The Coalition of Quebec Internet Service Providers is proposing that the federal telecommunications regulator force Bell Canada to drop its $100 charge for canceling a contract early and limit the mark-up that Bell Canada charges for its wholesale service among other recommendations in a formal complaint filed earlier this week.
The Coalition, which is comprised of 15 independent companies, has filed a formal complaint with the Canadian Radio-Television and Telecommunications Commission (CRTC) alleging that Bell Canada is engaging in anti-competitive behaviour regarding the provision of high-speed Internet services. Other recommendations include requesting Bell Canada to submit to the CRTC new rates based on current costs of ASDL equipment, which has dropped by 50 per cent in the last three years and reevaluating mark-up on competitor’s rates.
The group Wednesday announced it lodged its complaint under Part VII (other applications) of the Telecommunications Rules of Procedures with the CRTC. In its submission, the Coalition claims Bell’s retail rates for its Sympatico Basic ASDL services ($19.95 per month) violate CRTC directives because it is below the wholesale tariff, which, in turn, has caused a decline in subscriber base and revenue. From 2002 to 2004 ISPs’ market share slipped from 25 per cent to 15.7 per cent, according to the CRTC’s 2005 Telecommunications Monitoring Report, released last month.
“Competitors as a group have lost market share from 2000 to 2004 while incumbents like the ILEC Bell have been increasing their market share there,” said Sophie Léger, spokesperson for the Coalition of Quebec ISPs and president of Inter.net Canada. “Every year we lose customers that don’t get back to us.”
In an interview with ITBusiness.ca Bell Canada said the Coalition fails to establish any anti-competitive behaviour.
“The wholesale prices we offer to ISPs in our territory were negotiated last year with members of the industry, including the Canadian Association of Internet Providers and were approved by the Commission and are in fact lower than the retail rates charged by Sympatico,” said Mirko Bibic, chief, regulatory affairs, Bell Canada. The CRTC currently regulates wholesale prices for ISPs but not retail prices for consumers.
While the CRTC has a policy not to comment on any applications that it is currently reviewing, Scott Hutton, director general, competition, costing and tariffs at the CRTC, who will be overseeing this particular application, said the regulatory body has a framework in place to ensure there’s competition in the market.
“We have been making many decisions over the last couple of years to ensure that rates remain just and reasonable and that they are non-discriminatory and that folks like these have an opportunity,” said Hutton. “That’s something we’ll have to consider in this application.”
Mark Goldberg, a self-employed telecommunications consultant with Mark Goldberg & Associates Inc., said the CRTC is not going to regulate Internet access prices because it has established that these services are fully-competitive. He said regulating Internet pricing is “not in the consumer’s interest.”
“I don’t think it’s in Canada’s interest for us to be almost unique in the world for having regulation over retail Internet services,” said Goldberg.
Last month’s CRTC report also showed that cablecos dominate the Internet access services market with 48 per cent market share compared with 41 per cent held by the telcos like Bell.
“We at Bell are not the dominant provider of Internet access services,” said Bibic. “We are in vigorous competition between ourselves and others including the cable companies. When the prices are adjusted in the retail space it’s as a result of competitive forces.”
The ongoing pricing war between cablecos and telcos in the residential Internet market, said Léger, has led to a market that has become less competitive over the last five years. “There’s a price war starting on the market,” she said. “This is what has led the competitive market that we have seen in prior years totally disappear almost a year ago.”
Goldberg, however, said the Coalition’s use of “incumbent” in its press release statement when referring to ILECs and cablecos is inaccurate. The Coalition also states that Internet service was first introduced by ISPs over 10 years ago, which Goldberg argues, makes the Coalition an incumbent.
“(The Coalition) refers to local ISPs that are not given a legit opportunity to survive against incumbents who own 90 per cent of the market already,” said Goldberg. “It’s a little bit misleading.”