CAIP demands definitive decision from CRTC on high-speed Internet resale

The Canadian Association of Internet Providers (CAIP) has cut off negotiations with cablecos over the contentious issue of third-party access, and will be calling on the CRTC this week to settle the three-year-old dispute. CAIP president Jay Thomson told Network Letter that he will be sending a letter to the commission within the next day or two after ongoing mediation between the groups failed to reach a settlement that would enable its members to begin offering cable modem service. CAIP has been fighting for access to cable networks since early 1997. It appeared to be winning the battle last September when the CRTC ordered cablecos to begin reselling their Internet service to ISPs at a discount of 25 per cent from the lowest rate the cable firms charge their Internet subsidiaries. The December 13 deadline came and went and still no access agreements have been reached. Cable operators claim there are still technical and costing hurdles to overcome before third party access can be provided.CAIP disputes the claim and has fired off several letters to the CRTC demanding an expedited resolution to the impasse (NL, December 20/99). Its most recent complaints against Canada's largest cable operators - including Vidéotron Communications Inc — are detailed in two separate letters filed April 4 with the commission. The terms, conditions and rates for access as proposed by the cable industry are among CAIP's biggest concerns. One of the more heated disputes pits CAIP against Vidéotron. The dispute arose when Vidéotron admitted to PSINet Ltd that it sells its Internet service to non-cable customers for $39.95 and charges cable users $29.95. Vidéotron offered to sell its Internet service to PSINet based on the $39.95 rate. It later made the same offer to Quebec ISPs Abacom of Sherbrooke, Clic.Net of Montreal and Quebec City and Interjonction of Montreal. On March 3 the cableco announced its rate schedule for Internet clients. A cable subscriber with no Internet service term commitment pays $39.95 while a subscriber accepting a term of either six or 12 months pays $29.95. Non-cable subscribers without a term commitment are charged $49.95 while a six- or 12-month deal sets a non-cable subscriber back $39.95. According to CAIP's April 4 letter to the CRTC, Vidéotron continued to offer the ISPs a rate of $29.95. "Vidéotron's repeated and ongoing refusals to respect the clear requirements of Decision 99-11 demonstrate contempt for the Commission's decision and are seriously harming the public interest in fostering a competitive high speed IS market...," Thomson writes. In its letter, CAIP also called on the CRTC to mediate a resolution to the dispute. But, according to Thomson, the tone of Vidéotron's response made it clear "mediation no longer appears appropriate". He is now drafting another letter, asking the commission for a definitive ruling on access. Vidéotron, in its reply, claims that $39.95 is the lowest rate, despite the rebates offered to those who agree to a defined term of service. "If a Vidéotron end-user does not honour that commitment, he or she is assessed a penalty equal to the difference between the total amount actually paid from the beginning of the term up to the time of breach and the total amount that would have been paid had the end-user been charged under a monthly contract," director of regulatory affairs Frans Luc Vandendries writes. The cableco says it is "unequivocally" obeying the CRTC orders and claims CAIP misunderstands the commission's rulings on third-party access. CAIP takes aim at access tariffs CAIP has also sent the CRTC its comments on Third Party Internet Access Service (TPIA) tariffs. The association worries that the cablecos' proposed tariffs are discriminatory and could undermine the objective of competition. "In many cases, even the confidential information in this proceeding provides little detail justifying the proposed rates and costs," Thomson writes to the CRTC. "For example, while there are some exceptions, often the detail of an expense is limited to identification of the number of hours of work and the labour rate per hour." The April 4 letter also criticizes cablecos for trying to describe their capital risk in isolation. CAIP reminds the CRTC the commission has never permitted telcos to do so, choosing to use the current cost of debt and of equity for each company in its entirety. The association further attacks the firms for their mark-up costs. "It appears clear that the cable companies' mark-up for services and functionalities associated with TPIA service is well in excess of 25 per cent of costs," CAIP writes.

CAIP demands definitive decision from CRTC on high-speed Internet resale

News | 05/09/2000 4:00 am EDT

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