Telecom provider Beanfield wants the federal telecom regulator to investigate a practice it says is impacting consumers — bulk agreements.
These agreements target living units and subject tenants to pay for services (including internet and TV) from a single provider they did not pick. These agreements are often in place before multi-dwelling units (MDUs), like condos, have residents and are common in new builds.
According to Todd Hofley, VP of policy and communications at Beanfield, these agreements remove consumer choice and competition, creating “islands of monopoly.”
Beanfield filed a Part 1 application to the Canadian Radio-television and Telecommunications Commission (CRTC) in September, singling out the number of bulk agreements with Rogers.
The application states these agreements usually last between five to eight years. Telecom companies present a single bill for a building, and the fees are added to their rent or condo fees, whether or not a tenant uses the services.
The telecom provider also presents the developer with an “up-front fee.” In an interview with MobileSyrup, Hofley said Beanfield has seen fees of around $450 per unit.
“There’s nowhere for a consumer to turn. No matter how bad the service is, you’re stuck. No matter if you want to upgrade your service, you’re stuck.”
Toronto, with its growth of new developments, is one area that the practice has highly impacted, Hofley said.
According to a January 2022 survey of 110 projects from Beanfield, nearly half of all new and planned multi-dwelling buildings in Toronto had bulk arrangements in place, representing nearly 40,000 units.
This can also be a problem with service outages occurring, which was likely what some experienced during the July 2022 Rogers outage.
Bulk agreements don’t mean other service providers can’t offer their services in a multi-dwelling building, but it does mean there might not be a market for it. Bulk agreements stop residents from getting services from another provider, as they’re already paying for it through the predetermined fees. “In turn, with no material market share possible, potential competitors (especially non-incumbent ones) have little incentive to pursue access,” Beanfield said in its application.
But even when these agreements expire, it doesn’t “dissolve” the presence of the original agreement. Beanfield says the original providers have an advantage as they’ve already built their network and have seen a financial return on their investments.
“With its in-building network paid for, it can easily outbid any carrier on any bulk renewal or be in a position to price compete if the bulk arrangement ends and other carriers enter, not to mention having years of first access and monopolistic advantage – not only in terms of its provision of internet service but television, home phone, cellular phone and home security services as well,” Beanfield application states.
In its October response, Rogers argued the CRTC should dismiss Beanfield’s application. The company states such arrangements have been a part of Canada’s telecom landscape “for decades” and that they provide “benefits” to residents.
“Bulk billing arrangements do not prevent or restrict competing TSPs [telecommunications service providers] from directly accessing and serving end-users in MDUs, and such an arrangement is only obtained by a TSP as part of a highly competitive bidding process to provide one or more communications services on a bulk basis to an MDU and its residents.”
Beanfield will discuss bundling agreements with the CRTC on February 13th during its appearance for a public hearing examining the wholesale high-speed access framework.
Image credit: Envato Elements
MobileSyrup may earn a commission from purchases made via our links, which helps fund the journalism we provide free on our website. These links do not influence our editorial content. Support us here.
