Sammy Hudes, The Canadian Press
Published on Monday, February 12, 2024 5:49 am EST
Last updated Monday February 12, 2024 5:49 am EST
Independent telecommunications provider Beanfield Metroconnect is asking the industry regulator to ban agreements between operators and developers that provide turnkey Internet services for all units in a particular condo building.
In an application filed with the CRTC last September, Toronto-based Beanfield specifically targeted Rogers Communications Inc. for its use of “bulk agreements,” arguing that such agreements “effectively eliminate end-user choice” and “constitute an unfair advantage” that limits competition.
He wants the commission to declare that Rogers’ massive deals violate the Telecommunications Act and require him to terminate those deals.
Todd Hofley, Beanfield’s vice president of policy and communications, said bulk deals create “monopoly islands” where rival providers can’t compete for residents’ service as easily. The agreements typically cover the first five to eight years after the condo is built and have residents pay for the Internet through rent or condo fees.
“We’re happy to compete against the incumbents as long as the playing field is even and level,” Hofley said.
While Beanfield’s filing focuses on Rogers’ bulk deals, Hofley said it’s a practice that has become increasingly common over the past five years by several major carriers, making it difficult for companies like Beanfield to register clients in new residential buildings.
He said a CRTC ruling in favor of his company could set a precedent that prevents all operators from entering into agreements with developers.
Beanfield estimates bulk deals exist for about half of all new condo or apartment developments in the Toronto area. This is based on a survey of 110 projects the company contacted for potential access from January 2022.
Of those, 54 projects already had bulk deals covering nearly 40,000 units, he told the CRTC.
Hofley said bulk deals also pose a safety issue when there is a power outage.
“If you have a building that is occupied by Rogers and everyone’s Internet is on Rogers, the building’s elevator phones are on Rogers, the concierge and the building’s security system are on Rogers, and that system goes down, you’re blind. There’s nowhere for you to turn,” he said.
“I think we all learned during the Rogers outage in July 2022 how important the resilience of our telecommunications infrastructure is.”
Beanfield plans to raise the issue when its representatives appear this week at a CRTC hearing on wholesale high-speed access service.
Rogers spokesman Cam Gordon pointed to the company’s official response filed with the CRTC last October to Beanfield’s filing.
Rogers argued that its bulk billing arrangements “do not eliminate end-user choice…and do not constitute undue preference.”
“Indeed, these agreements, which have been consistently supported by the commission in the past, allow residents (of multi-dwelling units) to benefit from discounted broadband pricing and innovative in-building communication services,” he wrote Pamela, vice president of regulatory regulation at Rogers. Dinsmore.
Other telecommunications companies, including Bell Canada, Telus Corp. and Eastlink, also opposed Beanfield’s application in interventions filed with the CRTC.
Dinsmore wrote that bulk agreements do not prevent rival operators from selling their services directly to individual residents, even if they live in a building where an agreement has been signed with a particular provider.
“They can, as Rogers does in these circumstances, seek access to…connect fiber to individual units in response to customer service requests or cable the entire building at any time,” he said.
Hofley said Rogers’ argument amounts to encouraging residents to pay twice for overlapping services, “which is a fascinating insight into how competition is supposed to work.”
“The problem is that they can’t pay twice. Because if the market disappears, no one else is going to build in that building,” he said.
Gregory Taylor, an associate professor in the department of communications, media and film at the University of Calgary, said it can be “very difficult to dislodge” an established airline when a bulk deal is in place.
“There’s really no way, from a financial standpoint, for a competitor to come in and offer service,” he said.
“The current company will already have everyone as customers, so getting people to change is difficult. It implies an investment from the new companies that arrive.”
But he said for some residents, the convenience factor may justify the lack of options. He compared the situation to moving into an apartment that is already furnished.
“Anyone in Canada who has had to deal with the hassle of trying to find quality Internet service will tell you that it can often be a hassle,” Taylor said, adding that buildings with wholesale offerings usually have a facility of high quality fiber.
“In this case, you move into a building and it’s there and ready for you.”
The CRTC said it is reviewing Beanfield’s application and rebuttals from other companies, but could not yet address the arguments.
“As this application is currently before the CRTC for consideration, we are unable to comment,” spokesperson Mirabella Salem said in an email.
As Canada’s major cities grapple with issues of density and how to address the national housing shortage, Taylor said Beanfield’s application raises an issue with significant ramifications.
“As we build more and more high-density housing in this country, we’re going to have to be able to address this question: ‘Okay, who’s providing the cable Internet service, the fiber lines in these new homes?'” he said. .
“Everyone now recognizes that this is an essential service. Given what we have learned during the COVID era, this issue of building access is an increasingly important issue and one that the CRTC and the government cannot avoid.”
This report by The Canadian Press was first published Feb. 12, 2024.
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