ISPs ring Ma Bell

You'd think someone in the wholesale services business at Bell Canada would have cracked the spine of Dale Carnegie's book How to Win Friends and Influence People at some point in the telco's long history. But, apparently no one has.

Time and time again, Bell seems more bent on making enemies than friends with the Internet service providers that buy wholesale access to its telephone lines.

In the latest case, Bell is charging ISPs -- including its own Sympatico service -- $160 or more a month for Asymmetric Digital Subscriber Line (ADSL) access, while letting Sympatico sell the service to its customers for $39.95 per month, a price other ISPs simply can't match.

ISPs say this amounts to anti-competitive behaviour, claiming Bell is trying to drive them out of business by leveraging its virtual monopoly on local access in Ontario and Quebec to subsidize Sympatico's money-losing ADSL service.

Back in March 1998, Bell had ISPs up in arms when it started giving free Internet access to its business long-distance customers, another subsidized scheme which ISPs also claimed was anti-competitive and designed to put them out of business.

With regard to the ADSL service, Bell's defence is that ADSL is still a costly technology to provide and Sympatico will be forced to take a loss until customers are willing to pay the full price for the service.

The problem with this argument is that western Canadian telcos BCTel and Telus sell their wholesale ADSL services to ISPs at a much lower rate in British Columbia and Alberta than Bell does in Ontario and Quebec -- to the tune of about 75 per cent less. This still leaves plenty of room for western ISPs to make a profit without charging consumers an exorbitant amount for ADSL service.

The Canadian Association of Internet Providers (CAIP) has submitted its complaint to the CRTC, but it will probably be late spring before a decision is made.

In the meantime, ADSL adoption will continue to be stalled -- at least in central Canada -- as long as Bell and Sympatico are allowed to carry on with their predatory pricing strategies.

One positive element of all of this is that soon ISPs in Ontario and Quebec may have other options than leasing local loops direct from Bell. The CRTC is currently considering a scheme that would allow ISPs to lease central office space from telcos and install their own ADSL equipment, for example.

And the expansion of the local access market as a result of deregulation should also mean more central office or line leasing alternatives.

Maybe then Bell will understand the true meaning of competitive pricing.