Federal Court Agrees to Hear TekSavvy’s Appeal Against CRTC Decision on Wholesale Broadband Tariffs

The Federal Court has accepted to hear TekSavvy Solutions Inc.’s appeal against a controversial decision by Canada’s telecommunications regulator on wholesale broadband rates.

In May, the Canadian Radio-television and Telecommunications Commission (CRTC) overturned its own 2019 decision lowering the rates that large telephone and cable companies can charge small Internet service providers (ISPs) to access their networks. .

The move sparked outrage among small ISPs, including Chatham, Ont., Based Teksavvy, who also called on the federal cabinet to reinstate the 2019 ruling and remove CRTC Chairman Ian Scott.

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In order to encourage competition in the Internet market, the telecommunications regulator requires large providers to sell network access to smaller players at regulated prices. Independent ISPs then sell the service to their own customers.

In August 2019, the CRTC reduced the rates that large telecommunications companies can charge and ordered them to make substantial retroactive payments – totaling about $ 325 million at the time, according to court documents – to third-party operators for compensate them for the higher interim rates that had been in place since 2016.

The move sparked legal and regulatory challenges from major telecommunications companies, who argued the new rates were so low they would stifle network investment. Both the Federal Court of Appeal and the federal cabinet refused to overturn the CRTC’s decision, leaving the final decision to the regulator itself.

After a lengthy review, the commission reversed its 2019 decision, claiming to have found significant errors. The CRTC has chosen to largely maintain the interim tariffs in effect since 2016, with some adjustments.

The CRTC overthrow prompted Teksavvy to abandon plans to enter the wireless market and pull out of an auction for 5G airwaves due to insufficient funds.

In court documents, the telecoms independent argues that the regulator erred in reverting to 2016 tariffs instead of starting the process of calculating the cost of providing the service over again.

The Federal Court of Appeal on Wednesday granted Teksavvy leave to appeal the CRTC’s decision. A CRTC spokesperson declined to comment.

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