The big picture: TekSavvy’s ‘undue preference’ complaint against Rogers and Bell.

February 28, 2023

Throughout my career as a union representative in media I bored everyone with an overly precious aphorism about resolving employee grievances.

It’s never about what’s it about. It’s always about something else.

And so it is with independent ISP TekSavvy and its CRTC complaint arising out of the embers of the Rogers-Shaw merger litigation.

Last month TekSavvy responded to the Federal Court of Appeal’s approval of the merger by filing a CRTC complaint alleging that Rogers made the merger palatable only by striking a sweetheart deal with Vidéotron to provide the Québec-based telco with access to its Alberta and BC networks at favourable ISP wholesale rates.

The rates at which the major telcos sell wholesale access to their networks to independent ISPs are set in a ‘tariff’ of ‘just and reasonable rates’ by the CRTC —most recently in 2021— but ‘off tariff’ agreements are permitted and negotiated among the major telcos and between telcos and independents. 

Without knowing the confidential wholesale rates agreed between Rogers and Vidéotron, TekSavvy’s filing claimed they must be too generous to be anything other than an illegal ‘undue preference,’ contrary to section 27 of the Telecommunications Act.

Now the major telcos have all filed responses to Tek Savvy’s complaint. Rogers has provided the impugned rates negotiated with Vidéotron, redacted for the public.

We will see what the CRTC makes of them.

But all of that describes TekSavvy’s complaint far too narrowly as demonstrated by what TekSavvy has asked for, beyond the obvious request that it be offered the same deal Vidéotron is getting from Rogers to build an ISP business in the West.

To begin with, TekSavvy folded into its Rogers complaint a grievance against Bell for striking an OTA with the Québec-based ISP re-seller EBox, recently acquired by Bell.

The offending off-tariff privilege in this case would be Bell giving EBox network access to its prized ‘last mile’ fibre-to-the-home (FTTH); that fibre technology enables the sale of high-speed downloading to customers. This re-seller access to FTTH is not currently required by the CRTC and appears to be years away from becoming mandatory.

Bell’s regulatory filing makes short work of TekSavvy’s complaint. Since purchasing EBox a year ago Bell has absorbed its assets, dissolved the former corporation, and is running EBox as a flanker brand. There is no off-tariff agreement on favoured access to FTTH because Bell cannot sign an OTA with itself. Point final.

But winning that dispute is not really the point of TekSavvy’s application, either with respect to Bell’s FTTH or obtaining more favourable ISP rates from Rogers in two provinces where TekSavvy has a limited presence.

Neither is the real point of its application to put more heat on ISED Minister François-Philippe Champagne to reject the Shaw-Rogers merger now approved by the CRTC, the Competition Tribunal and the Federal Court of Appeal. The Minister will get around to that approval sooner or later and surely TekSavvy knows it.

No, the point of TekSavvy’s application is to light a fire under the CRTC on wholesale ISP rates and FTTH access across the country, especially in TekSavvy’s home turf in Ontario.

That’s why it’s real ‘ask’ of the Commission is to short circuit a number of tortoise-like regulatory reviews of wholesale ISP rates and access and immediately give TekSavvy lower rates and FTTH access on an interim basis.

That’s not going to happen either. 

As the telco filings point out, Tek Savvy’s real complaint is against the CRTC’s 2021 ruling on wholesale rates repealing its 2019 rate reductions because of costing errors in the Commission’s 2019 ruling. 

That’s a very long story that MediaPolicy.ca tells here.

As the telcos point out, TekSavvy’s appeal to federal cabinet to restore the 2019 rates failed. Its federal court appeal is pending (and doomed). It is out of time to file a ‘review and vary’ motion to the Commission itself. It is trying desperately to resurrect a dead file.

Except this file is anything but dead. Politically it is very much alive.

That life was injected by at least two things.

The Commission’s 15-year-long strategy to coax the growth of independent re-sellers as a competitive force in the ISP market is in tatters if one is judging outcomes by the number of re-sellers that have sold out to major telcos (VMedia, EBox, Distributel, and Oxia). 

The other intervention has come from Minister Champagne  —who would very much like this eternally troublesome file to cool down— in the form of his new Policy Directive to the CRTC.

That Policy Directive makes it clear the Minister is impatient for the CRTC to ‘do something’ to bring down ISP and mobility prices in Canada and to provide FTTH access to independents.

Judging from the messaging from newly appointed CRTC Chair Vicky Eatrides, she also wants to ‘do something’ and quickly.

TekSavvy’s wants that doing-something to be lower wholesale ISP rates.

We’ll see what regulatory magic the Commission has in mind. 

The CRTC has been convinced for twenty years that the two things needed to give Canadians better and cheaper Internet services are network investment and more competition, by which it is presumed to mean ‘more competitors.’ 

More investment and lower prices may or may not be perfectly compatible in whatever regulatory nirvana the CRTC comes up with.

In the meantime the Commission sails on, like a ship navigating to port through the fog.

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