The independent carrier is asking the CRTC to ban bundled deals between carriers and apartment developers

Beanfield Metroconnect, an independent telecommunications company, is asking the industry regulator to prohibit arrangements between carriers and developers that provide turnkey Internet service to all units in a given apartment building.

The Toronto-based company specifically targeted Rogers for its use of “bundled agreements” in an application filed with the CRTC last September. It said the deal would eliminate a consumer’s ability to choose their service provider and that it gave Rogers an “undue advantage” that limited competition.

It wants the commission to declare Rogers’ bundled agreements in violation of communications law and order it to end such deals.

Todd Hofley, Benfield’s vice president for policy and communications, said bundled agreements create “monopoly islands” where competing providers cannot compete to serve residents as easily.

The agreements typically cover the first five to eight years after an apartment is built and see residents paying for internet through rent or apartment fees.

“We are happy to compete against incumbents when the playing field is level and level,” Hofley said.

While Beanfield’s app focuses on Rogers’ wholesale deals, Hofley said it’s a practice that has become increasingly common over the past five years by many major carriers, making it difficult for companies like Beanfield to sign up customers for new apartment buildings.

He said the CRTC’s ruling in his company’s favor could set a precedent barring all carriers from signing pool agreements with developers.

More than half of Toronto’s development projects are wholesale deals

Benfield estimates that nearly half of all new condo or residential developments in the Toronto area have senior deals outstanding.

The CN Tower and Toronto skyline blur in the background.  In the foreground, construction workers stand on the upper floors of an unfinished building.
An apartment under construction is seen in the Wallace Emerson neighbourhood, in Toronto, with the CN Tower in the background, on June 28, 2023. (Patrick Morrell/CBC)

That’s based on a survey of 110 projects the company has approached for potential access since January 2022. Of those projects, 54 already had major deals covering nearly 40,000 units, the CRTC reported.

Bundled agreements also pose a safety issue when an outage occurs, Hoefle said.

“If you have a building full of Rogers and everyone’s Internet is on Rogers, the elevator phones in the building are on Rogers, and the building’s concierge and security system is on Rogers, and that system goes down, you’re blind. There’s no room for Rogers for you to turn,” he said.

“I think we all learned during the Rogers outage in July 2022 how important resiliency is to our communications infrastructure.”

Beanfield plans to raise the issue when its representatives appear this week at a CRTC hearing on high-speed wholesale access service.

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Rogers spokesman Cam Gordon pointed to the formal response the company submitted to the CRTC last October regarding Beanfield’s request. Rogers argued that its bundled billing arrangements “neither negate the end user’s choice… nor constitute an undue preference.”

“Indeed, these arrangements, which the commission has consistently supported in the past, enable (multi-dwelling) residents to take advantage of discounted broadband rates and innovative communications within the building,” wrote Rogers, Pamela’s vice president of regulation. Dinsmore.

Other telecommunications companies, including Bell Canada, Telus Corp. and Eastlink, also opposed Beanfield’s request in interventions filed with the CRTC.

“Like moving into a furnished apartment,” says the professor.

Bulk deals do not prevent competing carriers from selling their services directly to individual residents, even if they live in a building that has an agreement with a particular provider, Dinsmore wrote.

“They can — as Rogers does in these circumstances — seek access to fiber backhaul to individual units in response to customer service requests or connect the entire building at any time,” she said.

Rogers’ argument amounts to encouraging residents to pay twice for overlapping services, “which is a great idea about how competition works,” Hoefley said.

“The problem is they can’t afford to pay twice,” he said. “Because if the market disappears, no one will build in this building.”

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Gregory Taylor, an associate professor in the Department of Communications, Media and Film at the University of Calgary, said it can be “very difficult to displace” an existing airline where there is a big deal.

“There is no way financially for a competitor to come in and offer the service,” he said.

“The existing company will already have everyone as a customer, so convincing people to change is difficult. It involves investment from new companies coming in.”

But for some residents, the convenience factor may be worth not having another option, he said. He likened the situation to moving into an already furnished apartment.

“Anyone in Canada who has dealt with the hassle of trying to find high-quality internet service will tell you that it can often be a pain,” Taylor said, adding that buildings with larger deals generally have higher-quality fibre.

“In this case, you move into a building and it’s there and ready for you.”

A CRTC spokesperson said it is reviewing Beanfield’s request and the other companies’ rebuttals, but has not yet been able to address the arguments.

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