Bell is lobbying the Canadian government for a “free pass”

Bell is invoking an obscure, rarely-used parliamentary process to play politics with your Internet bill.

Photo Credit: Untitled by Danielle Scott (CC BY-NC-ND 2.0) https://flic.kr/p/8MKrzz

Bell Canada (BCE Inc.) is rolling the dice on a political gamble that, if successful, will mean the death of affordable Internet access for Canadian households and businesses.

On October 21, The Globe and Mail reported that BCE Inc. was appealing to the then freshly-elected Trudeau government, asking the incoming cabinet to overturn a pro-customer July ruling from the Canadian Radio-television and Telecommunications Commission (CRTC).

That ruling set out fair, open access rules that would allow smaller, more affordable Internet providers to access ultra-high speed fibre infrastructure.

Bell is invoking an obscure, rarely-used parliamentary process — a “Petition to the Governor-in-Council” — that enables it to ask cabinet ministers to overturn rulings made by independent, arms-length regulators like the CRTC.

At the same time, the telecom giant also asked the CRTC to “review and vary” the same ruling — a process in which the regulator can be lobbied to amend their decisions along a very narrow set of arcane criteria. The process is often invisible to the public and furiously debated between telecom lobbyists and public interest groups.

By launching simultaneous appeals, it is clear that Bell is, as one industry veteran put it, “playing politics with our Internet bills.”

Why, you ask? The short answer is that they wish to ensure that smaller ISPs don’t have a chance of succeeding in the market. Without rules mandating fair access to fibre networks, entrenched players like Bell can set unreasonably high rates for access in the hope of taking complete control of our Internet market.

And they don’t have far to go. Recent insights from researchers at the Canadian Media Concentration Research Project reveal that incumbent telecommunications firms such as Bell, Rogers, Telus, and Shaw collectively control 90.6% of the residential retail Internet access market.

However, the fact that non-incumbent providers have managed to attain 9% market share in an oligopoly market where the major players have had a multi-decade head-start, received huge government handouts, and persistent regulatory coddling, is an amazing success story, and we need to see that number go up to in order to get prices down for Canadians.

Right now, residents of Canada feel they pay way too much for their Internet access, and there is good reason for this. Canadian broadband prices are widely recognized as some of the highest in the industrialized world, with prices rising 11.3 percent between 2013 and 2014.

Increased ISP choice is one of the only hopes we have to help bring prices down. A recently released report by the Open Technology Institute examined 24 major cities for the “best deals” possible under $40 a month. Canada’s incumbent providers were nowhere to be seen. But TekSavvy, an independent ISP, was the only Canadian ISP to make the cut.

There’s no doubt that having a mixture of smaller players in the market helps. But how did we get here in the first place?

Through exactly the same type of rules that Bell is challenging in Parliament and at the CRTC.

You see, for years now, we’ve had fair open access rules for ADSL and cable networks, which led to huge savings and greater choice for many Canadians. At this point, extending the same type of rules to fibre is just common sense. But Bell appears to think differently.

On this front, Canadians face a choice: we can either extend fair rules that allow a variety of smaller, more affordable players to sell fibre services to everyday Canadians. Or we can let giants like Bell effectively regulate our market with high prices and restricted choice.

But if smaller players have nearly 9%, then what’s the big deal? Why do they need access to fibre?

Put simply: the future of the Internet is fibre. And if smaller, independent ISPs don’t have fair access to these networks, then it will be very hard for them to sell fast services going forward. Imagine an ISP that was only allowed to sell dial-up today, and you start to get the picture.

Now, one of the most important things to know about this whole controversy is that Bell is misleading Canadians, Parliament, and the CRTC.

The telecom giant is, once again, crying wolf — claiming that the CRTC ruling means Canada’s big telecom providers will be less likely to build fibre networks because it kills their incentive to invest.

This claim is complete nonsense, and nothing more than an empty threat. Let’s review the facts. Right after the CRTC announced the rules in July the following announcements were made:

Bell revealed plans for a huge fibre expansion to 1.3 million homes in Quebec and Ontario.

Telus then followed suit in October.

And Rogers has also said it will begin expanding fibre very soon.

And so forth…

Even the CRTC didn’t buy their investment argument. In their ruling (para. 141), they confidently state: “There are several reasons, however, why the negative impact on investment is not likely to happen to any significant degree.”

If Big Telecom is so concerned about the rules hurting their investment, then why are they investing so much?

Up until now, in Canada, there have been no rules for how Big Telecom providers have to provide access to their fibre networks. They were free to do as they please — a situation they are now desperately seeking to return to if their simultaneous appeals are any indication.

But they’ve done very little. Fibre deployment is below 5%, which is nearly half of the U.S. rate and about one-quarter of the OECD average. Meanwhile, countries like Japan have soared ahead with nearly 70% deployment.

It seems that, instead of actually investing, the big telecom operators were happier to sit on their aging, legacy networks, and put out press releases claiming they were planning to invest one day down the road.

A final note on investment: the best way to invest in our networks is to open them up and have a variety of players selling service. Greater choice and competition is what drives investment, whether in the networks or in the services. That, too, is just common sense.

The next question is how the Trudeau government, and Navdeep Bains, Minister of Innovation, Science and Economic Development, plans to respond. The Minister has within one year of the CRTC decision being challenged to respond.

If Minister Bains plays into Bell’s politicking by accepting their petition, then public interest organizations like OpenMedia, indie ISPs, the incumbents, and everyday Canadians will have 30 days to respond in an open comment period.

Over 30,000 Canadians have declared this an Internet Emergency, and are speaking out to demand Mr. Bains reject Bell’s request. What happens next, is up to Minister Bains, and officials at the CRTC.

In the meantime, the Internet freedom advocates at OpenMedia will be following this closely, and plan to push back on both the CRTC appeal, and the appeal to cabinet, should Minister Bains take Bell’s bait.

[15/11/21 Update: Since this piece was originally posted, Industry Canada has published Bell’s petition to the governor in council. Interested members of the public now have 30 days to comment. You can see official notice here speak out through OpenMedia’s Internet Emergency petition here.]