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Court orders temporary stay of CRTC ruling to lower internet rates

DO NOT USE Toronto Star logo DO NOT USE Toronto Star 2019-09-30 Josh Rubin - Business Reporter
a screenshot of a computer: Six of Canada’s largest internet service providers asked the court to overrule a decision by the CRTC to force them to provide smaller rivals with access to their networks at lower wholesale rates. © Charles Krupa Six of Canada’s largest internet service providers asked the court to overrule a decision by the CRTC to force them to provide smaller rivals with access to their networks at lower wholesale rates.

Independent internet service providers say they’re frustrated by an interim court ruling which puts a hold on a CRTC decision that ordered Canada’s biggest telecommunications companies to provide smaller rivals with access to their networks at lower wholesale rates.

Six of Canada’s largest internet service providers, including Bell Canada and Rogers, asked the court on Sept. 13 to overrule the August decision by the Canadian Radio-television and Telecommunications Commission.

The phone and cable companies argue that the CRTC exceeded its powers and made errors when it decided had they had overcharged Canada’s small- to mid-sized internet service providers under interim wholesale rates set in 2016.

Justice Yves de Montigny decided late Friday that the CRTC’s new wholesale rates will be suspended while the case is before the Federal Court of Appeal.

The judge also said that if the large internet services providers lose their appeal, they will be on the hook to repay overcharges collected from their wholesale customers since March 2016.

The head of the Canadian Network Operators Consortium, which represents several smaller internet service providers, was frustrated by the stay.

“After three and a half years and thousands of pages of documents, and speaking to people from the industry, the CRTC decided that Canadians were paying too much for their broadband,” said Matt Stein, president and chairman of CNOC, as well as CEO of Distributel. “Now the incumbents are delaying things further. I’m disappointed by this ruling, but not surprised.”

Stein expects a ruling on whether or not to issue a full stay of the CRTC decision could come by the end of October.

“The impact of an interim stay will be minimal,” said Stein.

Janet Lo, vice-president of consumer legal affairs at TekSavvy, said the company would be keeping lower-priced plans — announced in the wake of the CRTC ruling — in place for now.

“We’re disappointed that the big incumbents continue to dispute what is a very considered, studied CRTC decision to correct inflated wholesale rates down to more reasonable levels. Canadians can’t keep waiting for competition to deliver lower prices,” said Lo.

In its submission to the court, Bell estimated that its share of retroactive payments ordered by the CRTC would be about $100 million. A separate filing on behalf of six cable companies estimated their share would be $225 million.

In agreeing to the temporary stay of the CRTC’s order, Montigny writes that the smaller ISPs do not dispute the seriousness of the issues raised in the appeal.

“I am also satisfied that the implementation of the CRTC Order could result in a permanent market distortion which could be extremely difficult to remedy afterwards,” Montigny writes.

He concludes that the “balance of convenience favours the status quo” until the appeal is heard but stipulates that the large ISPs must “provide an undertaking” to pay damages if their appeals are dismissed.

With files from The Canadian Press

Josh Rubin is a Toronto-based business reporter. Follow him on Twitter: @starbeer

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