CRTC considers fining Iristel and Telus up to $1.2M each for 'self-serving' actions

The Canadian Radio-television and Telecommunications Commission (CRTC) is looking for feedback on whether it should impose fines on Iristel and Telus Communications Inc., after years of dispute between the two companies.

In a notice posted to its website late last week, the commission said its preliminary view is fining both companies in the range of $750,000 to $1.25 million each would be appropriate.

This is the latest development in a spat between the two companies over the routing and termination of phone calls to the 867 area code in Northern Canada.

In August 2018, Iristel — the parent company of Ice Wireless — alleged in a complaint to the CRTC that Telus was actively blocking calls from their customers to Ice Wireless customers, and had been doing so since late May of that year.

Telus insisted it was not blocking any calls. Instead, in a September 2018 submission to the CRTC it said it was taking steps to "control the flow of traffic to Iristel."

Telus argued it was doing this because Iristel was engaging in traffic stimulation, a practice where Iristel numbers in Northern Canada are assigned to services not located in the North, illegally boosting its profits from a previous agreement with Telus.

Commission points to both companies' faults

The commission has now concluded Iristel gave itself an "undue advantage" by allowing the 867 area code to be used by customers outside of the territories.

Both Iristel and TCI [Telus Communications Inc.] acted in a way that was self-serving.- CRTC

The 867 area code covers all of Northwest Territories, Nunavut and Yukon.

Iristel's actions increased connection costs for other carriers, said the CRTC, and caused economic harm while generating revenue for itself – through charging customers for long distance call termination.

As such, the commission says that "regulatory intervention is required" to curb traffic stimulation activities in terms of Iristel's 867 phone numbers.

In an effort to significantly reduce the incentive for traffic stimulation in relation to those 867 area code numbers, the commission says it is lowering Iristel's long distance call termination rate. 

A termination rate is what the telephone company of the person originating a long distance call pays to the telephone company of the person receiving it, for completing the call.

Prior to the CRTC's announcement, Iristel's long distance call termination rate was $0.038 per minute. The commission has lowered it for now to $0.0098125 per minute. 

The change, which the commission said becomes final 90 days from the date of the decision, is to take effect retroactively to Nov. 23, 2018.

The commission also concluded that Telus's actions of "reducing the capacity of certain toll circuits" between around May 29 and Nov. 28 of 2018, "unjustly discriminated" against Iristel and Ice Wireless, their customers, and Telus's own customers. 

The CRTC says this discrimination was done by "deliberately reducing the ability to complete calls to telephone numbers in the 867" area code.

"Both Iristel and TCI [Telus Communications Inc.] acted in a way that was self-serving," said the CRTC.

"Such behaviour, which undermines the establishment of an orderly telecommunications system in Canada and the efficiency and competitiveness of that system, cannot be tolerated."

In September 2018, a woman in the Northwest Territories said she missed two days worth of calls from her hospital while she prepared for cancer surgery, blaming it on the spat between the two Canadian cellphone providers.

CRTC asks for input on penalties

The commission is inviting the public to comment on whether or not they think imposing fines on Iristel and Telus is appropriate — and if so, what penalty amount each company should receive.

Neither company agrees with the prospect of penalties.

Samer Bishay, CEO of Iristel, said his company is "very disappointed" with the CRTC for considering the possibility of a penalty for Iristel.

"They've put an innocent party with a guilty party," said Bishay. "The facts will prove our innocence."

A spokesperson for Telus, Richard Gilhooley, told CBC in an email that the company is "surprised and disappointed" that the CRTC is considering a penalty against Telus, "and intend to oppose it vigorously."

"We are also considering whether to appeal the decision," Gilhooley added.

Submissions must be filed by Sept. 14.

This can be done by sending them to the secretary general of CRTC in one of several ways: by completing the online form, by mail to CRTC, or by fax to 819-994-0218.