MTS, small ISPs launch campaign against CRTC ruling

MTS Allstream and a group of small internet providers and businesses have launched a lobbying campaign against a CRTC decision they say will destroy competition and cause broadband prices to skyrocket.

The campaign is aimed at overturning a December 2008 decision by the Canadian Radio-Television and Telecommunications Commission that ruled that Bell and Telus do not have to offer smaller competitors access to their broadband ethernet infrastructure. The CRTC justified the decision by ruling that the infrastructure of the two telecoms giants is not an "essential service," so the CRTC could not force the companies to offer access.

"Canadian small and medium-size businesses pay the most expensive prices for high-speed broadband among all OECD countries, except for the Slovak Republic, and this CRTC decision would only make things worse," said Chris Peirce, chief corporate officer at MTS, in a statement.

"It would re-open the door to re-monopolization of the kind of telecom services that are critical to the success and competitiveness of businesses across Canada. Bell and Telus would be better off. Everyone else will be a loser."

Winnipeg-based MTS has joined with the Canadian Association of Internet Providers (CAIP), which represents about 50 smaller ISPs, the Canadian Federation of Independent Businesses — which counts about 105,000 small and medium firms as members — and a dozen other companies in forming the Campaign for Competitive Broadband.

The group has launched a website, competitivebroadband.com, to rally public support for their cause.

Smaller internet providers have for years had regulated access to large phone companies' networks because the CRTC has ruled that parts of this infrastructure is impractical or prohibitively expensive to build. The networks were originally built when the companies were government-sanctioned monopolies, which meant they were effectively subsidized by taxpayers.

Smaller ISPs such as Eagle, Execulink and Teksavvy, have been allowed to rent portions of Bell and Telus networks to provide their own services as a means of boosting competition. MTS has done the same, providing businesses with internet and phone services outside its home province of Manitoba.

New networks are expensive

Bell and Telus argue that rivals shouldn't get access to newer networks, which have been built through hundreds of millions of dollars of shareholder-backed capital expenditure.

"The coalition's messaging is nothing more than a mélange of half truths, innuendo and outright fabrication aimed at undermining new billion-dollar investments in [next-generation networks]," said Michael Hennesy, head of regulatory affairs at Telus.

"What these competitors want is access to our new investments below market rates even as we are spending more in each of Quebec and Ontario than MTS invested nationally this year. Why build fiber networks if we have to provide them at less than commercial rates?"

The coalition argues that access should continue despite the fact that Bell and Telus are no longer monopolies because they are still profiting off the advantage their older networks gave them.

"If the only way competitors can get access to customers is to build completely new and parallel networks, alongside the ones that our tax dollars helped Bell and Telus build, it's completely unreasonable to expect this to happen," the coalition's website says.

Jacqueline Michelis, a spokesperson for Bell, said MTS is trying to confuse the issue.

"This is about high-capacity fibre networks to deliver services to large businesses. Networks can be built by the competition, are being built and continue to be built. MTS confuses a very important issue — no regulation does not mean no access."

The coalition's website enables visitors to identify their MP and send him or her a message about the issue by means of a form letter or their own personal text.

The campaign coincides with a petition to cabinet lodged by MTS earlier this year in regards to the CRTC decision. MTS wants the decision overturned, and cabinet has until Dec. 11 to decide on a course of action. It can agree with the company and overturn the decision, send the issue back to the CRTC for review or reject the petition.

All sides unhappy with CRTC

Bell and Telus are also petitioning cabinet on another similar decision that was issued very closely to the essential services ruling. The companies were ordered to provide MTS, CAIP and other wholesale customers access to matching internet speeds at a reasonable rate. If either company wants to offer download speeds of 50 megabits per second to their own customers, they must also allow MTS and others to offer the same speeds.

Both sides — Bell and Telus, and MTS — agree that the CRTC's stance on this issue contradicts its position on broadband ethernet access for competitors.

MTS was successful the last time it launched a public lobbying campaign. Two years ago, the company partnered with Quebec cable provider Vidéotron on the Coalition for Wireless Competition, a group that urged the government to adopt rules in an auction of cellphone airwaves that would benefit new entrants.

The government heeded the group's advice and reserved a portion of the spectrum for new companies in an auction held last year. MTS dropped its plans for a national cellphone network just before the auction began, when one of its partners backed out, but Vidéotron is planning on launching service in Quebec next year.

The CRTC has been under fire from all sides recently. An online petition to dissolve the regulator and replace it with a new body started last month and has attracted more than 6,600 signatures. The petition was started after the CRTC agreed to let Bell charge wholesale internet customers by their monthly bandwidth usage.