An Internet company based in Nueva Scotia says that it cannot compete against the three great Internet suppliers in Canada: Tell, Bell and Rogers, in the current regulatory configuration and may have to stop serving some small rural markets and lost for money.
Lee Bragg, the executive vice president of Eastlink, issued a statement earlier this month that expressed its disappointment with Ottawa’s decision to defend a CRTC decision on the wholesale access to the Internet that allows the largest telecommunications companies in the country to provide service to customers who use the fiber networks of smaller regional suppliers.
The Federal Communications Regulator says that its policy will encourage greater competition in the telecommunications sector.
Bragg does not agree.
“Téus enters with more retail presence than me,” he said in an interview.
“The ability to group my high -speed internet that is buying me below the cost with their cell phone, with their marketing dollars, as if they will push us out of the market and all that I have left is the operational responsibility to execute the network and can collect all the income and we only say that this is not fair.”
‘He ran out of option’
Bell had argued against politics, saying that he discourages the main suppliers to invest in their own infrastructure, while some independent operators expressed concerns that it would make it difficult for them to compete against the largest players.
Téus had defended it as a way to boost competition in the regions where it does not have its own network infrastructure, which improves affordability for customers.
After the decision of the federal government, Bragg instructed the company’s officials to begin evaluating their operations “to identify communities that are not profitable and, therefore, require the closure as a result of this decision.”
He said that the company continues its evaluations, but a “significant number” of rural communities could be affected given the presence of the company not only in the Atlantic of Canada but also in the rural parts of Ontario, Alberta and Columbia Britanic.
“You know, we are not happy with that, but we have no more options,” said Bragg.
He said that CRTC’s policy is to suffocate competition instead of stimulating it.
“It drives me that we are prohibited now, economically, to try to grow our business and to the point that, if third parties like Télus obtain a significant number of customers in these communities, it is better from an economic point of view so that we can close the network than to operate it with losses, basically to benefit the titles of Telus.”
Geoff White of the Public Interest Defense Center says that Bragg has a point.
“And Eastlink is not just about being worried about the way CRTC will honor a federal government direction to promote, cite, increase, competition,” White said.
He said that the government has been sending mixed messages about how it wants to increase competition and improve services for consumers. He said it is part of a broader problem in Canada in which specific industries, including telecommunications, lack sufficient competition.
“And what we are seeing are ineffective or diluted policies that are claimed that they are of public interest and consumer interest, but tend to dilute through political litigation or interference.”
Tec actively campaign
Bragg said that smaller Internet suppliers called City Wide and Purple Cow, which operate in the Halifax area, could take up to 25 percent of their customers using their access to their network. He said that Télus, with his retail stores and his presence much greater, could take even more.
“They could set the price of maritime below the cost and absorb it in its large base in the west,” he said.
“The opposite is not true, I cannot sell with a loss in Edmonton and absorb it with the profits I get in Halifax.”
For its part, Téus is actively campaigning to keep the status quo. The company says it has more than 400,000 signatures in a request that it is sponsoring to press Ottawa to leave the current regulatory regime in its place. Téus also says that his foray into Quebec and Ontario markets has led to a reduction of more than 13 percent in Internet prices.
White said this problem is far from finishing.
“There will be more litigation about this and I will look for our high prices for the Internet at home, our high prices or high volumes of complaints, if that will change or not with this recent CTC decision that the great players have the right to share the networks of others.”
