Cloudwifi co-founders Gary Kenning, left, and Arif Hudda, pose with their antannae on the roof of 1 Victoria St. in Kitchener, Ont. on Sept. 11, 2018. The company is in a legal dispute with Bell Canada over use of the in-building internet wiring.J.P. MOCZULSKI
A Kitchener, Ont.-based startup that uses rooftop antennas to deliver high-speed internet is turning to the CRTC to fend off a legal fight with Bell Canada and keep its customers connected.
Cloudwifi operates in parts of the Greater Toronto Area and southeastern Ontario and serves high-density residences such as condos and apartment buildings. It uses unlicensed wireless airwaves and multiple rooftop antennas connected back to a fibre-optic network to deliver high-speed internet signals.
But while it has built or leased most of its network itself, it also needs access to the wires already inside those buildings to connect individual customers with its service. In an application last week, Cloudwifi asked the Canadian Radio-television and Telecommunications Commission (CRTC) to confirm it can access those wires after BCE Inc.-owned Bell turned to the courts for an injunction against the startup’s operations in two buildings, one in Toronto and one in Kitchener.
The four-year-old company doesn’t have that many customers – in the low thousands – but the legal and regulatory showdown over Cloudwifi’s new business model comes as the Competition Bureau is investigating whether alternative providers are making any headway in Canada’s internet market, which is dominated by the major telephone and cable companies.
CRTC rules that date back to the 1990s opened up the residential telecom market to competition by forcing the incumbents to resell their services on a wholesale basis to independent providers – companies such as TekSavvy, Distributel and Comwave are among the largest.
Yet, the competition watchdog noted in May that 87 per cent of Canadian internet subscribers still use services from either their incumbent telephone or cable provider. The bureau is conducting a market study of the broadband industry and plans to report back next year.
“What we’re dealing with now is Bell trying to squash us or eliminate us,” Gary Kenning, co-founder and vice-president of Cloudwifi said in an interview. “All of this flies against the spirit of CRTC rulings that go back 20-plus years that state inside wires can be accessed by other service providers.”
He said CRTC rules were meant to avoid a tangle of dozens of wires being built inside every building. If his company loses its fight with Bell, he says Cloudwifi will build its own wires, though it would be disruptive to each building and mean at least temporary disconnections for some customers. “But we’re not going down that path yet because we believe we should have access to that inside wire.”
Mr. Kenning and his co-founder Arif Hudda started Cloudwifi with their own money and say they have not raised any outside capital for the 12-person company. They participated in a sales accelerator program run by Kitchener-Waterloo startup hub Communitech in 2016, focusing on refining their technology installation process. They offer plans starting at $35 a month with no contracts and no hardware rental fees as customers must bring their own routers.
Bell declined to comment for this story, saying it plans to file a response with the CRTC and will publicly state its position at that time.
In the company’s August application to the Ontario Superior Court of Justice requesting an injunction, it argued that since Cloudwifi is not licensed by the CRTC to provide voice services, it is not entitled to connect to Bell’s in-building wiring or to the central box of wires found in what’s known as a telephone room in most apartment buildings.
“Cloudwifi has no legal right to access and use Bell-owned equipment," Bell said in the court filing.
In its CRTC application, Cloudwifi said it recently qualified for “proposed status” to become a licensed home phone provider (such operators must meet a number of obligations including offering 9-1-1 service) and it should therefore be permitted to make arrangements to access the wires inside buildings. Cloudwifi has also reached an agreement to provide television services through a CRTC-licensed TV provider and argued that too should give it access to the wires.
Justice Darla Wilson of the Ontario Superior Court of Justice in Toronto ruled on Monday that the court will hear Bell’s request for an injunction against Cloudwifi in February. At the same time, the court will hear a motion by Cloudwifi arguing that the matter should be dealt with by the CRTC and not the legal system.
Interventions in the CRTC application are due Oct. 4.