Small internet service providers say large phone providers such as Bell Canada are purposely offering faster download speeds in order to gain a competitive advantage. (Associated Press)

The CRTC is set to rule on whether smaller internet service providers will be able to provide the same download speeds as larger phone company rivals such as Bell Canada Inc. and Telus Corp.

"There will be a decision in a few weeks," said Denis Carmel, spokesman for the Canadian Radio-television and Telecommunications Commission.

At issue is whether smaller internet service providers (ISPs) — including companies such as Calgary-based Cybersurf Corp., Chatham, Ont.-based Teksavvy Solutions Inc. and Toronto-based Acanac Inc. — will be able to provide download speeds above five megabits per second, like the seven-megabit-plus speeds that Bell, Telus and others are offering.

A number of smaller ISPs, led by Cybersurf, have asked the CRTC to change an earlier ruling and guarantee that they will be able to compete on equal footing — in speed — with the larger players. The big phone companies maintain that the CRTC's ruling in March, which decided against giving smaller ISPs access to newer network infrastructure, is correct.

Under CRTC rules, smaller ISPs are able to rent portions of phone companies' networks at regulated rates in order to provide their own customers with internet access.

Most developed countries, including Canada, have given smaller providers this sort of regulated access in order to boost competition in internet access. The rationale was that networks were built decades ago using taxpayer money when the phone companies were government-owned monopolies, and that having competitors build rival infrastructure was either too expensive or impractical.

Internet access networks have evolved over the past few years, however, and phone companies have built new infrastructure that expands their old networks in an effort to boost speeds. Bell, Telus and others have pushed their networks closer to customers' homes with new technology housed in streetside cabinets.

The phone companies had argued that smaller ISPs should be not given access to this new infrastructure because it would discourage their own investment in building it out.

In its March "essential services" decision, the CRTC reaffirmed the smaller ISPs' access to the old network but agreed with the phone companies and denied them rights to the new infrastructure.

Decisions seen as contradictory

Cybersurf objected to the ruling and in June filed a request with the CRTC to review the "continued correctness" of the decision. The company said that Bell, Telus and others are classifying their higher-speed services as "new" and are therefore not offering them to their wholesale ISP customers at reasonable rates, or at all.

The CRTC's decision, Cybersurf said, has resulted a contradictory situation that is giving the phone companies a competitive advantage where they can offer higher-speed services than smaller ISPs.

"Maintaining a regulated service for the purpose of competition, then to turn around and allow it to be delivered on a discriminatory basis so that competitors can't effectively compete serves no purpose and is not efficient regulation," the company said in its CRTC filing.

Cybersurf said Bell in particular was being anti-competitive because it was not only offering higher speeds to its own retail internet customers, it was also slowing down or "throttling" the speeds of its wholesale ISP customers.

"On one hand Bell espouses a policy of equal treatment for all customers, but apparently to Bell some customers can be more equal than others," Cybersurf said. "It has designed their wholesale customers' 'fastest' service to be inferior to its own retail customers' service on purpose."

The CRTC is also currently reviewing Bell's throttling of wholesale customers after receiving a complaint in April from the Canadian Association of Internet Providers, which represents more than 50 small ISPs. The regulator will rule on whether Bell's wholesale throttling is against the law in November, at "about the same time" as it decides on Cybersurf's speed dispute, Carmel said.

Bell also appealing ruling

Bell, for its part, objected to the CRTC's decision in March to continue giving ISPs any regulated access to its network. In April, the company asked the Federal Court of Canada to overturn the decision on the grounds that there is sufficient internet access competition from cable companies such as Rogers Communications Inc. The case is still before the courts.

Bell and Cybersurf are also at each other's throat over a dispute regarding the smaller ISPs' payments for network access. Bell has threatened to disconnect Cybersurf for non-payment, while the smaller company says it has been overcharged for services.

Bell, in conjunction with fellow phone companies Bell Aliant and SaskTel, replied to Cybersurf's CRTC filing by saying that a review of the regulator's decision was unnecessary. The CRTC correctly viewed new infrastructure as "non-essential" and was therefore not subject to regulated access rules, the companies said.

In its own filing, Telus supported the other phone companies.

"Requiring mandatory unbundling [of new infrastructure] would harm investment, harm competition and harm broadband penetration and thus would be contrary to the social welfare of Canadians," the company said.

Cybersurf was supported by fellow smaller ISPs including Yak, Distributel, Primus and the Coalition of Internet Service Providers, a group of nine small ISPs. Cybersurf was also backed by MTS Allstream Inc., the primary phone company in Manitoba, which rents access to networks outside of its home province.