Chamber of commerce draws fire for backing Bell, Telus

The Canadian Chamber of Commerce is taking fire from local chambers, business groups and companies it represents for backing a move by Bell and Telus to overturn a CRTC decision on internet speeds.

Several smaller chambers, including those representing Winnipeg and Manitoba, the Canadian Federation of Independent Businesses (CFIB) and a number of internet providers say the larger chamber did not consult them on their views — an accusation the national body denies — and therefore does not speak for them.

"They consulted their corporate members perhaps but they did not consult with the Manitoba chamber," said Graham Starmer, president of the Manitoba Chamber of Commerce.

Starmer said he had met with representatives of the national chamber last week to discuss the issue.

"We made it clear to them it would be nice to do that."

Bell and Telus, two of Canada's biggest phone and internet providers, in March filed an appeal with the federal cabinet to overturn a ruling by the Canadian Radio-television and Telecommunications Commission made in December 2008. The CRTC ruled that both companies, as well as other big incumbent phone providers such as MTS Allstream, would have to provide smaller wholesale customers with the same internet speeds that they themselves offer to retail customers.

Big phone companies have been required to provide access to wholesale competitors for years because their older networks were built largely when the firms were government-sanctioned monopolies or Crown corporations.

In their petitions to cabinet, the phone companies said that providing competitors access to higher speeds — which are possible because of newer infrastructure — would create a disincentive to invest in such networks, an argument repeated by the Canadian Chamber in a May submission to the Privy Council Office. A number of other smaller chambers, including those representing Ontario, Quebec and Halifax also supported the companies' position.

The CFIB, which represents 105,000 small- and medium-sized businesses, supported the CRTC ruling in a letter to Industry Minister Tony Clement because the big companies, it said, still have an advantage over smaller competitors.

"Bell and Telus are relying on their large, pre-existing infrastructure to support their transition to fibre-optics while simultaneously insisting that any new entrant into the marketplace should be able to create a viable national alternative without the use of a government-subsidized ubiquitous network to fall back on," it said.

If the CRTC decision is overturned, incumbent phone companies could offer retail customers faster internet speeds while wholesale customers, who rent portions of their networks, would be limited to offering slower speeds on older equipment unless they build their own infrastructure.

Cabinet has until Dec. 11 this year to make a ruling on the appeals. It can reject them, overturn the CRTC or tell the regulator to review the decision.

Smaller chambers irked

Several chambers of commerce were angered by the national body's support after learning about the issue from their respective ISPs, according to Tom Copeland, head of Cobourg, Ont.-based Eagle and president of the Canadian Association of Internet Providers, which represents about 50 ISPs.

"There was a universal upheaval within the local chamber network," he said. "They were really [ticked] that the national chamber would presume to speak on this issue when there had been no consultation."

David Angus, president of the Winnipeg chamber, said the Canadian chamber holds periodic "parliamentary-like" meetings with its local members to debate and vote on general issues, which in the past has included a broadband policy. That policy stated, among other things, that competition between providers was the best way to spur new investment.

However, "the conclusions drawn in a letter of support for Bell and Telus go beyond that particular policy statement," he said.

"We're disappointed that they chose to throw support behind a specific application to the CRTC, largely because we don't agree with it and we're not sure that it's appropriate for the Canadian chamber to do," he said.

Shirley Ann-George, senior vice-president of policy for the Canadian chamber and author of the supporting letter to the Privy Council Office, said members were in fact consulted.

"[We] went out to all … members and asked for their views on this. The response that we got reflects the core value, and it's not about Bell and Telus — they were an example that was used — it's about something far more fundamental," she said. "Are we going to get next-generation broadband out to every community in this country? The only way we'll do that is if we have a structure that encourages those investments."

George did not know whether members' views had been solicited by email, letters, phone calls or in meetings.

"The Canadian chamber spoke for the chamber members at large," she said. "I don't know the specifics but we would have went out and asked our members."

Size factors into funding

According to its website, the national body represents more than 350 smaller chambers and 175,000 businesses across the country. As with many local organizations, the Canadian chamber receives funding from membership fees, which George said are partly decided by the size of the company.

The national chamber has 40 directors from across a range of industries, with heavier representation from the finance, energy, transportation and telecommunications sectors. Bell, its subsidiary Bell Aliant, and Telus have one director each.

'The Chamber of Commerce has come and drank Bell's Kool-Aid.' —Clayton Zekelman, head of MNSi

The directors are governed by a code of conduct that precludes them from showing favouritism toward their respective companies. Directors must "maintain a non-partisan approach when acting on behalf of the chamber," the code says.

Independent internet providers such as Eagle and Windsor, Ont.-based MNSi, which are members of their respective local chambers, said the national body is promoting the views of its bigger members over those of smaller ones.

"The chamber of commerce has come and drank Bell's Kool-Aid," said Clayton Zekelman, head of MNSi. "They're not speaking for their entire membership. I don't think they considered everything before they came out in support of Bell."

George denied the chamber's decision to support Bell and Telus was determined by the amount of funding each provides, or by their presences on the board of directors.

"Telecom is a critically important industry in Canada," she said. "It's a well balanced board that represents all areas of the country. We strive to represent all sectors of the economy."

The Winnipeg and Manitoba chambers said their positions were influenced after meeting with their local telecommunications incumbent, MTS Allstream. The company is appealing the same CRTC decision to cabinet, albeit a different part of it. MTS wants access to another faster ethernet backbone service, which the CRTC did not grant.

MTS, despite having national business operations, is not a member of the Canadian Chamber "because they have engaged in this type of flimsy analysis on Bell's behalf in the past," according to the company's head of regulatory affairs, Chris Peirce.

George said smaller ISPs and chambers are welcome to make their opinions heard through submissions to the Privy Council Office, which posts them on a public website.

Dissenting opinions missing

Some of the dissenting opinions, including letters from the Winnipeg and Manitoba chambers written in July, have not been posted to the site. Representatives at the Privy Council Office could not explain why the letters had not been posted. All other opinions on the site were submitted in April and May.

Guy Cassaday, president of the Woodstock, Ont., chamber — which also disagreed with the national body's position — said its decision-making process should be overhauled.

"It does suggest that perhaps the overriding organization and the individual member chambers need to sit down and look at the whole process of how we arrive at one of these positions," he said.

"I realize it's a challenging thing because in order to arrive at a position, do you have to have 100-per-cent agreement? That's probably not realistic, but I don't necessarily think any of these questions have ever been raised."