Rogers says wholesale rate hike justified, based on new technology

A Canadian Network Operators Consortium (CNOC) complaint about Rogers Communications Inc.’s proposed new wholesale Internet rates is “without merit” and should be denied “entirely,” Rogers said. This month, CNOC, a group of small Internet service providers (ISPs), complained to the CRTC that new tariffs Rogers proposed for its wholesale Internet access services broke commission rules that specify when incumbent cablecos can increase their 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, a move prohibited by a 2006 commission policy. In reply comments filed with the commission Friday, Rogers said its faster Internet speeds are “undeniably new services” that should not be tied to rates established for older, slower services. “CNOC submits that Rogers 25 Mbps, 36 Mbps and 45 Mbps retail speeds are not really new,” David Watt, Rogers’ vice-president of regulatory telecommunications, wrote in the company’s CRTC submission. “Rogers has not offered 35, 45 and 150 Mbps retail speeds before and they are undeniably new services.” The dispute follows Rogers’ Nov. 5 announcement that it was upgrading Internet speeds for its retail customers at no extra monthly cost. It said it was upgrading the speed for its “Ultimate’ package from 75 Mbps to 150 Mbps; from 32 Mbps to 45 Mbps for its “Extreme Plus” package; and from 28 Mbps to 35 Mbps for its “Extreme” package. The company said its “Express” package speeds would also increase from 18 Mbps to 25 Mbps. “Rogers proposes interim rates be established for those speeds that do not have a currently approved rate,” Rogers said in the reply. “The proposed interim rates are based on the rates for 25 and 50 Mbps services already approved by the Commission.” Rogers said the other new speeds it is offering to its retail customers differ from previous packages because they are not being offered to subscribers who use the company’s older, DOCSIS 2.0 modems. It said two-thirds of its customers still use the older modems and that those customers will not have access to the new bandwidth speeds. “With regard to the one-third of Rogers’ retail customers who do have DOCSIS 3.0 modems, these customers will be moved to the higher speeds over the next five weeks,” the company said. Rogers rejected CNOC’s complaint that the new service speeds will not be offered to wholesale customers that continue to use older infrastructure to connect to Rogers’ network. The company said it would require “unnecessary investments” to offer the new network speeds over the older infrastructure, which will be phased out next November. Rogers said the commission has warned small, third-party Internet providers that incumbents are not required to make new speeds available using the older infrastructure, which requires them to connect to Rogers’ network in several of locations. The new infrastructure allows small ISPs to connect to Rogers' network at one “aggregated point of interconnection” per province or region. The company's new 25, 35, 45 and 150 Mbps speeds are available to its wholesale customers that connect at the aggregated points, Rogers said. In an intervention filed with the commission last week, Teresa Murphy, co-founder of advocacy group the Canadian Gamers Organization, said Rogers’ proposed new wholesale rates will “force” the company’s wholesale customers to use the newer, aggregated interconnection infrastructure. She said this was unfair to wholesale customers, which had invested in the older technology, and to their retail customers “who must pay higher service fees.” BCE Inc. also filed an intervention in support of Rogers’ request to increase its wholesale prices. “As CNOC well knows, wholesale rates are not determined by a ‘retail minus’ pricing approach,” Bell said of the CNOC complaint. “Wholesale rates are cost-based rates and if there are higher costs associated with a higher speed, the it is appropriate that Internet service providers pay for those additional costs.” CNOC’s reply comments are due Nov. 23. news@thewirereport.ca

Rogers says wholesale rate hike justified, based on new technology

News | 11/20/2012 4:59 pm EST

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