OTTAWA – The case goes back a few years and involves a complex network migration of Department of National Defence telecom services from Bell to Telus, but Telus is again insisting to the CRTC that its decisions in the DND versus Bell Canada dispute will have a negative impact on future competition in the large enterprise market.
The western-based telco filed the Part VII on April 12, appealing two previous rulings in the case (Decisions 2009-85 and 2010-11).
The CRTC ultimately determined that DND would have to pay Bell for a set period of time while services were transitioned to Telus’ network. Payments to Bell would continue even if the transition was completed ahead of time.
The CRTC’s decision left DND on the hook to pay an additional $37 million to Bell for services that won’t be provided for the remaining seven months of the transition period. This is on top of the $11 million, DND paid to Bell during the transition.
Telus claims in its appeal that the CRTC failed to consider “the impact of the decision on competition relating to transitions to new suppliers in complex telecommunications markets where agreement cannot be reached with the incumbent.”
Ted Woodhead, Telus’ VP of telecom policy and regulatory affairs, says the decision casts a pall over competition in the large national/international telecom market if this situation is left unchecked. “The market is sufficiently competitive, but this decision will put a chill in it unless corrected,” he said.
Telus says the impact on competition is already being felt as a result of the DND case. The company recently chose not to bid for the network services of another government department, for example.
“When you impose these costs on a customer or on a competitor, that changes the whole economics of that market because you’re inserting risk into even bidding on those types of contracts,” Woodhead explains. “A competitor has got to think twice about it. And we did think twice with respect to this other one and we determined in significant part that we would not bid on that because the risks given this decision remain and are too great.”
Telus also contends that the final offer arbitration (FOA) employed by the CRTC was inappropriate. “[FOA] inserts a level of uncertainty for all players, is not transparent and has resulted in the imposition of costs that will have an impact on competitors,” states the appeal.
Not only did the Commission abandon its normal procedures for setting just and reasonable rates, opting for a FOA didn’t allow for a full accounting of all relevant information, Telus claims. For example, the company was acutely aware of how long the transition from Bell would take, yet the Commission chose not to consider this information, the appeal says.
“Telus rather than Bell and PWGSC would have been best positioned to provide information on this essential issue,” states the Part VII.
According to Telus, the Regulator shouldn’t use a FOA process when dealing with complicated network migration cases with multiple facets, particularly when the customer is left paying for services that aren’t being provided.
“Would a reasonable person really believe that you should end up paying for seven months for services that you haven’t received?” Woodhead asks.
Telus has also appealed the CRTC’s use of FOA to set rates to the Federal Court of Appeal.
