MONTREAL – Fifteen independent companies, today lodged a complaint with the CRTC over the business practices of Bell Canada they say is unfair.
The document ultimately strives to end what the Quebec ISP Coalition calls the "unfair conduct of Bell Canada with regards to the provision of high speed Internet services."
The Coalition’s two main complaints relate to Bell Canada’s "taking advantage of its dominant position" regarding its high speed basic Internet access, and that its long-term, so-called promotional rates are unfair.
"Bell Canada gives with one hand and takes with the other," said Sophie Léger, spokesperson for the Coalition of Quebec ISPs and president of Inter.net Canada. "On one hand, the company fulfills its obligation to ensure a competitive landscape by providing wholesale services to its competitors. On the other hand, however, Bell stifles that same competition through a dangerous retail strategy. This strategy offers consumers services such as 256K ‘High Speed Basic’ on a promotional basis at rates substantially below our costs, an unfair technique commonly known as margin squeeze.
"Smaller ISPs simply cannot compete with Bell’s retail rates for its flagship Sympatico Basic ADSL services, offered at $19.95 per month. We believe this rate is in clear violation of CRTC directives because it is below the wholesale tariff, therefore we cannot afford to offer this product to our customers," added Léger.
“We are not selling below cost,” Mirko Bibic, Bell’s regulatory affairs chief told www.cartt.ca Wednesday afternoon. “The retail pricing is a function of a very competitive marketplace, extremely competitive.
“It’s also important to note that the wholesale pricing we currently have was negotiated (in 2004) with a wide cross-section of the ISP industry,” he added.
Internet access has steadily been shifting from dial-up to high-speed over the last five years, and Bell Canada is the main beneficiary, continues the coalition’s press release. “Bell Canada’s Lite ADSL, introduced in 2002, is no longer a bait-and-switch product but a mainstream product, and its Sympatico Basic service is touted in ads as, "faster than dial-up at lower than dial-up prices."
Smaller ISPs, unable to effectively sell ‘High Speed Basic’ service “because of Bell’s unfair retail price policy, are seeing their subscriber base and revenues decline at an alarming rate,” say the ISPs.
Bibic wondered why the ISPs are so focused on Bell when they have alternatives, namely the cable companies, to provide them with an Internet backbone. “The complainants have a choice,” he said. “But because the cable companies dragged their heels and delayed and delayed,” when moving towards opening up its networks to third parties while high speed was beginning to take hold, all of these independent ISPs use Bell.
Cable, too, faces mandated wholesale rates for third parties who must be given access to their network, but few independent ISPs have come to cable.
"The CRTC is failing to administer a regulatory framework that will ensure sustainable competition in the Internet services market," Léger said. "And if local ISPs are not given a legitimate opportunity to survive against incumbents-who own 90% of the market already-consumers become dangerously close to losing all other viable choices of Internet service providers. Consumers are the ones, ultimately, who will suffer."
The Coalition’s requested remedies include:
* Invalidating Bell Canada’s $100 charge levied on consumers for early contract termination when switching to a Bell Canada wholesale customer such as a member of the Coalition.
* Declaring that Bell Canada’s renewal of 12-month promotions at the same rate will result in CRTC reevaluation of the mark-up on competitors’ rates, to avoid any margin squeeze.
* Limit the mark-up which Bell Canada charges for its wholesale service to the same which Bell Canada satisfies itself with for its own retail operations.
* Request Bell Canada to submit to the CRTC new rates based on up-to-date costs, as their ADSL equipment cost has plummeted by over 50% over the last three years.
* Declare that the Bell Canada ADSL service is a near-essential service when obtained directly from the central office.
The CRTC has yet to respond, since the complaint was only made this week.
“We’ll vigorously defend this,” added Bibic.
"Thus far, the CRTC has not fully settled the dispute between smaller ISPs and the larger telecommunications companies," Léger said. "In fact, the CRTC made a decision regarding ‘High Speed Basic’ in May 2004. More than 18 months later, however, the CRTC has yet to mandate anything.
"The inaction on the part of the CRTC is in fact action in favor of Bell Canada, and every day that goes by in which a decision is not made increases the difficulties faced by smaller ISPs," Léger added.
