CHATHAM, Ont. — Major telecom companies in Canada are allegedly giving preferential access to their networks in violation of the rules, TekSavvy Solutions Inc. said Thursday as it asked the federal telecommunications regulator to investigate.
The internet provider said the issue has taken on new prominence because discounted access to broadband networks is part of Rogers Communications Inc.’s proposed purchase of Shaw Communications Inc., which includes selling Shaw’s Freedom Mobile wireless business to Videotron.
The arrangement, as detailed in December hearings before the Competition Tribunal, includes favourable rates for Videotron to access Rogers’ internet infrastructure, which the Tribunal says will help make it a more viable telecom competitor as it expands further outside of Quebec.
TekSavvy noted that the Competition Tribunal cited the preferential rates in its reasoning for allowing the Rogers-Shaw deal to go ahead.
TekSavvy, however, alleges that the offering of such discounts violates the Telecommunications Act which states that no carrier can give unreasonable preference on rates. Rogers is only offering discounted the rate so that it can push its takeover of Shaw through, TekSavvy alleges.
“This transaction is designed so the dominant carriers can weaponize the [internet service providers] they acquired, using below-tariff rates to eliminate us from the market,” said Andy-Kaplan Myrth, TekSavvy’s vice-president of regulatory and carrier affairs, in a statement.
TekSavvy said Bell Canada is also offering preferential rates to EBOX, an internet provider acquired by Bell, which is also not allowed because the rules on discounted rates also extend to affiliates of companies.
Chatham, Ont.-based TekSavvy is asking the Canadian Radio-television and Telecommunications Commission (CRTC) to investigate the matter and make a decision before the federal government makes a final decision on the Rogers-Shaw merger.
It’s also asking in the meantime for the CRTC to implement the lower wholesale rates that were set out in 2019 and overturned by Industry Minister François-Philippe Champagne last year.
Rogers and Videotron did not immediately provide a response. Bell said it would review the application when it receives it.
The Competition Tribunal dismissed an attempt by the Competition Bureau to block the Rogers-Shaw deal late last year in a decision that said the sale of Freedom to Videotron was adequate to ensure competition isn’t substantially reduced.
The Competition Bureau is appealing the decision.
This report by The Canadian Press was first published Jan. 19, 2023.
Companies in this story: (TSX:RCI.B, TSX:SJR.B, TSX:QBR.B, TSX:BCE)
