Kitchener's CloudWifi prepares for legal, CRTC fight with Bell Canada over fibre optic cable

CloudWifi, a small but growing internet service provider in southwestern Ontario, is going toe-to-toe with Bell Canada over who has the right to the fibre optic cable in condos, apartment buildings and businesses.

'This is about consumer choice and competition,' says CloudWifi co-founder Gary Kenning

CloudWifi co-founder Gary Kenning says he doesn't think his company should have to invest in 'outdated infrastructure' and offer phone service to customers who don't want it, just to be able to tap into Bell's infrastructure. (Jackie Sharkey/CBC)

CloudWifi, a small but growing internet service provider in southwestern Ontario, is going toe-to-toe with Bell Canada over who has the right to the fibre optic cable in condos, apartment buildings and businesses. 

"This is about consumer choice and competition," CloudWifi vice president and co-founder Gary Kenning told CBC Kitchener-Waterloo. 

"For the past 20-something plus years the CRTC has always ruled that telecommunications companies can use the wires inside a building. This was done to open up competition decades ago and to make sure that there was more competition in the marketplace and increased consumer choice."

Buildings in Kitchener, North York

The dispute has to do with how CloudWifi used and installed equipment in two Ontario buildings: one at 10 Northtown ​Way in North York, the second at 270 Spadina Road E. in Kitchener. 

In the North York building, CloudWifi is using the Bell-installed wiring inside the building, which the CRTC has said is permitted for small ISPs, to eliminate redundant infrastructure. 

In the Kitchener building, CloudWifi has run its own fibre optic wires but it's the customer-facing termination point, called a P3000 box. It's used by bell, Rogers, CloudWifi and the electric supplier. Bell Canada says the P3000 is their property and off-limits to CloudWifi. 

"Bell is saying, 'We don't have any problem with Rogers being in that box, but we have a problem with CloudWifi being in the box.' So that's back to some of the whole monopolistic attitude that CRTC doesn't like and doesn't stand for," Kenning said. 

'No legal right' to in-building wiring, says Bell

The matter is working its way through the Ontario Superior Court of Justice as a civil proceeding, initiated​ by Bell Canada, as well as before the CRTC as an application to clarify a section of its existing regulations.

Bell Canada declined to comment beyond its position outlined in the Notice of Application. CBC has obtained an amended version of the application, which was filed Aug. 20. 

It says CloudWifi has "no legal right to use in-building wiring, P3000 boxes and network facilities owned by Bell without Bell's knowledge and consent." 

'Outdated infrastructure'

Bell's second problem is that CloudWifi isn't a local exchange carrier — or LEC, the technical term for a licensed home phone provider. 

"In 2003, when the [CRTC] legislation was written it said you needed to be a LEC, and it made a lot of sense," explained Matt Stein, president and chair of the Canadian Network Operators Consortium and CEO of Distributel, the country's largest independent ISP. 

We didn't want to go back in time and buy all this really old infrastructure to build a home phone company- Gary Kenning, co-founder of CloudWifi

"These days, I don't think they would say that. So I know exactly why CloudWifi would shrug their shoulders and go 'Well that's silly.'"

Silly or not, registering as an LEC is currently an "important step" to becoming a telecom company in Canada, said Stein — comparing it to incorporating as a business and getting an HST number.

"You can't just go into business and say, 'I'll get to that eventually,' you actually have to register your business," Stein said. "And if CloudWifi wants to leverage a regulation that specifically says 'for LECs,' one would think a good step would have been to register as one."

Kenning said his company has no interest in becoming a home phone provider, but will if that's the only way to win against Bell Canada. Its application to the CRTC, which CBC has obtained, said the company has applied for and received "Proposed CLEC" (competitive local exchange carriers) status. 

"When we set out to build the best internet company, we didn't want to go back in time and buy all this really old infrastructure to build a home phone company," he said.

"It seems ludicrous that in 2018 you can say a home phone company can use something but an internet company couldn't."

The beginning of something big

For competitive reasons, Kenning said he doesn't want to divulge exactly how many people subscribe to CloudWifi, except to say his company is in buildings in cities all over southwestern Ontario including London, Kitchener, Waterloo, Niagara Falls, Toronto and Oshawa.

And while the battle is now on behalf of just his clients, the impact could potentially be much bigger, Stein said.  

"The number of people that are impacted by what has happened in the past couple of months may be small, but it actually is the beginning of something much larger," Stein told CBC K-W's The Morning Edition host Craig Norris on Tuesday. 

"Fibre is where it's all going. So while the number of users affected up to now is small, the number of users or customers affected from here forward will be very large. Anybody in a condo unit should be concerned about this, any kind of a multi-dwelling unit should be concerned about this."

CloudWifi has applied to the Ontario Superior Court of Justice to have Bell's civil application dismissed and direct it to be dealt with by the CRTC. 

That's where the dispute belongs, Stein said, but it could take up to a year. 

Interventions in the CRTC application are due Oct. 4, while Bell's civil case will be heard by the Ontario Superior Court in February 2019.

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