Channelling money from Astral deal to NorthwesTel is anti-competitive, CRTC hearing told
ICE Wireless and Iristel urge commission to foster competition in Canada’s North and deny Bell’s proposal to send “public benefits” money to its subsidiary
Montreal, PQ, September 12, 2012 – Calling BCE Inc.’s plan to funnel $40 million to its subsidiary as part of the Astral Media acquisition “wrong on a number of regulatory and business levels,” Ice Wireless and Iristel warned the regulator that such a scheme will harm, if not kill, the newly established competitive market in Canada’s North.
“When Northerners have trouble obtaining basic wireline services or even something as trivial as call display, we know there is a Digital Divide and that it is real,” said Samer Bishay, president of both Ice Wireless and Iristel. “It is healthy competition that drives innovation and value for customers, not anti-competitive former monopolies.”
Mr. Bishay was testifying today before the Canadian Radio-television and Telecommunications Commission hearing into the $3.4 billion acquisition of Astral by BCE Inc. The CRTC has a “public benefits” policy on broadcasting deals that requires new owners to pledge new money towards the Canadian broadcasting system, typically to third-parties such as content producers.
In this case, BCE has said it would spend $240 million in public benefits. But that includes $40 million to its wholly-owned NorthwesTel for telecom infrastructure. And this would not be “new money” as the CRTC has already ordered NorthwesTel to upgrade its aging infrastructure.
“We realize that $40 million inside this multi-billion-dollar Astral deal doesn’t add up to a hill of beans to a giant like Bell,” Mr. Bishay said. “But for Canadians in the North and competitors to NorthwesTel, it is a huge hill of beans.”
He added that if the CRTC sees fit to approve $40 million in public benefits to telecom infrastructure in Canada’s North, the money should be divided among all players, not simply given to NorthwesTel, which has received tens of millions of dollars in subsidies the past decade. Last December, the CRTC in decision 2011-771 chastised NorthwesTel because its shareholders have benefited far more from the subsidies than its customers.
Established in 1999, Iristel Inc. (“Iristel”) was granted a carrier license by the Canadian RadioTelevision Commission (CRTC) in 2000 and is one of Canada’s largest VoIP service providers with a coast-to-coast network. Iristel offers a complete portfolio of IP services in Canada, including hosted IP PBX, virtual faxing, virtual roaming, and global IP trunking products and services. For more information please visit www.iristel.ca.
Established in 1999, Ice Wireless (“ICE”) is a telephone and internet company that provides service to rural and remote communities in northern Canada. ICE provides a full range of affordable and leading edge voice, video and data services, including GSM cellular, to Yellowknife, Inuvik, Hay River, Aklavik, Behchoko and Whitehorse. In terms of population, the Ice Wireless network covers 70% of the Northwest Territories and 78% of the Yukon. ICE cellular customers can use their phones across Canada through a roaming agreement with Rogers Wireless and Fido. For more information please visit www.icewireless.ca.
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