Bell Canada signage is pictured in Ottawa on Wednesday Sept. 7, 2022. The Federal Court of Appeal has rejected BCE Inc.'s request for a stay of a regulatory decision that will allow independent companies to sell internet services to their customers using its fibre network in Ontario and Quebec.THE CANADIAN PRESS/Sean Kilpatrick

The Federal Court of Appeal has rejected BCE Inc.'s request for a stay of a regulatory decision that will allow independent companies to sell internet services to their customers through Bell's fibre network in Ontario and Quebec.

The court's decision was delivered Friday, a day after Bell Canada announced it was slashing 4,800 jobs and could further cut network spending based in part on the CRTC's direction.

It also came just ahead of the next phase of the federal telecommunications regulator's study of the same issue. The CRTC kicked off a five-day hearing on Monday as part of its review into internet competition in Canada.

The CRTC announced last November it would temporarily require large telephone companies, namely Bell and Telus Corp., to provide competitors with access to their fibre-to-the-home networks in Canada's two largest provinces within six months. (The rule doesn't apply to Canada's other major carrier, Rogers Communications Inc., which uses a cable network.)

But Bell asked the court for permission to appeal the CRTC's temporary ruling and for a stay of that decision pending the outcome of the court process, which would effectively delay independent companies from obtaining access to Bell's network to sell their internet services this May.

The court will hear the appeal, but dismissed the company's motion for a stay of the decision.

"I find that it has not established that it will suffer irreparable harm if the stay is not granted," Justice Mary Gleason wrote.

In a statement, Bell spokeswoman Jacqueline Michelis said that "while we are disappointed the court did not grant our stay request to stop the interim order, we think the court made the right decision to grant our request for leave to appeal."

"The CRTC’s interim decision to force Bell to provide access to its networks in Quebec and Ontario is already having a negative impact on the build out of our new fibre network," she said.

"The CRTC should prioritize continued network investment over network resale, or risk Canada falling behind in the digital economy."

Bell is also awaiting a decision from the federal cabinet, which it has asked to review the regulator's move.

The CRTC's decision last November was meant to stimulate competition for internet services, noting at the time its review could potentially make that direction permanent and apply it to other provinces.

Its hearing this week, which is set to hear from 22 groups, will focus on three main questions, CRTC chairwoman Vicky Eatrides said in her opening remarks. Those include how well internet services markets are working for Canadians currently, what changes are necessary to ensure a more competitive future, and how the CRTC can provide clarity so companies "can invest in and bring more high quality, innovative services to market."

"In recent years, we have seen declining competition between internet providers," Eatrides said.

"Many internet providers — independent providers — have been bought out by the large companies and those that are left have fewer subscribers than they once did. We also know that telecommunications networks are expensive to build, to maintain and to operate, so unless there is a prospect for returns, investors will put their money elsewhere."

Bell has accused the CRTC of "predetermined" outcomes related to its review, noting the commission's direction thus far reduces its incentive to continue building out its fibre network.

But the Competition Bureau argued Monday during its appearance at the CRTC hearing that effective wholesale fibre access can foster more competition for internet services.

The competition regulator recommended the CRTC update its wholesale access framework to provide independent carriers "access to an increasingly important network while also serving to reduce asymmetry between incumbent facilities-based competitors that can distort competition."

"Competition among internet providers is not only about price and service quality in the short-run, but also about building and improving internet networks in the long-run," said Competition Bureau deputy commissioner Krista McWhinnie.

John Lawford, executive director of the Public Interest Advocacy Centre, urged the regulator not to succumb to the "threats of investment withdrawal" by large carriers.

"The commission has a mandate to achieve the telecommunications policy objectives, not to return monopoly rent to incumbents," Lawford said.

"The incumbents are bullying the commission into using their overheated definition of 'investment' as a trump card that always wins. They must be told 'no.'"

This report by The Canadian Press was first published Feb. 12, 2024.

Companies in this story: (TSX:BCE,TSX:T, TSX:RCI.B)

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