By Ahmad Hathout
THE CANADIAN NETWORK OPERATORS Consortium (CNOC) is facing fresh denials from some incumbents to a request by the organization to lift certain network restrictions during the Covid-19 crisis.
The three-part ask from CNOC, which represents smaller third party internet access operators that rent part of the network of the larger providers, includes a lifting of capacity restraints free-of-charge, expedited network augmentations through more physical interconnections, and wholesale payment term flexibility of 60 additional days to help support customers who are unable to pay on time.
The letter was sent over the course of the past couple of weeks to Rogers, Bell, Cogeco and Videotron, as well as others this week, with several recipients which responded to this publication’s request for comment declining to implement the relief measures.
Rogers said the letter’s requests were unrealistic because the changes it would have to make were complex and would’ve cost the company greatly to do so. Meanwhile, Bell said while it has already provisioned added capacity for resellers, it cannot accelerate timelines for that, “especially during this crisis.
“Bell is absorbing the costs associated with waiving data overage charges for our retail customers while also making significant investments in capacity to support significantly increased usage during the crisis,” Bell spokesman Marc Choma said in an emailed statement. “CNOC members could also decide to absorb costs for their retail customers or make necessary network investments themselves, but we cannot provide them free network capacity or finance accounts receivable for reseller companies.”
“We cannot provide them free network capacity or finance accounts receivable for reseller companies.” – Bell
CNOC noted in the letter the pandemic has caused its members to experience “record traffic levels that meet or exceed their network capacity… This poses a huge economic challenge for CNOC members, which if not addressed, could erode their already thin margins to the point where their businesses are no longer sustainable.” It compared some of the relief measures to incumbents lifting data cap restrictions for their own customers.
Earlier this week, TekSavvy released a press statement suggesting that the CRTC implement emergency wholesale rates for the duration of the pandemic. The Chatham-based company last month announced that it was laying off 130 staff and increasing internet prices by $5 starting next month. It has not made a formal application to the CRTC for emergency rate relief.
Cogeco also said it is “not in a position to support the financial challenges resellers may be facing during this crisis.
“Given this, and other constraints we are experiencing in managing our network during this crisis, we cannot freeze [capacity-based billing] for our wholesale customers,” Cogeco spokesman Gabriel Beauséjour said in an emailed statement, alluding to the added capacity that resellers order but don’t pay for unless needed.
“Cogeco cannot accommodate either the extended payment terms requested by CNOC. Resellers will continue to be paid by some clients and will encounter bad debts along the way, just as Cogeco and others do for the services they provide to their end-customers.”
Videotron did not respond to a request for comment. Sasktel said on Wednesday afternoon that it hadn’t received a letter.
CNOC requested that the incumbents respond to the letter by April 9, but some only received it this week.
“We are confused by CNOC’s claim that we have rejected a proposal that they only just prepared and sent to us late Tuesday and to which we’ve not yet even had a chance to respond,” Eastlink spokeswoman Jill Laing said in an emailed statement. “We will answer within the 3 short days they’ve given us (interestingly, other providers were given 2 weeks to respond). Unlike CNOC, who chose to raise their concern in a public forum, we will respond directly to them.”
Shaw said in an emailed statement that it has not denied and will not deny “any reasonable request of individual resellers for additional capacity on commercial terms.
“CNOC’s requests were unreasonable as they were asking for resellers to be fully insulated from risk or loss,” Shaw’s statement continued. “After the resellers failed to make their own investments or to adequately prepare for any increase in capacity demands by their customers, they now expect network builders to further subsidize – and be accountable for – resellers’ promises of unlimited usage.”
“If these rates were in place earlier… Canada’s networks would not have been able to accommodate the dramatic increase in network traffic that occurred as a result of the pandemic.” – Shaw
Shaw also alluded to the importance of the Federal Court of Appeal’s decision to temporarily freeze new lower wholesale rates set by the CRTC last summer as a pivotal moment at a critical time: “If these rates were in place earlier,” the statement added, “Canada’s networks would not have been able to accommodate the dramatic increase in network traffic that occurred as a result of the pandemic.”
Telus said Wednesday afternoon that it only received the letter on April 14 and blamed damage to its reputation on public complaints CNOC and TekSavvy have lobbed generally on the “incumbents.” (CNOC and TekSavvy, which is no longer a member of the larger organization, wrote a letter to the CRTC this week saying that the incumbents’ change to technician work had disadvantaged the resellers.)
“On top of accusing us of using a global pandemic as a means to engage in anti-competitive behaviour (which is categorically false and totally irresponsible), [CNOC] has now also made a misrepresentation to media about us ignoring their concerns,” Telus spokesman Richard Gilhooley said in a statement, specifically alluding to a comment made by CNOC that all incumbents rejected its requests before knowing that the letter did not reach some, including Telus. Telus did not receive the letter on March 27, it said, but on April 14. “It’s pretty poor conduct all around, and has adversely impacted our reputation.”
“To date, Telus continues to provision wholesale services in a timely manner through the COVID-19 pandemic,” an additional statement read. “CNOC’s request for CBB relief does not apply to Telus, as our wholesale internet service provides unlimited internet usage to our wholesale customers. As a result of COVID-19, Telus has seen a dramatic surge in usage across our network and on our wholesale services, which has been supported at no additional cost to our wholesale customers and CNOC members.”
Telus is also not involved in the legal challenge that froze lower wholesale rates and the retroactive payments required in the CRTC’s August decision that would’ve benefited resellers.
“We are being grouped in with other carriers in a way that is unfair and inaccurate,” Gilhooley said.
“Going forward, we encourage individual CNOC members with a contractual relationship with Telus to reach out to their Account Manager directly to discuss the terms of their contract, invoice, and payments.”
The following is text of the letter sent to Telus by CNOC:
“As you are aware, the COVID-19 crisis has put unprecedented strain on telecommunications service providers and their networks, while fundamentally changing the way that Canadians must work, learn and communicate with each other during this time of crisis. For as long as strict social distancing remains paramount, Canadians will rely heavily on Internet connectivity throughout all aspects of their day-to-day lives.
In these early stages of the pandemic, members of CNOC have experienced record traffic levels that meet or exceed their network capacity. Furthermore, traffic levels are increasing steadily with every passing day. This poses a huge economic challenge for CNOC members, which if not addressed, could erode their already thin margins to the point where their businesses are no longer sustainable. CNOC and its members are very concerned that a continuation of this situation will lead to severe degradations of Internet service for Canadians – at a time when reliable connectivity is needed most.
Internet connectivity is an essential service. In our view, it is therefore incumbent on service providers to do everything in their capacity to provide high quality and affordable Internet access to Canadians throughout this crisis that has only begun to unfold.
Telus and other incumbent telecommunications service providers have announced significant retail measures aimed at providing relief to Canadians during this difficult time. In some cases, such measures include lifting Internet data caps on retail service packages. CNOC members have also done everything in their power to offer similar kinds of relief to Canadians. At this critical juncture, we are asking Telus to take additional steps towards creating relief for Canadians by implementing temporary wholesale measures. More specifically, CNOC is proposing the three kinds of relief outlined below.
First, CNOC requests temporary relief aimed at alleviating wholesale capacity constraints. CNOC proposes a measure whereby Telus shall lift the current CBB ceilings that apply to all wholesale customers. For the duration of the COVID-19 crisis, wholesale customers will be allowed to use as much of the capacity available at the router interface (e.g., 10 Gbps or 100 Gbps) as is needed to accommodate surges in consumer demand. While this measure is in effect, wholesale customers would be billed based on the total quantity of CBB increments to which they had subscribed as of March 15, 2020 until citizens are no longer required or advised to work from home. The design of this wholesale-level solution is intended to mirror the data cap relief that certain incumbent service providers have applied at the retail-level. At the end of the day, this measure benefits Canadians directly notwithstanding the existence of a wholesale intermediary.
Second, CNOC is asking your company to ensure that capacity augmentations requiring additional physical interconnections are processed as promptly as possible, with such interconnections and related augmentations being turned up as soon as possible and, in any case, no later than thirty (30) days following the order date.
Third, CNOC is requesting payment term flexibility for wholesale service invoices. CNOC members are expecting that many retail end-users will have difficulty making timely payment of invoices in light of the economic hardships created by the current circumstances. As a result, CNOC members require a reasonable amount of additional cashflow flexibility to pay invoices. CNOC proposes an additional period of sixty (60) days for payment of all invoices for wholesale high-speed access services.
On behalf of the CNOC member companies, we look forward to your reply, which given the urgency of the situation, we would appreciate receiving by April 9th. Do not hesitate to contact us to discuss any of these matters in greater detail.”
