Major Canadian cable companies appeal CRTC internet rates decision

TekSavvy credits the ruling for helping it lower costs for customers

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Some of Canada’s largest cable companies are seeking an appeal of last month’s CRTC ruling on wholesale internet rates.

The group, including Rogers, Shaw, Quebecor’s VidĂ©otron, Cogeco and Bragg Communications, which owns Eastlink, filed a notice of motion within the Federal Court of Appeal on Friday.

The five companies are challenging the Canadian Radio-television and Telecommunications Commission’s (CRTC) August 15th ruling about the final rates for what internet service providers can charger smaller companies for network access.

Friday marks the last business day before the deadline for parties in a CRTC ruling to seek leave to appeal in the Federal Court of Appeal.

According to the Globe and Mail, which obtained a copy of the notice of motion, the cable companies argue the CRTC made several errors of law and exceeded its jurisdiction.

“If allowed to stand, [the ruling] will create significant and irreversible market distortions while serving as a powerful disincentive to innovation and investment by the cable carriers. Ultimately, Canadian consumers will suffer the consequences,” said the filing.

Further, the companies claim the CRTC followed older guidelines and policies that don’t apply to currently deployed technology.

The filing accused the CRTC of engaging in “results-oriented” reasoning and methodologies that didn’t consider a 2006 policy directive from the federal government. That directive required regulators to encourage companies to invest in their own networks. While the government issued a new directive earlier this year, the old one still remains in place.

BCE Inc. has also said it was “looking at all options” concerning an appeal but hasn’t said whether it plans to appeal.

TekSavvy cites CRTC decision as reason behind new lower rates

The cable companies said if the ruling stands, they will be required to pay over $225 million CAD to third-party ISPs in retroactive payments. While the companies note in the filing that ISPs aren’t required to pass along any of the repayments to their customers, Chatham, Ontario-based provider TekSavvy announced that the CRTC decision would lead to savings for many of its customers.

Specifically, TekSavvy said that more than 85 percent of its customers would benefit from reduced prices or upgraded, unlimited data plans on their next monthly bill as it “streamlines its retail product line.” It directly credited the CRTC decision for the lower rates.

The CRTC requires large telecoms to sell wholesale access to third-party operators like TekSavvy, who then sell internet service to their own customers. The ruling set lower final rates for certain wholesale services and ordered large providers to make retroactive payments to ISPs to account for the higher prices charged since the CRTC set interim rates in 2016.

This comes just as the federal election campaign begins. It’s expected that major parties will include telecom in their campaign, and NDP leader Jagmeet Singh already said an NDP government would set a cap on cellphone and internet service prices.

Source: Globe and Mail