Shaw defends off-tariff agreements, Telus calls for review in TekSavvy complaint

Shaw Communications Inc. has argued that the type of off-tariff-agreement (OTA) that its hopeful future owner Rogers Communications Inc. has agreed to enter into with Quebecor Inc.'s Videotron to facilitate the Quebec-based company's acquisition of Shaw's Freedom Mobile are in fact pro-competitive and will contribute to the regulator's telecommunications policy objectives. The telecom company further argued that TekSavvy Solutions Inc. is " inappropriately requesting that the Commission take overbroad and disproportionate remedial action to rectify" what TekSavvy argues are violations of the Telecommunications Act. That fact that there are "dozens" of OTAs across the telecommunications market, Shaw added, and that there have not been any complaints about them before TekSavvy's recent Part 1, "directly contradict any notion that OTAs are inherently problematic or symptomatic of deep-rooted problems in the market for wholesale services." "They are, in fact, evidence of a robust market for wholesale internet services, and there is no compelling reason based on the present Application for the Commission to take drastic action in respect of the forbearance regime applicable to OTAs," Shaw wrote. TekSavvy is rather attempting to "relitigate" old battles over wholesale HSA rates, the company said. TekSavvy received some support from Cogeco Inc. in its attempt to have the commission review the agreements between Rogers and Quebecor, and between BCE Inc. and EBox Inc. While Cogeco stopped short of supporting TekSavvy's call for a reduction in wholesale tariff rates in its own intervention, the regional service provider did call for a launch of a review into the wholesale wireline service regime, "one objective of which should be to correct the regulatory asymmetry that exists between Incumbent Local Exchange Carriers (“ILECs”) and cable carriers for the provision of wholesale HSA services, which has unduly penalized cable carriers." Cogeco also called on the CRTC to pay closer attention to OTAs, and should adopt interim measures to better allow competitor access to aggregated FTTP services. When it comes to the proposed arrangements between Rogers and Quebecor, Cogeco particularly honed in on the free roaming services offered to Quebecor by Rogers in order to ease the entry of the Quebec company into the western provinces with its acquisition of Freedom. "Cogeco has similar concerns to TekSavvy regarding undue preference with respect to these wireless roaming service arrangements, as they clearly are preferential and are not available to other wireless competitors," Cogeco wrote. "Such arrangements could curtail Cogeco’s ability, as a potential new wireless entrant, to become a viable competitor in the wireless services market." TekSavvy did also find some support from the only one of the Big Three telecom companies it didn't name in its complaint: Telus Corp. The western incumbent argued that the CRTC should compel Rogers and Quebecor to produce the arrangements for review. "While TekSavvy’s request appears to be focused on wireline wholesale agreements, the Commission’s review should take into account the entire set of agreements that Rogers and Vidéotron entered into as part of Rogers’ acquisition of Shaw, including wholesale wireless services," Telus wrote. "The description of agreements between Rogers and Vidéotron by the Competition Tribunal in the Rogers-Shaw merger raise concerns that they confer a preference in favour of one or both parties." Like Cogeco, Telus brought up the issue of free roaming services. "This raises a significant concern that, if the Rogers-Shaw transaction is approved by the Minister of Innovation, Science and Industry, Rogers will be selling telecommunications services to Vidéotron (which will come to own Freedom) far below Rogers’ own cost," Telus wrote. "Even if services are not being sold far below cost, Rogers has not, as far as TELUS is aware, offered similar terms (i.e. free domestic roaming) to its other competitors. This alone is enough to launch an inquiry into whether there is an undue preference in favour of Vidéotron." Telus did defend the existence of OTAs, and wrote that "are generally beneficial and should continue to be permitted," but added that the arrangements between Rogers and Quebecor are "not commonplace agreements for the provision of wholesale telecommunications services." When it comes to the general existence of OTAs, TekSavvy found some support from the Public Interest Advocacy Centre (PIAC). "The existence of OTAs alongside tariffed rates is the original sin of rate regulation," PIAC wrote. The "ability of telecommunications service providers to enter into OTAs, that is, to negotiate confidential deals, utterly undermines any tariff framework the Commission implements." PIAC did oppose TekSavvy's proposed remedy of allowing all competitors access to the same conditions as Quebecor, and instead advocated for the addressing of outstanding proceedings. "There are numerous outstanding proceedings that directly address the underlying issues," PIAC wrote. "The Commission’s focus should be on concluding these protracted proceedings, and on phasing out the anti-competitive, opaque OTA framework." -Reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Paul Park at ppark@thewirereport.ca

Shaw defends off-tariff agreements, Telus calls for review in TekSavvy complaint

News | February 23, 2023

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Shaw defends off-tariff agreements, Telus calls for review in TekSavvy complaint

News | February 23, 2023

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