MTS, small ISP take internet fight with Bell to court

MTS Allstream and independent broadband provider Acanac are asking a court to overturn a CRTC decision that grants Bell Canada the right to impose new internet charges on wholesale customers.

The companies, respectively based in Winnipeg and Toronto, have filed a notice of motion with the Federal Court of Appeal that says the regulator made an "error of law" by allowing Bell to go ahead with its usage-based billing plan.

Under the plan, Bell will institute new charges on wholesale customers — companies that rent parts of its network to provide their own internet services, including MTS and Acanac — based on their monthly bandwidth consumption. Bell will set each end user's monthly allowance, then charge extra for every gigabyte above the limit.

The Canadian Radio-television and Telecommunications Commission provisionally approved the usage-based billing plan in early August. A few weeks later, the regulator asked Bell to justify the prices it intends to charge.

In their filing, MTS and Acanac say the CRTC is bound by the Telecommunications Act to ensure that rates for services it regulates are just and reasonable at all times. But since Bell doesn't have to pay itself those rates, the filing says, they are in fact unfair.

"Nowhere [in the order] is there any indication that the commission considered a usage-based charge to be just and reasonable and if it did, what evidence on the record it considered in coming to such a conclusion," court documents say.

Jacqueline Michelis, a spokesperson for Bell, said the regulator made the right decision.

"There is no error in law that would justify the court granting leave," she said.

Companies are able to file appeals with the courts over CRTC decisions if they believe the regulator has made an error in law, or if it has acted outside of its jurisdiction.

MTS and Acanac are part of a campaign started last week to overturn another CRTC decision, which limits wholesale competitors' access to the broadband infrastructure owned by the likes of Bell and Telus. MTS is looking to have that decision, which the CRTC made last December, overturned by cabinet.

The Coalition for Competitive Broadband seeks to muster public support for the appeal, which cabinet must act on by Dec. 11. The government can overturn the CRTC's decision, and send it back to the regulator for a review, or reject the appeal.

Industry analysts have said the access ruling and the usage-based billing decision have left MTS, which sells internet service to businesses across Canada, and smaller wholesale ISPs fighting for their lives.