TekSavvy asks Federal Court of Appeal to quash CRTC’s wholesale rates stay decision

The carrier says in its court filing that the CRTC's decision was 'unreasonable'

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TekSavvy is requesting the Federal Court of Appeal to quash the CRTC’s stay decision from last month regarding wholesale rates.

On September 28th, the commission approved the incumbents’ request to hold off on implementing the lowered whole rates that were introduced in August 2019.

The carrier is arguing that the CRTC’s stay decision is “so flawed and unreasonable that the Federal Court of Appeal should quash it.”

TekSavvy’s vice-president of regulatory and carrier affairs, Andy Kaplan-Myrth, states that 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.”

In its court filing, TekSavvy argues that the stay decision is contrary to the federal government’s policy directive to promote competition and consumer interests.

“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,” the carrier outlines.

The independent service provider also 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.

“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 company also argues that “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.”

For context, in August 2019, the CRTC lowered wholesale rates that larger carriers can charge internet service providers (ISPs) and also ordered them to make payments to compensate for the previously higher rates.

Rogers, Shaw Communications, Eastlink, Cogeco, and Vidéotron in a joint venture, and Bell independently, appealed the regulatory decision. The Federal Court then suspended the wholesale rates decision until final judgement.

On September 10th 2020, the Federal Court of Appeal dismissed the incumbents’ appeals. The incumbents had argued that the CRTC erred in law or jurisdiction, but the court ruled that it did not find evidence for this claim. By denying the appeals, the court removed the stay.

However, the CRTC granted the incumbents’ stay request last month and held off on implementing the lowered whole rates until it completes the process of the review and vary applications filed by the carriers, which is one of the three avenues that the incumbents took to appeal the rates.