Canada’s large phone and cable companies want the Supreme Court to weigh in on the telecom regulator’s decision to lower the rates they can charge smaller internet providers for access to their networks.
The legal issues raised in the proposed appeal are of great public importance and extend beyond the Canadian Radio-television and Telecommunications Commission to other administrative bodies, a group of five cable companies argues in a document filed with the top court this week.
“If the Supreme Court does not resolve the important legal issues raised by the cable carriers, the future of the internet in Canada could well be adversely affected to the detriment of all Canadians – and particularly the most vulnerable among us who already suffer due to the digital divide,” the companies say in the memorandum filed on Monday.
Canada’s large telecoms are required to sell network access to independent internet service providers, or ISPs, such as Teksavvy Solutions Inc. and Distributel Communications Ltd. at regulated rates. Those third-party operators then sell internet service to their own customers. The system is meant to encourage competition in the internet market.
In August, 2019, the CRTC lowered the rates the larger telecoms are able to charge third-party operators. The phone and cable companies pursued every avenue available to them in an effort to have the decision overturned, including appealing to the federal court and to the CRTC, which is now in the midst of reviewing its decision. The companies also petitioned the federal cabinet, which declined to overturn the CRTC ruling but sided with the large telecoms by commenting that the reduced rates could stifle investment in telecom networks.
The Federal Court of Appeal dismissed the case in September, saying that the issues presented by the phone and cable providers were of “dubious merit” and that the companies failed to demonstrate that the CRTC erred or exceeded its powers when it reduced wholesale broadband rates.
Bell and the five cable operators – Rogers Communications Inc., Shaw Communications Inc., Quebecor Inc.’s Videotron Ltd., Cogeco Communications Inc. and Eastlink Inc. owner Bragg Communications Inc. – first applied to the Supreme Court last month for leave to appeal the ruling. They argue the CRTC, in its August, 2019, ruling, didn’t make proper reference to guidelines that the federal cabinet has set out for decisions that the regulator makes.
Teksavvy and the Competitive Network Operators of Canada, an industry group representing independent ISPs, countered in their own filings this month that the top court should decline to hear the case because it does not raise issues of administrative law, much less of national or public importance.
The cable companies counter that, according to Parliament, telecommunications plays “an essential role in the maintenance of Canada’s identity and sovereignty.”
Matt Stein, CNOC chairman and chief executive officer of Distributel, said the appeal is the carriers’ latest attempt to delay having to implement the new rates.
“They’ve not only taken every reasonable avenue, but now all the unreasonable avenues as well, to try to overturn this, or at a minimum to delay it from actually taking effect,” Mr. Stein said.
In a white paper released Thursday, the CNOC argues that Canada should consider what is known as structural separation – splitting the large phone and cable companies into two parts: retail and wholesale. An independent entity would then sell wholesale broadband to both large and small providers.
“Everyone would pay the same prices, and there would be no preferential treatment for [the large carriers], nor any possibility of delay tactics,” the paper argues. “This has worked in other countries, and it’s time Canada started exploring it as a real option.”
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