Federal court grants temporary stay regarding CRTC ruling, extension could hurt ISPs

CRTC logo on wall

If the Federal Court of Appeal agrees to hear an appeal by cable companies, it could decide to extend a temporary stay decision to cable companies for the entirety of a CRTC hearing on wholesale rates. This would affect smaller internet service providers, a telecom lawyer indicated.

The court has granted a temporary stay to Canada’s largest cable companies with respect to the Canadian Radio-television and Telecommunications Commission’s (CRTC) decision on wholesale internet final rates.

The decision essentially suspends the CRTC’s final rates for the initial part of the proceeding until the Federal Court of appeal decides whether to hear the appeal made by Rogers, Shaw, Quebecor’s Vidéotron, Cogeco and Bragg Communications, which owns Eastlink.

Until then the companies won’t have to follow the final rates for what internet service providers can charge smaller companies for network access. They also won’t be required to pay over $225 million CAD to third-party ISPs in retroactive payments.

Justice Yves de Montigny said that that CRTC order “could result in a permanent market distortion which could be extremely difficult to remedy afterwards,” The Globe and Mail reported.

“I am of the view that the balance of convenience favours the status quo until the applicants’ motion for leave to appeal and for an interlocutory stay is determined.”

An extension would hurt ISPs that have granted retail price reductions

Tamir Israel, a telecom and technology lawyer, said via Twitter direct message (@tamir_i) that if the court does agree to hear the appeal it “might rely on the same rationale to extend the order for the entirety of the proceeding.”

“[This] would be unfortunate for internet customers and for those wholesale companies who have already announced retail rate reductions,” Israel said

It would affect companies like Distributel and TekSavvy that have made changes to their services.

Distributel has started to increase home internet speeds “for the majority of its customers at no extra cost,” and is going to launch “competitive new retail pricing for bundled and stand-alone products and services.”

Independent internet service provider TekSavvy announced as well that over 85 percent of its customers are going to receive bill discounts and upgrades because of the decision.

The company was also going to work with rural communities “by working to ensure more Canadians have equal access to the many benefits of high-speed internet.”

On September 13th, the five large cable companies filed a motion with the Federal Court to seek an appeal of the CRTC decision that was made on August 15th.

The cable companies argue that the CRTC made several errors of law and exceeded its jurisdiction.

“If allowed to stand, [the ruling] will create significant and irreversible market distortions while serving as a powerful disincentive to innovation and investment by the cable carriers. Ultimately, Canadian consumers will suffer the consequences,” the filing seeking to appeal said.