MONOPOLY CAPITALI$M

Beanfield asks CRTC to tear down Rogers' 'bulk agreements' with condo developers

Sammy Hudes, The Canadian Press

Independent telecommunications provider Beanfield Metroconnect is asking the industry regulator to outlaw arrangements between carriers and developers that provide turnkey internet service for all units of a particular condo building.

In an application filed to the CRTC last September, Toronto-based Beanfield took specific aim at Rogers Communications Inc. for its use of "bulk agreements," arguing such deals "effectively eliminate end-user choice" and "constitute an undue advantage" that limits competition.

It wants the commission to declare that Rogers' bulk agreements violate the Telecommunications Act and require it to terminate such deals.

Todd Hofley, Beanfield's vice-president of policy and communications, said bulk agreements create "monopolistic islands" where rival providers can't compete for residents' service as easily. The agreements typically cover the first five to eight years after the condo is built and see residents pay for internet through their rent or condo fees.

"We are happy to compete against the incumbents whenever that playing field is even and is level," Hofley said.

While Beanfield's application focuses on Rogers' bulk deals, Hofley said it's a practice that has become increasingly common over the past five years by various major carriers, making it harder for companies like Beanfield to sign up customers in new residential buildings.

He said a CRTC ruling in his company's favour could set a precedent that prevents all carriers from entering into them with developers.

Beanfield estimates bulk deals are in place for close to half of all new condo or apartment developments in the Toronto area. That's based on a survey of 110 projects the company reached out to for potential access since January 2022.

Of those, 54 projects already had bulk deals spanning almost 40,000 units, it told the CRTC.

Hofley said bulk agreements also pose a safety issue when there's an outage.

"If you have a building that is bulked by Rogers and everybody's internet is on Rogers, the building's elevator phones are on Rogers, the building's concierge and security system is on Rogers, and that system goes down, you're blind. There's nowhere for you to turn," he said.

"I think we all learned during the Rogers outage of July 2022 how important resiliency in our telecommunications infrastructure is."

Beanfield plans to raise the issue when its representatives appear this week at a CRTC hearing into wholesale high-speed access service.

Rogers spokesman Cam Gordon pointed to the company's official response filed with the CRTC last October to Beanfield's submission. 

Rogers argued its bulk billing arrangements "do not eliminate end-user choice ... and do not constitute an undue preference."

"In fact, these arrangements, which have consistently been endorsed by the commission in the past, enable (multi-dwelling unit) residents to benefit from discounted broadband prices and innovative in-building communications amenities," wrote Rogers vice-president of regulatory Pamela Dinsmore.

Other telecom companies, including Bell Canada, Telus Corp. and Eastlink, also opposed Beanfield's application in interventions filed to the CRTC.

Dinsmore wrote that bulk deals do not prevent rival carriers from selling their services directly to individual residents, even if they live in a building where an agreement with a particular provider has been signed.

"They can — as Rogers does in these circumstances — seek access to … build out fibre to individual units in response to customer service requests or wire the entire building at any time," she stated.

Hofley said Rogers' argument amounts to encouraging residents to pay twice for overlapping services, "which is a fascinating idea of how competition is supposed to work."

"The problem is that they can't pay twice. Because if the market is gone, nobody else is going to build into that building," he said.

Gregory Taylor, an associate professor with University of Calgary's communications, media and film department, said it can be "very difficult to dislodge" an incumbent carrier where a bulk deal exists.

"There is really no way from a financial standpoint for a competitor to come in and offer service," he said.

"The incumbent company will already have everyone locked up as a customer, so getting people to change is difficult. It involves an investment from the new companies coming in."

But he said that for some residents, the convenience factor may be worth the lack of choice. He likened the situation to moving into an apartment that's already furnished.

"Anyone in Canada who has dealt with the hassle of trying to find quality internet service will tell you that often, it can be a pain," said Taylor, adding that buildings with bulk deals generally have high-quality fibre set up.

"In this case, you move into a building and it's there and it's ready for you."

The CRTC said it is reviewing Beanfield's application and other companies' rebuttals but could not yet address the arguments.

"Given that this application is currently before the CRTC for consideration, we are unable to comment," said spokeswoman Mirabella Salem in an email.

With major cities across Canada dealing with questions of density and how to address the national housing shortage, Taylor said Beanfield's application raises an issue with significant ramifications.

"As we build more and more high-density housing in this country, we're going to have to be able to address this question of, 'OK, who provides the wired internet service, the fibre lines into these new dwellings?'" he said.

"Everybody recognizes this now is an essential service. Given what we've learned through the COVID era, this question of access to buildings is an increasingly important question and one which the CRTC and the government cannot duck."

This report by The Canadian Press was first published Feb. 12, 2024.

Bell denied stay of CRTC decision allowing access to its fibre network

Sammy Hudes, The Canadian Press

The Federal Court of Appeal has rejected BCE Inc.'s request for a stay of a regulatory decision that will allow independent companies to sell internet services to their customers through Bell's fibre network in Ontario and Quebec.

The court's decision was delivered Friday, a day after Bell Canada announced it was slashing 4,800 jobs and could further cut network spending based in part on the CRTC's direction.

It also came just ahead of the next phase of the federal telecommunications regulator's study of the same issue. The CRTC kicked off a five-day hearing on Monday as part of its review into internet competition in Canada.

The CRTC announced last November it would temporarily require large telephone companies, namely Bell and Telus Corp., to provide competitors with access to their fibre-to-the-home networks in Canada's two largest provinces within six months. (The rule doesn't apply to Canada's other major carrier, Rogers Communications Inc., which uses a cable network.)

But Bell asked the court for permission to appeal the CRTC's temporary ruling and for a stay of that decision pending the outcome of the court process, which would effectively delay independent companies from obtaining access to Bell's network to sell their internet services this May.

The court will hear the appeal, but dismissed the company's motion for a stay of the decision.

"I find that it has not established that it will suffer irreparable harm if the stay is not granted," Justice Mary Gleason wrote.

In a statement, Bell spokeswoman Jacqueline Michelis said that "while we are disappointed the court did not grant our stay request to stop the interim order, we think the court made the right decision to grant our request for leave to appeal."

"The CRTC’s interim decision to force Bell to provide access to its networks in Quebec and Ontario is already having a negative impact on the build out of our new fibre network," she said.

"The CRTC should prioritize continued network investment over network resale, or risk Canada falling behind in the digital economy."

Bell is also awaiting a decision from the federal cabinet, which it has asked to review the regulator's move.

The CRTC's decision last November was meant to stimulate competition for internet services, noting at the time its review could potentially make that direction permanent and apply it to other provinces.

Its hearing this week, which is set to hear from 22 groups, will focus on three main questions, CRTC chairwoman Vicky Eatrides said in her opening remarks. Those include how well internet services markets are working for Canadians currently, what changes are necessary to ensure a more competitive future, and how the CRTC can provide clarity so companies "can invest in and bring more high quality, innovative services to market."

"In recent years, we have seen declining competition between internet providers," Eatrides said.

"Many internet providers — independent providers — have been bought out by the large companies and those that are left have fewer subscribers than they once did. We also know that telecommunications networks are expensive to build, to maintain and to operate, so unless there is a prospect for returns, investors will put their money elsewhere."

Bell has accused the CRTC of "predetermined" outcomes related to its review, noting the commission's direction thus far reduces its incentive to continue building out its fibre network.

But the Competition Bureau argued Monday during its appearance at the CRTC hearing that effective wholesale fibre access can foster more competition for internet services.

The competition regulator recommended the CRTC update its wholesale access framework to provide independent carriers "access to an increasingly important network while also serving to reduce asymmetry between incumbent facilities-based competitors that can distort competition."

"Competition among internet providers is not only about price and service quality in the short-run, but also about building and improving internet networks in the long-run," said Competition Bureau deputy commissioner Krista McWhinnie.

John Lawford, executive director of the Public Interest Advocacy Centre, urged the regulator not to succumb to the "threats of investment withdrawal" by large carriers.

"The commission has a mandate to achieve the telecommunications policy objectives, not to return monopoly rent to incumbents," Lawford said.

"The incumbents are bullying the commission into using their overheated definition of 'investment' as a trump card that always wins. They must be told 'no.'"

This report by The Canadian Press was first published Feb. 12, 2024.

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