When preference is not undue

Section 27(2) of the Telecom Act says “No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.”

So, what does that mean?

When a complaint comes into the CRTC under this section, there is a two part test to determine if there has been a violation of this provision of the Act. As the CRTC wrote in a case we’ll look at today, “The Commission must first determine whether there is a preference or disadvantage. If it determines that there is one, it must then decide whether the preference or disadvantage is undue or unreasonable.”

Today’s story takes place in the greater Halifax area and the story began 6 years ago.

In 2016, Eastlink proposed to locate its Nova Scotia point of interconnection for third-party internet access (TPIA) at its data centre in Pennant Point, located about 30 kms from downtown Halifax. At the time, the CRTC concluded that based on the information provided at the time, there may be a disadvantage to competitors (and a corresponding preference in favour of Eastlink), but it would not be undue or unreasonable.

In 2020, City Wide filed a complaint with the CRTC, alleging that representations that had been made in 2016 about the availability of transport facilities to Pennant Point were incorrect, and that the data centre is not carrier neutral. It sought the relocation of the provincial point of interconnection to downtown Halifax. CNOC and Teksavvy generally supported City Wide’s position; Rogers and Shaw generally supported Eastlink.

The CRTC again found that the Pennant Point location “subjects City Wide to a disadvantage and provides Eastlink with a corresponding preference.” In particular, the Commission found that a lack of competitive options for transport facilities to Pennant Point, coupled with the fact “that Eastlink’s own retail operations are not similarly affected … results in Eastlink subjecting City Wide to a disadvantage and providing itself with a corresponding preference.”

However, the CRTC found that the availability of “economically feasible transport options” isn’t the only consideration for determination of a suitable point of interconnection. The CRTC found that it is reasonable for a carrier, such as Eastlink in this instance, to consider its existing network configuration and “attempt to limit the extent of any modifications needed for this configuration.”

Finally, the CRTC found that the evidence “does not support the view that transport costs have been a significant barrier to competition”. Evidence in the proceeding showed that City Wide has increased the number of customers served by Eastlink’s aggregated access service, and overall, the number of wholesale internet end-users on Eastlink’s network has grown since the approval of the point of interconnection at Pennant Point.

As such, the CRTC refused to order the relocation from Pennant Point to downtown Halifax, effectively finding that the location (and any associated advantage or preference for Eastlink) is not unreasonable.

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