Vancouver carrier’s fate may hinge on B.C. court battle against Telus

Whether a Vancouver-based local exchange carrier can continue operations may be decided in the B.C. Supreme Court today as it fights against having its service disconnected by Telus Corp.

The court battle is the latest confrontation between the two carriers that stems from a disagreement over how much money Telus is owed for providing infrastructure services to a numbered company called 8640025 Canada Inc., formerly known as Teliphone Navigata-Westel Communication Inc., and a subsidiary of TNW Networks Corp. TNW Networks is a wholly owned subsidiary of Investel Capital Corp.

The two carriers have filed several lawsuits against each other disputing debts owed, and TNW Networks filed a new salvo in the battle on Monday in a press release saying it  got “court assistance” Nov. 18 to prevent Telus from cutting the wire.

TNW’s press release was prompted by a Canadian Radio-television Telecommunications Commission (CRTC) consumer alert issued Sept. 22. That alert warned customers of the TNW subsidiary that the underlying carrier would see its service disconnected where it had commercial arrangements with Telus Corp. as of Nov. 21.

The court assistance came in the form of an automatic stay that was granted when the TNW subsidiary filed a notice of intention to keep its services running with the B.C. Supreme Court on Friday, says TNW’s CEO Sandeep Panesar in a phone interview with IT World Canada.

“That’s why services were not disconnected yesterday,” he says. “A correction to the CRTC notice was required because service hasn’t been disrupted as of yet.”

While no written statement from the court was available at time of publication, that service disruption may not be delayed for long, according to Telus. In an interview with IT World Canada, Telus spokesperson Richard Gilhooley said the B.C. Supreme Court denied a TNW request for an injunction verbally on the afternoon of Nov. 18. TNW also filed a Notice with the court under the Bankruptcy and Insolvency Act, arguing that doing so entitled it to a stay of disconnection services.

“We disagree with their view and take the position that we can disconnect their services any time,” Gilhooley says. “However, we have agreed to refer that issue to the Court during the hearing tomorrow (Wednesday).”

Fight over money owed

Telus says that TNW is in arrears with it and has failed to make good on several payment plans, which is the reason for disconnecting its service. But Panesar says “TNW Networks does not owe Telus any money.”

A search of public court documents reveals that Telus filed a civil claim against Teliphone Navigata-Westel for $4,151,574 in debt on March 16. Panesar says that $3.7 million of that is a disputed amount and the case hasn’t been settled yet.

Another civil claim between Telus and Teliphone Navigata-Westel was settled Aug. 24, with Telus being granted a judgment of $241,095.82. Panesar says that while the TNW subsidiary was found to owe Telus this money, it has also filed claims against Telus for amounts owing or damages.

Telus and TNW are expected to be back in court on Wednesday for an Application for Bankruptcy Order filed by Telus Nov. 3. There, a judge may rule whether the TNW subsidiary wins the stay of any disconnection of its services.

Spare spectrum could have launched new wireless service

Also in Monday’s press release, TNW says that Telus has crossed a line in its role as an incumbent local exchange carrier (ILEC) and interfered directly with an acquisition that the TNW subsidiary was trying to complete of another Canadian telecom operator and an AWS spectrum licence. According to Panesar, Telus was able to use its position as a supplier to the firm targeted for acquisition when it learned of the TNW subsidiary’s plans to launch a new wireless service.

“They didn’t even know the spectrum existed until we went with it to them,” he said. “We said ‘this is how we’re going to enter the wireless market’ and then all of a sudden their terms for that spectrum changed.”

In response to that claim, Telus disagrees with Panesar’s version of events. “TNW tried to purchase another firm. We asked that our debts be paid first,” Gilhooley says. “We didn’t reach agreement and the sale didn’t go ahead.”

Not having that spectrum is a problem, TNW explains, delaying the launch of its service. Panesar describes the service as a “smartphone over IP” wireless system that would host all the data and apps of its users in the cloud. Users would login to a smartphone to access their profile and data, allowing multiple users to share the same device. Voice calls would also support live WiFi to LTE switching so users wouldn’t have to use  more data than necessary, he says. The service would have worked by selling users a data capacity in megabytes, rather than charging in a post-paid model.

“Think of it as gas in a car,” he says. “You want to drive more, you buy more gas.”

Panesar still hopes to bring this service to the market eventually. TNW has also filed a complaint with the Competition Bureau of Canada saying Telus has violated the Canada Competition Act “related to abuse of a dominant position and anti-competitive practices.”

None of the allegations have been proven in court.


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Brian Jackson
Brian Jackson
Former editorial director of IT World Canada. Current research director at Info-Tech

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