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The Federal Court of Appeal is the wrong forum for Canada’s large phone and cable companies to challenge the telecom regulator’s decision to lower the rates they can charge smaller rivals for access to their networks, a lawyer for TekSavvy Solutions Inc. argued Friday.

Telecom regulator Canadian Radio-television and Telecommunications Commission (CRTC) requires larger carriers with their own networks to sell wholesale access to third-party operators such as TekSavvy and Distributel Communications Ltd., who then sell internet services to their own customers. The system is meant to encourage competition.

In August, 2019, the regulator lowered the rates that the larger carriers can charge and ordered them to make retroactive payments – totalling an estimated $325-million, according to court documents – to independent internet service providers (ISPs) to compensate them for the higher interim rates set in 2016.

BCE Inc. and a group of five cable operators – Rogers Communications Inc., Shaw Communications Inc., Quebecor Inc.‘s Videotron Ltd., Cogeco Communications Inc. and Eastlink Inc.‘s owner Bragg Communications Inc. – are pursuing multiple avenues to have the ruling overturned. In addition to the federal court appeal, they have asked the CRTC and the federal cabinet to quash the decision.

Julie Mouris, a lawyer for Chatham, Ont.-based TekSavvy, said the appeal should be dismissed because the issues that the phone and cable companies are raising concern questions of fact and policy rather than questions of law.

“The appellants are in the wrong forum to be arguing such questions,” Ms. Mouris said on the second and final day of the virtual hearing, adding that cabinet and the CRTC are more suitable avenues to address such issues.

There, the cable companies would “have the full opportunity to raise the very questions … that they are improperly raising before this court,” Ms. Mouris said. The issues the carriers have raised are “methodological disagreements,” Ms. Mouris argued.

On Thursday, BCE lawyer Steven Mason argued that the regulator failed to properly balance various policy objectives when coming to its decision, including how the reduced rates would affect the company’s ability to invest in its networks.

Meanwhile, lawyer Kent Thomson argued on behalf of the cable companies that the CRTC failed to keep an open mind when going through the rate-setting exercise and instead set out with the goal of reducing wholesale broadband rates and then reverse-engineered the decision-making process to achieve that outcome.

The Competitive Network Operators of Canada (CNOC), an industry group for independent ISPs, countered that the claim is meritless.

Matt Stein, CNOC chairman and chief executive of Distributel, said in an interview Thursday that the regulator reviewed thousands of pages of documents and spent 3.5 years deliberating before deciding to lower rates.

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