Small ISPs file complaint over Rogers pricing for faster wholesale Internet

The CRTC is expediting a complaint from the Canadian Network Operators Consortium (CNOC) that said Rogers Communications Inc. broke commission rules by raising the price for faster wholesale Internet services without a corresponding price hike for its retail customers. In a complaint filed with the commission Nov. 8, CNOC, a group of small Internet service providers (ISPs), said the new tariff Rogers proposed for its wholesale Internet access rates breaks rules established in a 2006 commission decision, No. 2006-77, which laid out when incumbent cablecos can increase their “third-party Internet access” rates for small providers that lease wholesale access to the incumbents' networks. The complaint said Rogers proposed to increase its Internet service speeds for wholesale and retail Internet customers, and that the company raised its pricing for the higher speeds on the wholesale side but not for its own retail customers. CNOC said Rogers' wholesale rate hikes, reflecting its higher speeds, “violate one of the speed-matching principles” the commission adopted in the 2006 decision. That decision said incumbents that “introduce a speed upgrade to one of its retail Internet service offerings with no corresponding price change” should make the same speed upgrades available to wholesale customers “at the same time” and “with no corresponding price change.” Permitting Rogers to increase its wholesale Internet prices without a corresponding change in retail prices “raises immediate and serious issues of competitive equity” and “places competitors at an undue disadvantage,” CNOC said in the complaint. “Speed is the most essential attribute for Internet access services and is absolutely essential to the marketing efforts of all ISPs.” The commission established wholesale Internet rates for Rogers and other incumbent providers last year in a decision to set up a new capacity-based billing regime for small ISPs. Small or independent ISPs, such as CNOC members Distributel Communications Inc., Primus Telecommunications Inc., and Teksavvy Solutions Inc., purchase wholesale Internet from incumbents like Rogers and compete with them for retail customers. According to the CNOC complaint, Rogers proposed monthly wholesale charges under the higher speeds of $21 per end user for speeds of up to 25 Mbps, $21.68 for up to 35 Mbps, and $22.35 for up to 45 Mbps speeds. Rogers' previously approved wholesale rates under lower speeds, according to CRTC decision 2011-703, are $14.25 per month per retail subscriber that receives a service of up to 10 Mbps, $19.06 for up to 15 Mbps, and $21 per end user receiving up to 25 Mbps. Those speeds match Rogers’ previous retail speeds in packages called “Express,” “Extreme” and “Extreme Plus.” Rogers' new retail speeds, announced last week, raise its Express package to up to 25 Mbps, the Extreme package to up to 35 Mbps, and Extreme Plus to up to 45 Mbps. In Rogers' announcement last week, the company did not say whether the changes would affect its retail Internet pricing. In a telephone interview, Chris Tacit, CNOC’s lawyer, said the complaint is about pricing for wholesale and retail as well as when Rogers’ higher Internet speeds will be available to wholesale customers. Tacit said Rogers offered to make the higher speeds available for wholesale customers, under the higher rates, on Dec. 7, one month after they were available for many retail customers. “The way the speed-matching principle is supposed to apply is that it applies simultaneously for retail and wholesale,” he said. In an emailed statement to The Wire Report, Carly Suppa-Clark, a spokeswoman for Rogers, said the CRTC approved some of the company's higher-speed broadband Internet services based on a cost study last year. "The other rates we have proposed are prorated and are on an interim basis. We will file another cost study once the CRTC rules on other various applications that have been filed to vary carriers’ cost studies," she said, referring to new wholesale rates that are being reviewed by the commission. "he CRTC has always based wholesale rates on filed cost studies where cost studies have been approved. The CRTC has only used retail rates or discounts off retail rates to set wholesale prices when costs studies have not been available and approved. In this instance, Rogers has a CRTC-approved cost study," Suppa-Clark said. Tacit said the commission, which was closed Monday for Remembrance Day, agreed to expedite the complaint. Comments on the complaint can be filed by Nov. 16 with reply comments due Nov. 23, he said. The CNOC complaint also said Rogers proposed that its new wholesale speeds and rates will be available only to ISPs that use “aggregated points of interconnection,” which could prevent some small ISPs from offering the higher-speed services through access to Rogers’ network. Rogers was not immediately available for comment Monday. news@thewirereport.ca

Small ISPs file complaint over Rogers pricing for faster wholesale Internet

News | 11/12/2012 9:40 pm EST

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