Federal Court could hold wholesale rate hearing on Friday

A Federal Court judge is asking BCE Inc. to explain why it should hold an oral hearing about whether it should review and freeze a CRTC decision that slashed wholesale internet rates big telecoms charge to resellers. Judge Yves de Montigny issued a direction on Wednesday asking Bell to provide reasons by Thursday morning as to why such a hearing should take place and that, if a hearing is allowed to proceed, it would occur on Friday afternoon. If respondents intend to oppose the motions, they have until Friday at noon to do so, the judge said. The Federal Court direction comes at the end of a fast-moving series of developments that started on Friday, when the CRTC sent the telecoms a letter ordering them to submit by Wednesday their new tariffs for wholesale internet they charge to resellers after an August 15 decision cut those rates and forced the carriers to fork over a total of more than $225 million in retroactive fees. On Tuesday, Bell filed a request with the Federal Court to hold an expedited oral hearing on Wednesday to stay the decision ahead of the CRTC deadline. Judge de Montigny said the telecom didn’t provide reasons why it should. “The Registry will ask them to explain...why they are of the view that their motions cannot be decided on the basis of the record,” the judge said. Bell said in its Tuesday complaint that the CRTC “is insisting that Bell implement the Decision by filing revised rates, effectively pre-empting this Court’s decision on Bell’s outstanding motion for an interlocutory stay, and inviting Resellers that have not already done so to rely on those revised tariffs to lower their prices, thereby accelerating the irreparable harm described in Bell’s motion for an interlocutory stay. “If Bell is forced to file revised tariffs now, only to be revoked if its pending motion for a stay is granted, the result will be significant and irreparable market disruption and market distortion and will exacerbate the irreparable harm Bell is already suffering as a result of the Decision,” Bell said in court documents filed on Tuesday. Faced with today’s CRTC deadline and no forthcoming court decision on its stay application before then, Bell did not respond to a question about whether it would file tariffs to meet the regulator’s deadline despite its contestations. Despite Bell’s concern with filing tariffs before a court decision on the matter, Telus Corp. had already submitted revised rates on September 16, the CRTC said in the letter, which also noted that the regulator is aware of the two proceedings -- request for review and stay -- before the court. Because the court hadn’t yet considered the motions of the big carriers, the CRTC said its order was still in effect. The telecoms had asked the Federal Court earlier this month to review the case on the grounds the CRTC allegedly erred in its August decision by partly relying on outdated guidelines that don’t apply to current technologies. They also requested a stay of the decision to let the case play out. “If is permitted to take effect while the Cable Carriers pursue their proposed appeal to this Court, the consequences will be immediate, severe and potentially irreversible,” the cable companies said. “Resellers are already able to offer lower retail prices to consumers while generating attractive returns for their shareholders, despite not bearing the costs or risks associated with building their own networks,” they said, adding resellers “will now be able to offer retail prices that undercut unfairly the prices that the Cable Carriers are able to offer to end-users.” Financial analysts have been divided on what kind of impact the new rates would have on the industry. In a September 4 report, TD Securities analyst Vince Valentini wrote that he believed there were “good odds” that the wholesale rate decision will be overturned, “or at a minimum revised in favour of the facilities-based telecom and cable players.” On September 17, small telecom representative the Canadian Network Operators Consortium (CNOC) asked the court to grant it an extension into October to reply to the big telecom motion, which was granted on Friday. The court files reference the reduction in investment that some of the facilities-based telecoms announced after the August decision. They also cite the Competition Bureau’s study on broadband, released earlier this year, that acknowledged the investment impact that wholesale decisions can have, though it noted that the CRTC must strike the right price balance to both allow for continued investment and offer Canadians competitive internet rates. TekSavvy Solutions Inc. -- the largest independent ISP in the country, which announced that it was reducing internet prices it charges customers in response to the reduced rates -- is not named as a respondent by the big telecoms. In a motion to the Federal Court, TekSavvy has requested that it be named on all current and subsequent motions because it is directly impacted by a stay decision, considering its reduced its rates. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Federal Court could hold wholesale rate hearing on Friday

News | September 25, 2019

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Federal Court could hold wholesale rate hearing on Friday

News | September 25, 2019

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