CANADIAN ISPs BATTLE

Television Digest with Consumer Electronics, Dec 20, 1999

Canadian appeals court is expected to hold hearing soon on Canadian cable industry request for stay of nation's regulators' order requiring resale of high-speed Internet access to Internet Service Providers (ISPs). Action would be latest round in Canadian version of U.S. open access battle. Stay, requested by Cogeco, Canada's 4th largest cable company, would apply to resale requirement that was to have started Dec. 13. Canadian ISPs say cable isn't following rules of Canadian Radio-TV & Telecom Commission (CRTC); cable says it is. CRTC spokesman Denis Carmel said he expects ISPs to file new complaint, after which Commission could start new comment round.

CRTC turned down appeals from Canadian cable to stay resale rules and turned aside challenges on more technical pricing question. Industry continues to challenge resale provisions, with Canadian Cable TV Assn. (CCTA) asking CRTC Dec. 10 to drop resale requirement for small systems.

Canadian Assn. of Internet Providers (CAIP) told CRTC that one major cable company, Videotron, tried to make its high-speed access available for resale at 25% off basic retail rate of $39.95 monthly it charges noncable subscribers, rather than discount from $29.95 rate for its cable subscribers. CAIP said CRTC ruling requires discount from lowest retail rates. It also said at least one Canadian cable company is asking ISPs for $25,000 "initial fee" before it will discuss making Internet access available for resale. CRTC said CAIP is correct, but Videotron is challenging that reply.

CRTC said its resale policy wasn't meant to be punitive, as Cogeco argued: "The order was made solely to allow for the development of a competitive market for Internet service." As cable carriers "could not yet provide access to their facilities, mandated resale was the only alternative that would allow competitive ISPs to serve the retail market on the same footing as cable carriers." Without discount, CRTC said, mandated resale would be meaningless and cable companies need only to resell their Internet services until open access is available under tariff.

Number of regulatory proceedings is making ISPs unhappy. CAIP's Thomson said cablers were supposed to start offering access to competitors Dec. 13, but said industry repeatedly argued case before CRTC on issues that already have been decided. CAIP said situation "brings the regulatory system into question." CCTA spokesman disagreed, saying: "This is the first time anywhere that resale cable services have been done. We're working on it."