Court rejects big operators’ appeal against CRTC wholesale broadband rates

14 Sep 2020

Canada’s Federal Court of Appeal has dismissed appeals by Bell, Rogers, Telus and other large telco and cableco firms against the wholesale fixed internet access rates proposed by the Canadian Radio-television & Telecommunications Commission (CRTC) in August 2019. The Canadian Press reports that the court’s decision of 10 September 2020 also ordered the large network operators to pay costs of the appeal to independent ISP TekSavvy Solutions and the Canadian Network Operators Consortium (CNOC) industry association. Matt Stein, CNOC chair and CEO of Distributel, one of about 30 CNOC members, declared: ‘This is a massive win for Canadians’, adding that the decision ended a ‘pivotal chapter’ in a battle that challenged ‘Canada’s long-standing practice of appropriate oversight to ensure fair pricing and competition’. However, rate changes are yet to be implemented as the CRTC remains in the process of reviewing its own decision.

TeleGeography’s GlobalComms Database says that in August 2019 the CRTC’s Telecom Order 2019-288 set lower wholesale high speed access (HSA) rates for Bell, Cogeco, Eastlink, Rogers, SaskTel, Shaw, Telus and Videotron – with transport/capacity rates 15% to 43% lower than the existing ‘interim’ charges (set by the CRTC in October 2016) and access rates 3% to 77% lower than the interim fees – and determined that these rates should apply retroactively to 31 March 2016. The operators launched an appeal against the measure, and the Federal Court of Appeal granted a temporary stay on the order on 27 September 2019.

On 15 August 2020 the government completed a review of wholesale rates, and whilst it did not issue any actual directives – with the CRTC’s own review ongoing – Minister of Innovation, Science & Economic Development Navdeep Bains gave comments which appeared to support the arguments of the large network operators, stating: ‘On the basis of its review, the Governor in Council considers that the rates do not, in all instances, appropriately balance the policy objectives of the wholesale services framework and is concerned that these rates may undermine investment in high-quality networks, particularly in rural and remote areas. Retroactive payments to affected wholesale clients are appropriate in principle and can foster cooperation in regulatory proceedings. However, these payments, which reflect the rates, must be balanced so as not to stifle network investments.’ TekSavvy voiced its disappointment at the government’s stance, claiming that it was creating uncertainty and rewarding anti-competitive behaviour, forcing smaller ISPs to raise prices, saying that ‘the federal Cabinet effectively directed the CRTC to increase wholesale rates.’