Wightman Telecom is petitioning the federal cabinet in opposition to recent decisions by the Canadian Radio-television and Telecommunications Commission (CRTC) that company officials say will undermine their financial viability.
“We do believe this will be a detriment not only to us but to our customers as well,” Wightman vice president and general manager Tom Sullivan told the Advertiser.
“It will greatly inhibit our ability to provide the high level of service that we currently do provide.”
The company, which has been providing service in Wellington County for over a century, is one of about 30 petitioning the government as part of the Ontario Telecommunications Association (OTA) and a similar group in Quebec.
The group is asking for a stay of CRTC decisions last year regarding the introduction of local telephone competition in their serving areas.
Sullivan explained the CRTC moves will create “a digital divide” between rural and urban customers and negatively impact the independent companies in three ways:
– significantly reducing the subsidy they receive for providing services in “high-cost servicing areas” (which was first introduced to ensure rural and urban customers pay the same fees for similar service);
– forcing established, smaller companies to cover the cost of upgrades to the system to allow competitors to offer services in the same areas; and
– once competition is in place, costs to maintain the system continue to rise for the original company (the OTA group would like such costs to come from the same fund as the subsidy).
Sullivan said overall, the CRTC changes will cause independent companies to lose revenue from the subsidy, while causing a significant increase in costs – both to facilitate competition (he says Wightman would be looking at “hundreds of thousands of dollars”) and for ongoing service and maintenance.
“We have no problem with competition … but let the competition pay for the cost of implementing that competition,” Sullivan said.
He explained every telecommunications provider in Canada pays into the subsidy fund, but only certain ones can use it to offset the higher costs of operating in rural areas.
“It’s not a level playing field,” Sullivan said referring to the CRTC changes.
“It does not work the same in rural Canada. We think the CRTC is using a cookie-cutter approach – and they’ve got it wrong.”
The OTA first petitioned the CRTC asking the commission to review and change its decisions, but that request was denied. So, two weeks ago the group petitioned the federal cabinet, hoping it will ask the CRTC to stay the decision while cabinet has an opportunity to review the changes.
Sullivan said the cabinet has the authority to modify CRTC decisions and he noted local MPs like Perth-Wellington representative Gary Schellenberger have “taken our concerns to heart.”
Schellenberger told the Advertiser he sympathizes with companies such as Wightman and he has taken the OTA petition to Minister of Industry Christian Paradis, who has heard the same complaints in his own riding of Mégantic-L’Érable in Quebec.
Schellenberger noted he is not a member of privy council, where much of the discussion could take place, and he said the matter will likely not be discussed in regular session.
He wonders what the government itself can do, considering the CRTC is “an arm’s length” regulatory body. However, he said Paradis is looking into the matter and will be having discussions with CRTC officials.
“The biggest problem I have [with the CRTC decisions] is the cost for equipment … being borne by these small companies,” Schellenberger said. “I think that’s drastically wrong.”
The MP said there were rumblings several years ago that the subsidies for companies in high-cost servicing areas would be lowered or cancelled altogether.
“I’m looking into that as well,” he said.
Sullivan said he expects a cabinet decision on the request for a stay to be announced by March 17, and a final decision on possibly altering the CRTC decisions in a few months. If the independent operators are unsuccessful, the CRTC decisions will take effect immediately, he added.
Sullivan said the CRTC has suggested the companies can raise rates to help compensate for any increase in costs resulting from the changes.
However, Sullivan said larger companies moving into the area – such as cable companies which, unlike incumbent operators, can offer service solely to customers in homes near their existing network with no obligation to serve more rural or remote customers in the area – could offer service at close to half the cost of any increased rates.
“So in all likelihood, no,” he said when asked specifically if rates will increase for the 6,000 or so Wightman customers throughout Bruce, Huron, Wellington and Grey counties.
OTA executive director Jonathan Holmes said, “Our companies believe we have served our customers and communities well; and we’re confident cabinet will conclude that the CRTC decisions are ill-considered, unfair and will do far more harm than good.”
