AT&T Canada appeals CRTC price-cap ruling

AT&T Canada has forecast dire outcomes for upstart telcos if the federal telecommunications regulator’s price cap ruling is not modified.

The telco has stepped up its fight against the Canadian Radio-television Telecommunications’ (CRTC) May ruling by filing an appeal that includes a petition to the cabinet of the federal government, asking it to support “competitively neutral” access to incumbent carriers’ networks. The incumbent carriers include Bell Canada and Telus Corp.

In its May ruling, the CRTC reduced the annual fee that newer telecommunications companies like AT&T Canada have to pay to incumbent carriers for use of their networks by 10 to 15 per cent – a ruling that is contrary to the pro-competitive telecommunications policy goals that the federal government has pursued since 1993, according to AT&T Canada’s petition.

The petition clearly states that unless the CRTC decision is modified it is doubtful that any competitors to the incumbent carriers will be able to prosper. The company also claims in its petition that 11 competitors have failed in the 18 months prior to the CRTC’s May ruling, leaving only a handful left in the marketplace.

“The past few years…the government has supported the fact that a full and fair competitive telecommunications marketplace is in the best interests of Canadian businesses and the public to ensure that customers receive increased choice, innovation and competitive pricing,” said John McLennan, vice-chair and CEO of AT&T Canada, in a statement. “We believe it is extremely important that the government take this action to redress the existing inequities in the regulatory framework, which has been reinforced by the CRTC’s May ruling.”

In the petition AT&T Canada claims that 55 per cent or $400 million of its annual direct costs come from fees paid to incumbent carriers for access to their networks.

Earlier this month, Toronto-based Call-Net Enterprises Inc. requested the CRTC revisit its May ruling on policy and fees of the digital network access (DNA). The CRTC agreed to the request and will hold a combined policy and fees proceeding to begin in mid-September.