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Toronto-based television and internet startup VMedia Inc. is asking the federal cabinet to uphold a CRTC ruling that forces Canada’s large telephone and cable companies to lower the rates they charge smaller internet providers for access to their networks.

In an effort to encourage competition, the Canadian Radio-television and Telecommunicatons Commission requires large telecom providers to sell wholesale access to independent internet service providers (ISPs) such as Distributel and TekSavvy, which then sell services to their own customers.

Last August, the CRTC lowered the rates that the larger players are allowed to charge third-party operators for access to their networks. The commission also ordered the telephone and cable companies to make retroactive payments to compensate for the higher prices that had been charged since interim rates were set in 2016.

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Phone companies BCE Inc., Telus Corp. and a group of five cable operators – Rogers Communications Inc., Shaw Communications Inc., Québecor Inc.’s Videotron Ltd., Cogeco Communications Inc. and Eastlink owner Bragg Communications Inc. – have all filed petitions to the cabinet, asking for the CRTC ruling to be overturned or sent back to the commission for reconsideration.

Separately, BCE and the five cable companies have also filed a motion with the Federal Court of Appeal, which has granted them a temporary stay on the ruling. That means they won’t have to make retroactive payments, which the operators estimate in court documents would total $325-million, to the ISPs for the time being.

The larger operators have said the new rates are so low that they would have to reconsider some of their planned network investments. In their submissions to cabinet, filed late last year, they argued that the rate reductions favour resellers that aren’t required to invest in infrastructure and are already flourishing under the current rules.

VMedia says the petitions from the large operators contain “gross material inaccuracies," which BCE and the cable companies “ought to have known are false.” In particular, VMedia says the larger phone and cable companies exaggerate in their filings the market share and margins of the ISPs, in an effort to demonstrate that reducing the wholesale rates is not necessary.

“The distortions and misrepresentations contained in their petitions destroy the credibility of the petitioners and reinforce the reasons for the CRTC’s rejection of their arguments supporting higher internet prices in the first place," VMedia CEO Alexei Tchernobrivets said in a statement.

VMedia is asking the cabinet to dismiss petitions from the large cable and phone companies “as expeditiously as possible.”

Some representatives of the cable and telephone companies declined to comment on VMedia’s assertions while others could not be reached or referred to their earlier submissions.

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