminating Systems (CMTS), trouble reporting and repairs, access plant productivity and the inconsistent application of a later study date. These errors by the Commission all reduce Rogers’ rates for TPIA services and deny Rogers recovery of its full incremental costs of providing TPIA services.”
The Commission put its new policy into effect on February 1st, but these new applications throw the new regime into doubt since review and vary applications, if denied by the Regulator, are often then appealed to federal cabinet as a next step.
“Failure to grant the requested relief will leave in place a situation where network providers are forced to confer substantial subsidies on their wholesale customers in the early years of the study period, with little likelihood of recuperating these subsidies in the later years. Such a situation denies network providers a reasonable opportunity to earn a fair return on their network investments, in contravention of the Commission’s obligation under section 27(1) of the Act to ensure that rates charged for telecommunications services are just and reasonable and the Commission’s obligation under section 1(b)(ii) of the Policy Direction to ensure that regulatory measures do not promote economically inefficient entry,” adds the Videotron submission.
– Greg O’Brien
