OTTAWA – The CRTC is threatening to withhold subsidies to four Quebec small ILECs for delays in opening up their networks to local telephone competition. Cogeco Cable claims the delays have prevented it from offering competing triple-play bundles (telephone, Internet, television) to those regions.
The regulator denied Cogeco the settlement it sought, but instead issued a Notice of Consultation regarding the potential withholding of subsidy payments to CoopTel, Téléphone Guèvremont Inc., Téléphone Milot Inc., and Sogetel Inc.
The decision stems from the failure of the ILECs to complete an interconnection arrangement based on leased circuits for each local interconnection region involved with Telus and Cogeco Cable by July 23, 2012. The ILECs were ordered to do so by the Commission in May 2011.
But the Quebec small ILECs have instead pursued various avenues of appeal, including an application before the Commission to stay certain portions of the local competition decisions, an application for leave to appeal before the Federal Court of Appeal, and a petition before the Governor in Council, seeking to have the terms and conditions associated with the implementation of local competition modified. All of these various legal recourses were denied.
Cogeco has urged the Commission to force the Quebec small ILECs to announce that competitive telephone services are coming and for them to provide consumers with Cogeco’s contact information, one month before implementing local competition. It wanted the notice inserted in billing invoices, posted on the Quebec small ILECs’ websites, and published in local and regional newspapers.
The ILECs countered that they are not responsible for any implementation delays. They claimed that implementation delays were caused by Telus with respect to network interconnection and that Telus should be held responsible for the delays in local competition implementation.
The Commission however ruled that the ILECs did not provide convincing evidence to support their claim that Telus was the cause of interconnection delays.
It maintains that it was the decision of the Quebec small ILECs to delay investment in facilities until all of their legal recourses had been exhausted that is the primary reason for the delays associated with implementing local competition. It concluded that the delay has placed Cogeco at a competitive disadvantage.
The ILECs argued that granting Cogeco’s requested relief would place the financial viability of the Quebec small ILECs, as well as the viability of sustained local competition in their territories, at further increased risk.
The Commission agreed and denied Cogeco’s requested relief ruling that it “would amount to free publicity for Cogeco’s services, which the Commission finds inappropriate considering Cogeco’s resources compared to those of the Quebec small ILECs.”
The commission instead has proposed the withholding of subsidy payments due to the Quebec small ILECs until local competition is fully implemented, may be an “appropriate way to encourage the timely implementation of local competition.”
The Commission has issued Notice of Consultation 2012-623 seeking comments on the Commission’s preliminary view that, starting January 31, 2013, payments of subsidies to the Quebec small ILECs that have not yet implemented local competition should be withheld until local competition has been implemented in their territories.
Interested persons who wish to become parties to the proceeding must file an intervention with the Commission November 26, 2012.
