EastLink, the small Halifax cable television and telephone company, has accused Canada's third-largest phone company, Aliant Inc., of anti-competitive behaviour, asking the federal telecom overseer to intervene in what could become a significant regulatory battle.
"It appears that merely requesting that Aliant comply with existing rules is not sufficient to prevent the offending activity," said EastLink in a late June filing to the Canadian Radio-television and Telecommunications Commission.
EastLink alleges that Aliant is breaking several commission rules and is unfairly bundling its local telephone service with Internet and mobile telephone services, a practice it wants halted.
Cable TV giant Rogers Communications Inc. asked the regulator for the same ban last week. Rogers wants to prevent all former monopoly phone companies including Aliant, Bell Canada and Telus Corp. from packaging local service with other discounted services. Rogers doesn't offer telephone service and said that bundles with local phone service are unfair and undermine competition.
The EastLink filing is significant because it touches on a number of key issues the regulator has addressed this year, particularly its goal of encouraging competition in the local market. The EastLink-Aliant battle is a prelude to bigger scraps many observers believe will emerge this decade.
Aliant said it is innocent. "We believe the accusations EastLink are making are false," said Heather Tulk, Aliant vice-president of broadband and marketing. "They're not well grounded or, in fact, based in any benefit for the consumer."
Aliant and other interested parties have until July 24 to respond but the process could extend longer and a CRTC decision likely wouldn't come until the fall, at the earliest.
EastLink -- which serves Nova Scotia and Prince Edward Island -- said it had no comment beyond its filing.
Saint John-based Aliant -- which serves New Brunswick, Nova Scotia, PEI and Newfoundland -- is offering a variety of packages and discounts. While Ms. Tulk said the discounts are available without buying local service, Aliant doesn't technically offer Internet service without local service.
One Aliant bundle, for example, includes in EastLink's filing, offers high-speed Internet, a mobile phone plan, local telephone and unlimited calling features for $79 a month. The regular price for all those services if bought separately is $118.25.
EastLink also takes advantage of bundles. It started selling telephone service in 1999. In 2000, it began selling bundles, which spurred growth, Merrill Lynch Canada Inc. said in a recent report.
Ms. Tulk complained that EastLink has gone to the regulator instead of simply competing.
"We are in a truly competitive environment," she said. "Our approach has been to deliver customers what they want . . . within the regulations."
EastLink is owned by Bragg Communications Inc. It is privately held, controlled by the Bragg family, which made its fortune selling blueberries. It is the only cable company in Canada selling telephone service, with about 250,000 cable subscribers, of which about 40,000 subscribe to telephone service.
Aliant -- majority owned by BCE Inc. of Montreal -- had 922,000 residential local connections, as of March 31. The figure is in slow decline -- down 2 per cent year-over-year -- and Aliant has in part blamed competition from EastLink.
(BCE also owns Bell Canada and controls Bell Globemedia, owner of The Globe and Mail and the CTV television network.)
EastLink asked for swift action from the regulator and suggested the CRTC could use random inspections to ensure Aliant follows the rules it allegedly broke. The regulator has the power to conduct such inspections, which EastLink said "would be a useful tool."
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