Vidéotron move forces competitors to cease signing up new customers in MUDs

Vidéotron ltée competitors in Quebec say they have been forced to cease efforts to acquire customers in multiple-unit dwellings (MUDs) in the province because of hefty fees for the use of inside wiring. Vidéotron’s sister company Câblage QMI Inc. (CQMI) is attempting to charge $5 per subscriber per month – an amount significantly higher than the 44 cents proposed by the CRTC in an ongoing process to set rates for third-party use of inside wiring. Even if they were willing to pay the $5 fee, CQMI has no process in place to hook up service to a competitor of Vidéotron, says Paul Armstrong, director of regulatory and government affairs at Bell ExpressVu LP. "A key aspect of the handling of inside wire is a simple process that would be followed when it’s going to be flipped from one supplier to the other," he tells CCR. "CQMI…is charged with handling this inside wiring, but there doesn’t appear to be any process for handling our requests. It doesn’t even appear that it’s been discussed between Vidéotron and CQMI…It’s an outrage."ExpressVu, Cable VDN Inc., and Look Communications Inc. have filed complaints with the CRTC over the practice. "We are being held hostage in Quebec," says Gary Sherman, who’s in charge of legal and regulatory affairs at Cable VDN. "We have been forced to stop marketing efforts for new customers." He further notes that while there have been longstanding disagreements between cable companies and their competitors over wiring, Vidéotron’s moves are unprecedented in Canada. Armstrong concurs: "Consumers are being withheld from exercising their ability for end-user choice, which is a fundamental principle of the commission. End-user choice (in apartment buildings) has basically been suspended in the province of Quebec until the matter is resolved." Vidéotron recently sold its cable wiring in buildings with more than 20 residential units to CQMI, which claims to be exempt from CRTC regulations. CQMI then unilaterally sent out letters to broadcast distribution undertakings (BDUs) in the province, stating that they would henceforth be charging a $5 monthly fee and a $35 hook-up fee for new subscribers. Luc Lavoie, spokesperson for Vidéotron parent Quebecor Inc., maintains that CQMI is a separate company that doesn’t fall under CRTC authority. "Any company that wants to pay the $5 can have access to the wires," he notes, adding that Vidéotron is currently paying those fees to CQMI. Neither Bell ExpressVu nor Cable VDN would say whether they were actually paying that fee for existing customers. "We have received one bill so far," Armstrong says. "Put it this way…we still don’t recognize the validity of the transaction so we’re currently strategizing. (In our complaint) basically we’re trying to show that the whole transaction was premised on trying to get out of the commission’s regulation in terms of the rate for inside wiring." The CRTC in a February letter asked Vidéotron to continue to operate in a manner consistent with section 10 of the Broadcasting Distribution Regulations until the matter could be sorted out. In response, Vidéotron responded that it was no longer responsible for the wiring and simply had a "contractual arrangement" with CQMI. CQMI continues to contend that it doesn’t fall under CRTC jurisdiction.After further prodding by the CRTC, Vidéotron admitted that both companies were owned by Quebecor. "The two companies have the same address and fax numbers," notes Armstrong. Given the questionable nature of Vidéotron’s moves, the CRTC on March 19 set a public hearing for April 23 to consider the matter – Broadcasting Notice of Public Hearing 2002-3. The commission stated that at the public hearing it would consider the rare move of issuing a mandatory order. Such an order could require Vidéotron and CQMI to comply with sections 9 and 10 of the broadcasting regulations. Section 9 requires a licensee not to give undue preference to any person, including itself, or subject any person to an undue disadvantage. Section 10 imposes certain obligations on a wire owner to permit the inside wire to be used by a subscriber and other BDU licensees. While most observers agree the CRTC moved swiftly on the complaints, Armstrong notes that Bell ExpressVu is stalled in the multi-unit dwelling market in Quebec. "(The commission) thinks it is operating at lightning speed, but from a business and consumer standpoint, I would say that they’re operating as fast as they possibly can but not as fast as we would have liked," he says. "I fully appreciate that due process is required, but we are now being frozen out of any growth in the province of Quebec in apartment buildings." The DTH company further points out that 2,640 of its 4,109 subscribers in MUDs in Quebec were in buildings of more than 20 units at February 7. These customers could eventually be affected by Vidéotron’s actions. ExpressVu claims that Vidéotron has continued to process its disconnect requests, ceasing service to the customers in question, but preventing access by ExpressVu to the end of the inside wire that terminates inside a locked Vidéotron panel box. ExpressVu has told the CRTC that as of February 20, 64 new ExpressVu customers had been affected. The CRTC is working to determine fair rates for the use of inside wiring. It has started a separate process to examine what would be an appropriate rate – Broadcasting Public Notice 2002-13. Comments were originally due by April 8, with reply comments to be submitted by April 22 (CCR, March 15/02). But the Canadian Cable Television Association (CCTA) asked that the deadlines be extended to April 28 and May 8 respectively. That request was granted on March 28.

Vidéotron move forces competitors to cease signing up new customers in MUDs

Broadcast | March 28, 2002

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