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TekSavvy asks Court to quash CRTC’s stay of 2019 wholesale Internet rates order

ISP says CRTC’s decision is unreasonable and contrary to federal government’s directive to promote competition and consumer interests.

October 29, 2020. Chatham, Ontario. TekSavvy Solutions Inc. (“TekSavvy”), Canada’s largest independent Internet service provider, has asked the Federal Court of Appeal to quash a CRTC decision dated September 28, 2020 (the “Stay Decision”), in which the federal telecom regulator granted Bell Canada’s request to stay the implementation of the CRTC’s August 2019 order setting final rates for wholesale Internet services (the “Final Rates Order”). TekSavvy’s application for judicial review is available here.

On August 15, 2019, the CRTC released the Final Rates Order, following an extensive four-year proceeding which determined that the “interim” wholesale rates the large carriers have charged independent ISPs like TekSavvy since 2016 are not “just and reasonable”, as is required by the Telecommunications Act. The Final Rates Order established new, just and reasonable final rates, retroactive to March 31, 2016, and required the large carriers to repay independent ISPs for past overcharges and to charge the new rates going forward.

However, on September 28, 2020, the CRTC released the Stay Decision, which approved Bell’s request to stay both the retroactive and future effects of the Final Rates Order until such time that the CRTC decides Bell’s request to raise those rates.

In a court filing dated October 28, 2020, TekSavvy argues that the CRTC’s Stay Decision is so flawed and unreasonable that the Federal Court of Appeal should quash it. TekSavvy argues that the CRTC’s Stay Decision is unreasonable in four key respects:

• The CRTC based its Stay Decision upon a finding of irreparable harm only with respect to retroactive harm asserted by Bell, yet the CRTC applied a stay preventing the implementation of the entire Final Rates Order, including the new just and reasonable final rates, going forward. TekSavvy argues that it was unreasonable for the CRTC to apply a blanket stay, including to the new rates going forward when the CRTC failed to find that any irreparable harm existed going forward.

• The CRTC made its finding of retroactive harm only with respect to harm asserted by Bell, regarding potentially unrecoverable refunds from a handful of unnamed competitors. TekSavvy argues that it was unreasonable for the CRTC to apply the stay to all competitors, including TekSavvy, where the risk of unrecoverable refunds was not substantiated, since TekSavvy is fully solvent and can repay any outstanding amounts in the event the CRTC adjusts the Final Rates Order in the future.

• The CRTC’s finding of retroactive harm to Bell was unjustified by the evidence before it, which consisted of one affidavit containing bald assertions by the head of Bell’s wholesale department, and failed to even quantify or estimate the harm asserted by Bell.

• It was unreasonable for the CRTC to find that Bell’s unsubstantiated assertions of unquantified harm from potentially unrecoverable refunds to a handful of unnamed competitors, outweighed the public interest and the interests of competitors like TekSavvy. This is particularly so, given that the Stay Decision permits large carriers to continue charging “interim” rates that are “not just and reasonable” and to retain hundreds of millions of dollars in overpayments collected from competitors over the nearly half-decade that the CRTC has permitted them to charge rates that are not just and reasonable.

TekSavvy’s filing further notes that the Stay Decision is contrary to the Government of Canada’s policy directions, and that the Final Rates Order was recently upheld by unanimous decision of the Federal Court of Appeal, which dismissed the large carriers’ appeal with costs, finding that many of the issues raised by Bell and the Cable Carriers in their appeal were of “dubious merit”.

“The stay decision is unreasonable and directly contradicts the federal government's direction to the CRTC to promote competition, affordability, consumer interests, and innovation”, says Andy Kaplan-Myrth, VP of Regulatory and Carrier Affairs for TekSavvy. “The CRTC’s failure to implement the just and reasonable final wholesale rates it set in 2019 only serve to weaken competition and keep prices high for consumers.”

About TekSavvy

TekSavvy has been proudly serving Canadians with reliable telecom services for more than 20 years and has won numerous awards for the quality of its service and for its commitment to fighting for consumers’ rights online. With offices in Chatham, Ontario and Gatineau, Quebec TekSavvy is Canada’s largest independent telecom service company with over 300,000 customers from coast to coast.

For more information contact:

Trevor Campbell,
The iPR Group

John Settino,
The iPR Group


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