City Wide wants GiC to force relocation of Eastlink’s TPIA point of interconnection

City Wide Communications Inc. is asking the Governor in Council to reverse a CRTC decision which allows Bragg Communications Inc.’s Eastlink to charge what the competitor ISP is calling “monopoly rates” for transport services in Nova Scotia. “City Wide seeks urgent relief to address anti-competitive conduct by Eastlink that is harming competitors and increasing the cost of broadband internet access and other telecommunications services for Nova Scotians at a time when many Nova Scotians are already struggling with a rise in the cost of living,” the company wrote in its petition dated Aug. 12. In March the commission denied an application by City Wide requesting the CRTC order Eastlink to move its Nova Scotia third-party Internet access (TPIA) point of interconnection (POI) to downtown Halifax, N.S. The commission determined that Eastlink’s TPIA point of interconnection in Pennant Point – located 30 km from downtown Halifax – subjected City Wide to a disadvantage but that it was not undue or unreasonable. City Wide is requesting that the Governor in Council direct the CRTC to order Eastlink to relocate, at Eastlink's own cost, its TPIA POI to a more central location in Halifax where there are competitive options available for the supply of transport. City Wide said the CRTC erred in its conclusion that the company has increased its consumer base during the past several years and therefore Eastlink’s POI was not a hindrance on competition. “In fact, the rate of growth of City Wide’s customer base has been declining significantly and persistently in recent years, and City Wide’s ability to invest in its own networks and innovative services and to sustain its contribution to the affordability of internet services in Nova Scotia is threatened,” it argued in the petition. City Wide asked the Governor in Council to vary the CRTC’s decision to state that Eastlink’s transport services to Pennant Point shall be rate regulated by the CRTC if it determines that Eastlink’s POI does not need to be moved. Eastlink, as the incumbent cable company in Nova Scotia, is mandated by the CRTC to provide TPIA service to competitors such as City Wide. The rates for transport are generally not regulated by the CRTC, therefore, Eastlink’s competitors – the majority of whom have its network points of presence in the urban core of Halifax – must negotiate on commercial terms and conditions to interconnect at its TPIA point of interconnection. “The CRTC approved Eastlink locating its TPIA POI for Nova Scotia at Pennant Point partially because Eastlink submitted that its data centre at Pennant Point was served by competitive transport suppliers. However, as City Wide and other competitors soon found out, this was not the case,” the company wrote in its petition. City Wide argued this allows Eastlink to have a monopoly. City Wide provided data from an economic report it commissioned economist Zhiqi Chen to conduct. According to the Chen Report the monthly cost of Eastlink’s transit services at Pennant Point is 5.86 times that of the similar internet bandwidth available in the core of Halifax. City Wide pays 2.59 times more for transport services, according to the report, which compared the price City Wide paid from Pennant Point to a location in Toronto and from a different supplier for a similar link from the core of Halifax. “The exorbitant transport rates that Eastlink charges to competitors in Nova Scotia for transport to Pennant Point must ultimately be passed onto Nova Scotian consumers in the form of higher rates for Internet services than would otherwise be the case if competitors had access to competitive transport suppliers. These exorbitant transport rates also reduce the amount of capital that competitors have available to invest in developing and providing innovative telecommunications services to Nova Scotians,” City Wide argued. In its initial application to the CRTC, City Wide argued that building its own fibre route to Pennant Point would be unnecessary and an inefficient expenditure, considering that competitive transport could be built or leased at a lower cost in downtown Halifax. It said building its own route would be a financial risk as Eastlink could choose to move the location before City Wide had a chance to make a return on its investment. The company reiterated those arguments in its petition to the Governor in Council. “The actual costs of interconnecting at the Pennant Point POI go beyond supra-competitive pricing of transport and transit services. Eastlink routinely subjects City Wide to prolonged delays when responding to service orders and quote requests. These delays force City Wide to delay business activities (such as marketing and promotions) because it constrains City Wide’s capacity to provide the service to its customers,” the company argued. City Wide said Eastlink’s POI location “clearly” gives it an undue preference contrary to the Telecommunications Act and the relief sought is in line with the objectives of the act. It further argued that the CRTC disregarded the Telecommunications Act when it rejected its request to appoint an inquiry officer to investigate Eastlink’s network and determine an appropriate new location for Eastlink’s POI, nor did it proceed in some other manner to vet alternate possible locations. “The CRTC did not provide any explanation in as to why it declined to use the powers granted to it under the Telecommunications Act to investigate Eastlink’s network. This failure is particularly shocking because, late in the proceeding, evidence emerged of a clearly superior location for Eastlink’s TPIA POI for Nova Scotia.” Regardless of the Governor in Council’s determinations with respect to the location of Eastlink’s TPIA POI for Nova Scotia, City West requested that the Governor in Council vary the decision and direct the CRTC to initiate a proceeding to examine the need to regulate the supply of transport services throughout Canada “since the adverse consequences of the lack of competitive transport on the affordability of Internet access is not limited to the Eastlink Pennant Point situation.” City Wide also appealed the decision in a review-and-vary application filed with the commission. It said the decision caused “a significant barrier to competition and the delivery of competitive internet access services to consumers,” and increased City Wide’s costs by some 12 per cent. “An increase of this magnitude greatly exceeds the Competition Bureau’s threshold for ‘significant’ in the context of the hypothetical monopolist test,” City Wide wrote in its application. Eastlink responded last month arguing that City Wide’s lack of growth is due to the presence of other TPIA competitors in the province, rather than the location of its points of interconnection. – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

City Wide wants GiC to force relocation of Eastlink’s TPIA point of interconnection

News | August 15, 2022

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City Wide wants GiC to force relocation of Eastlink’s TPIA point of interconnection

News | August 15, 2022

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