Bell and Telus fight back in broadband campaign

MONTREAL — Major telecom players Bell (TSX:BCE) and Telus (TSX:T) are being targeted in a campaign for affordable broadband Internet services to businesses and consumers.

MONTREAL — Major telecom players Bell (TSX:BCE) and Telus (TSX:T) are being targeted in a campaign for affordable broadband Internet services to businesses and consumers.

Smaller competitor MTS Allstream (TSX:MBT) along with the Canadian Association of Internet Service Providers launched a campaign Thursday that they say will help preserve competition in broadband services.

They want Canadians as well as businesses to sign the petition that takes aim at a CRTC decision that the coalition says enables Canada’s two biggest telecom companies to shut out competitors.

The coalition said it wants to make sure network facilities built by Bell and Telus are accessible and affordable to a range of competitors, also offering broadband services. The coalition also includes the Canadian Federation of Independent Business.

“They will either not give us access at all or charge us markups of 300 or 1,000 per cent, rates that the competitive market would never support,” MTS chief corporate officer Chris Peirce said.

The result is less competition, he said from Winnipeg.

“The effect you can see in the marketplace, especially for small and medium-sized businesses, and for consumers in some instances, is that price are going up. Those prices have been deregulated.”

Peirce said Canadians should sign the petition to show Ottawa they have grassroots support. He’s hoping that cabinet will either overturn the decision or get the CRTC to take another look at its ruling when it makes a decision in December.

Both Bell and Telus say the CRTC has already rejected MTS Allstream’s request.

Bell’s Mirko Bibic said MTS’s campaign is misleading and is really about high-capacity fibre networks that are needed to deliver services to big businesses, such as banks.

“So this has nothing to do with consumer Internet services,” said Bibic, senior vice-president of regulatory and government affairs.

“MTS does not compete outside Manitoba in the consumer Internet space.”

Bibic said Allstream is one of Bell’s biggest customers for deregulated services and Bell is willing to negotiate.

“What MTS wants is for these services to continue to be regulated with the price even lower. They want it at cost. We don’t want to sell it to them at cost. We are putting all the risk capital up.”

Michael Hennessy, senior vice-president of government and regulatory affairs at Telus, said MTS should make the appropriate network investments and expect to pay commercial rates for services.

“The day of the subsidy has to be over if we’re going to build world-class Internet networks in this country. We’re happy to provide services if it’s based on commercial rates,” Hennessy said.

“We’re not trying to build something that MTS can piggyback on without actually making the investments they need to remain competitive in this country.”

Telecom analysts were divided on the campaign.

Ian Grant of the SeaBoard Group said he supports MTS Allstream’s point of view on competition and believed the CRTC decision was flawed, adding there’s a good chance it will be overturned.

“It’s a giant step backward for competition in Canada,” he said, adding that prices will rise and the entire market will suffer.

However Mark Goldberg disagreed, saying the coalition is trying to change the rules and influence what will ultimately be a political decision by cabinet.

Companies reselling Internet services should look beyond telecom companies to build network facilities, he said, citing cable companies as one example.

“What they should be focusing on is investing in infrastructure, finding backers for real investments,’ said Goldberg of Goldberg & Associates Inc. in Thornhill, Ont.”

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