Telus says unfair advantage claim based on ‘half-truths and innuendo’

A campaign claiming the Canadian Radio-television and Telecommunications Commission (CRTC) has given incumbent telephone carriers an unfair advantage in offering broadband Internet services is “nothing but a collection of half-truths and innuendo,” according to Telus Corp.

The Campaign for Competitive Broadband launched yesterday and is spearheaded by Winnipeg-based MTS Allstream Inc. and a coalition of more than two dozen independent Internet companies across Canada. The group is lobbying against a CRTC decision made Dec. 11, 2008 that would give incumbent carriers Telus and Bell Corp. the right to negotiate the wholesale price of high-speed fibre connections providing service to homes and businesses.

“I’m not sure who’s jumping on board except people who want to ensure the commission will force the companies investing in next-generation infrastructure in this country to share it at unfair rates,” says Michael Hennessy, senior vice-president of regulatory and government affairs at Telus.

At stake is the so-called last-mile of connection that links customers to the Internet. Bell and Telus are currently regulated for their copper line infrastructure and required to sell it to wholesalers at cost. Now, those wholesale buyers want the same right for new fibre line that is being laid down.

The CRTC denied an appeal by MTS Allstream made May 21, 2008. In its decision, the CRTC says the fibre networks could be duplicated by competitors and there are also other substitutes for broadband Internet access.

But wholesale Internet Service Providers (ISP) disagree with that decision. They claim that access to affordable broadband Internet is at risk and there will be fewer options available to customers.

“Our concern is really for competition in the future,” says Keith Stevens, chairman at Execulink Telecom. “Customers want higher speeds and if we couldn’t give them that, they would go to Bell.”

Execulink Telecom, a Burgessville, Ont.-based ISP, has been providing services to the south-western Ontario region for 105 years. Since the mid-90s it has been offering Internet service as a result of having access to Bell’s infrastructure and building its own infrastructure.

Now Bell won’t share its shiny, new network.

“This is a turning point in telecommunications,” he says. “For along time the government has tried to encourage competition … and now Bell’s trying to restrict it.”

The campaign is appealing to Industry Canada and the cabinet to overturn the CRTC decision or at least call for a review.

It has until Dec. 11 to do so – one year after the CRTC decision was made. The campaign’s Web site features a countdown to that day, as well as an opportunity for customers to sign a petition for Minister of Industry Tony Clement.

Customers are also encouraged to contact their local Member of Parliament.

The timing of the campaign is designed to take advantage of a possible Fall election, says Bill Campbell, president with Vancouver-based Skyway West Business Internet Services.

“We hope that an election will bring attention to this issue and others raised before the CRTC in the last year,” he says.

The campaign is exploiting a tumultuous political climate for maximum public impact, says telecom analyst Mark Goldberg, head of Mark H. Goldberg & Associates Inc. in Thornhill, Ont.

“They’re trying to whip up popular emotion based on false statements,” he says. “It appears to be an attempt to build-up a grassroots movement to influence cabinet.”

The campaign is making claims that aren’t true, Goldberg adds. It claims that Canada is one of the most expensive countries in the OECD to subscribe to broadband Internet, with only Mexico and Turkey being more expensive. It also claims that Bell and Telus were subsidized for many years by taxpayers to build their networks.

The OECD rating was given unfairly to Canada after a review that looked at only a small sample of Canadian advertisements, Goldberg says. And the government deregulated the phone industry in 1992, meaning Bell and Telus no longer have monopolies.

Canada might not be the worst when it comes to broadband Internet service, but it’s performance in this area leaves much to be desired.

A study conducted by the University of Oxford business school and sponsored by Cisco puts Canada near the back of the pack when it comes to broadband quality. Canada is beat out by the likes of Slovakia and Hungary in the study.

Given that sort of review, the CRTC might want to reconsider its decision, says David Fewer, acting director of the Canadian Internet Policy and Public Interest Clinic in Ottawa.

“I’m pretty skeptical that the decision was correct,” he says. “We want to be pretty cautious before throwing competitors to the wolves.”

But reversing that decision could impinge upon Telus’ ability to build out its network, Hennessy says. Telus is trying to compete with cable carriers that are offering faster broadband Internet speeds. There are also wireless broadband options currently available or soon to be available in Canada.

Telus isn’t against sharing its fibre network, he adds, but it does want to negotiate the fees without being regulated.

“It’s not built with the help of tax dollars, it’s built with shareholder investment,” the Telus executive says. “To say there’s a monopoly is driving so far back into the past that it’s silly.”

But its nearly impossible to build that last mile of fibre to the home for multiple carriers, members of the coalition argue. They want to continue to enjoy the same deal they’ve had with the copper-based infrastructure.

“If we were to purchase fibre at a commercial rate, it would hurt our ability to make a profit,” Campbell says.

The cabinet has until Dec. 11 to take action on the CRTC decision.

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