CRTC local loop decision good for competition, small ISPs: MTS

The CRTC lowered the rates BCE Inc. can charge small competing telcos for use of its “local loop” lines that connect to consumers' homes. In decision 2012-628 issued Thursday, the commission said there is “substantial doubt as to the correctness” of the local loop rates it established in a decision last year, and directed BCE subsidiaries Bell Aliant and Bell Canada to use new, lower rates, effective retroactively to Dec. 14, 2009. An unbundled local loop is a wireline service that large, incumbent telcos provide to smaller competing telcos and Internet service providers (ISPs), allowing them to lease the lines that lead to customers’ homes. Following the original rate decision, in January 2011, Manitoba provider MTS Allstream Inc. said the rate increase would cost Bell's small competitors millions of dollars in a one-time write-down, plus higher rates going forward. Primus Telecommunications Canada Inc., in early 2011, filed an application with the CRTC requesting a review of the decision, and said Bell’s rate increases ranged from 25 per cent to 156 per cent of the existing monthly charges for access to the company's local loops. The company told The Wire Report last year that the rate increase would cause the company to contact its retail customers and, to make up for the discrepancy, apply monthly bill charges retroactively as far back as 13 months. At that time, Bell also asked the CRTC to review the costs upon which it approved the original rates, arguing that prices for using local loops had not changed since 2001 despite rising costs. In the decision Thursday, the CRTC said it erred in establishing Bell's local loop rates, which were based on maintenance, replacement, removal and other fulfillment costs. Teresa Griffin-Muir, vice-president of regulatory affairs at MTS Allstream, said in a phone interview Thursday that MTS is “very happy” with the decision because it shows support for competition and the CRTC's wholesale regime, which permits smaller, competing ISPs to rent access to the incumbents' networks. “If they drive up wholesale costs, that really means we have to drive up prices to our customers, and all competitors would have to do likewise,” Griffin-Muir said. “And really, that would have a negative effect on consumers.” She said the new rates approved by the CRTC are lower than those approved last year. “It sends the message that if you’re going to try to artificially inflate your costs, the commission will examine that and will react to that,” she said. Bell spokeswoman Jacqueline Michelis said in an emailed statement Thursday that the company was “assessing the decision” and did not provide further comment. dgrenier@thewirereport.ca

CRTC local loop decision good for competition, small ISPs: MTS

News | November 15, 2012

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CRTC local loop decision good for competition, small ISPs: MTS

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