Independent ISPs accuse large players of shutting off access to Internet “lite”

The continuing battle between small Internet service providers and larger ISPs is moving on to a new arena, as a complaint has been made about Internet "lite" services offered by telcos and cablecos. A subsection of the chief lobby group for ISPs has filed a Part VII application with the CRTC seeking access to the new product. The Independent Members of the Canadian Association of Internet Providers (IMCAIP) submitted its filing on November 12. The broad-based broadband beef is targeted against the four major cablecos, the major ILECs "and any other incumbent cable and telephone carriers providing or offering retail high-speed or high-speed ‘lite’ Internet services on an anti-competitive basis." (While CAIP represents various ISPs, including Bell Canada and Telus Corp., IMCAIP is a subsection of the group concentrating on issues affecting smaller, unaffiliated firms. CAIP acknowledges in its mission statement that it occasionally finds itself conflicted between members’ interests.)The lite Internet service (IS) is the newest wrinkle in the market (NL, Nov. 4/02). It allows speeds faster than dial-up but not quite as strong as regular DSL or cable modem speeds. After looking at the move cautiously in the winter (NL, Feb. 11/02), the mainstream Internet providers stampeded into the marketplace this spring. IMCAIP accuses the largest cablecos – Rogers Communications Inc., Shaw Communications Inc., Vidéotron ltée, and Cogeco Cable Inc. – of offering lite services at prices only slightly higher than the tariff rates established by the commission. It charges that the telcos – Bell, Telus, Manitoba Telecom Services Inc., SaskTel, and Aliant Telecom Inc. – are selling the lite product at rates below the tariff. IMCAIP further alleges that Aliant doesn’t even provide third-party access to its network. "We have been unable to find a DSL wholesale tariff from them and it’s our understanding they don’t have one," CAIP president Jay Thomson tells Network Letter. "So we’re asking for them to file one." A representative of the country’s largest ILEC questions the assertion that the established players are trying to drive out the smaller ones. Andrew Cole, a corporate communications spokesman for Bell, says his company has been in the vanguard of offering access. "We’ve been one of the most responsive and accommodating telcos in North America to open up our networks to facilitate competition in the ISP market," he explains to Network Letter. "I don’t know if the same can be said for the cable folks." The VP communications at Canada’s largest cableco denies they are to blame for this mess. Taanta Gupta of Rogers Cable points out the commission is responsible for setting the rates for access. "There are tariffs that the CRTC has established," she states. "What I believe, if I have read this correctly, is that they are now asking for tariffs for the lite product, which was only introduced in April." Thomson believes that the cablecos and telcos want to shut out the independents, thus limiting competition. "Given the razor thin differences between the incumbent’s regular high-speed access services and their retail lite IS, this is tantamount to a refusal to provide the independents with the high-speed access service required to provide competitive lite IS," the Part VII application states. "Moreover, the incumbent carriers have refused to make available lite IS to independent ISPs on a resale basis. To date, requests by IMCAIP members to Bell Canada and its un-regulated affiliate, Bell Nexxia, to resell Bell’s lite ISs and to certain incumbent cable carriers have been refused." Cole disputes that. Bell has more than 100 wholesale customers who purchase DSL services from the telco and resell them. Those companies have the capacity to modify speeds to deliver lite services. "The technological capabilities are certainly there," he offers. "It’s just a matter of them making the adjustments and the corresponding pricing adjustments to reflect the value of the service." The Part VII filing is just the first of a two-pronged attack. IMCAIP is also planning to lobby members of Parliament on the matter. "We want to make MPs aware of the dangers that Canadians face if we don’t have a competitive Internet service industry," Thomson states, "and the fact that their constituents could be very well stuck with high prices and poor service and control over their Internet content by a few big players, if we don’t do something to address this issue soon."At this point, it would be an education campaign. We’re not seeking any specific legislation but we certainly need them to be aware of what their constituents could be facing." All of this has a familiar sound to Rogers’ Gupta. She also wonders why it has taken IMCAIP so long to get involved. "This has been in place in the marketplace since April, so the association involved has taken some time to write," she says. "Secondly, this is not dissimilar from other complaints they have had in the past about the high-speed product." She could not provide up-to-date numbers of the ISPs that do use the Rogers network for third-party access. Gupta did point to the recent signing of a deal between the cableco and Calgary’s Cybersurf Corp., apparently unaware that Cybersurf president Paul Mercia swore an affidavit supporting IMCAIP. The statement is not publicly available, as it was included as an attachment of the highly-redacted Part VII application. IMCAIP offers dire warnings about the consequences of ignoring the plight of its members. "If the incumbent carriers are permitted to continue to anti-competitively price their lite and other high-speed ISs relative to their access services, thereby effectively denying independent ISPs the ability to enter the high-speed market, while cannibalizing the independent ISPs’ dial-up customers, then competitive independent ISPs will soon be eliminated from the Canadian retail IS market," the submission claims. "The result will be a market duopoly comprised of the incumbent cable and telephone carriers. Canadian consumers will be the losers." Gupta perhaps bolsters that argument when she states, "Our biggest competitor is really the telephone company and we think that in a marketplace that really ought to reward innovation and new options for customers, that ought to be the focus."

Independent ISPs accuse large players of shutting off access to Internet “lite”

News | 11/19/2002 5:00 am EST

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