CyberSurf battles ILECs over ADSL service parity

CyberSurf Corp. wants the CRTC to stop incumbent telcos from continuing to offer their retail Internet service at faster speeds than wholesalers.The Calgary-based ISP is challenging telcos over the issue of service parity, which would ensure that all consumers receive the same Internet speeds, regardless if they buy the service from a telco or a wholesaler.However, the ILECs say they aren't required to offer wholesale ADSL services to competitors that are exactly the same as the services they offer to their retail customers. CyberSurf disagrees, saying it runs counter to the March 2008 essential services decision (Telecom Decision 2008-17), the policy direction and certain sections of the Telecommunications Act.CyberSurf argues that it's a competitive disadvantage unless it can offer a comparable service to its retail customers. Last month, it filed a Part VII application with the CRTC asking it to intervene and mandate service parity for a certain class of wholesale ADSL services."It requires an enormous rationalization for the commission to determine there are sufficient barriers to entry and cost constraints to create a functionally equivalent network to compete with ILEC ADSL, so as to mandate access to that network; but then to permit competition on terms the ILEC can dictate by withholding premium services to competitors, thereby essentially ensuring limited competition," CyberSurf writes in its appeal.The matter isn't a simple one to explain and involves multiple CRTC decisions regarding a certain class of wholesale ADSL services. In January 2007, the commission issued a series of orders requiring the ILECs to offer service parity for both wholesale and retail services for ADSL. Called Gateway Access Service (GAS), many independent ISPs rely on this wholesale service to provide their retail services. After the ILECs launched appeals of the January 2007 orders, the commission determined in Telecom Decision 2007-77 that it would be better to deal with this issue in the essential services proceeding that was underway at the time.In its decision from that proceeding, the commission made changes to the wholesale services framework, but chose not to revisit wholesale ADSL services. The CRTC left the scope of the mandated services and their pricing principles alone, which according to the ILECs, allows them to offer ADSL services at the retail level at different speeds than those offered to wholesale customers."Granting Cybersurf's request that ILECs file wholesale tariffs for any retail ADSL service that is not already offered on a wholesale basis would represent an ill-advised departure from the commission's approach to next generation access (NGA) services in the essential facilities decision," Bell et al. wrote in response to CyberSurf's Part VII."It would signal to competitors that they may automatically, and immediately, gain access to whatever an incumbent develops, even if it is non-essential, rather than develop it themselves. This is anathema to the policy direction's clear drive for innovation, investment and reliance on market forces and runs contrary to Canada's competitiveness and innovation agenda."

CyberSurf battles ILECs over ADSL service parity

News | July 28, 2008

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