Chatham, Ontario-based independent internet provide TekSavvy called for the removal of the Canadian Radio-television and Telecommunications Commission (CRTC) chairperson Ian Scott over the wholesale rates decision released on May 27th. VMedia, another independent internet service provider (ISP), called for Scott to resign.
TekSavvy petitioned the Liberal government, asking it to overrule the CRTC decision. On the 27th, the commission handed down a decision on wholesale rates, backtracking on its 2019 decision. As a refresher, wholesale rates are mandated amount that larger telecom companies can charge small ISPs for access to the network.
In August 2019, the CRTC set final wholesale rates after implementing interim rates in 2016. The final rates were significantly lower than the interim rates, which the CRTC found to be “severely inflated.” Further, the CRTC set the final rates retroactively, meaning incumbents would need to pay back the difference for the interim rates.
Incumbents quickly challenged the decision both in court and through other channels. The Federal Court temporarily suspended the 2019 decision before dismissing the incumbents’ appeals. However, the CRTC granted the incumbents’ stay request. The May 27th decision was the culmination of that stay, with the commission concluding it made errors with the initial decision. It also set the interim rates as final.
The CRTC’s flip-flop has been met with criticism from smaller ISPs and from advocates. Now, TekSavvy and VMedia have called for the removal or resignation of CRTC chairperson Scott.
“The decision raises serious doubts about the leadership and competence of the CRTC, and the integrity of its process,” said Alexei Tchernobrivets, CEO of VMedia, in an email release.
“[The decision] sells out Canadians to benefit the dominant players. CRTC chairperson Ian Scott should resign, and Parliament should launch an immediate investigation into this incoherent outcome and whether political and corporate influence impacted this decision.”
TekSavvy petition calls on federal cabinet to take multiple steps
TekSavvy was more direct in its petition of the Liberal government. In the petition, TekSavvy asked the federal cabinet to fulfill the Prime Minister’s mandate to “support consumer choice,” detailing several steps the cabinet should take. The first step: remove chairperson Scott, or require Scott to recuse himself from decisions involving wholesale- and facilities-based competitors.
In a separate blog post, TekSavvy accused Scott of bias towards facilities-based competition. Facilities-based competition refers to competition based on service delivery, such as the network or infrastructure, rather than based on the service itself (service-based competition). Europe, for example, operates on the service-based philosophy, requiring large incumbent providers to lease network access to competitors, which contributes to lower overall costs for consumers.
Additionally, the TekSavyy petition calls on the cabinet to reinstate the CRTC’s 2019 order, noting that it was already reviewed and upheld by the Federal Court of Appeal and that the Supreme Court of Canada also opted not to modify the 2019 order.
TekSavvy requested the cabinet to require incumbents to remit all retroactive payments owed based on the 2019 order and reaffirm the ‘Phase II costing’ as the appropriate method for determining wholesale rates. Finally, the ISP asked that the cabinet direct the Commissioner of Competition to conclude its investigation into the anti-competitive activity of incumbents.
