Bell moves to disconnect small ISP for non-payment

Bell Canada is also in talks with Look Communications over non-payment for services.(Ryan Remiorz/Canadian Press)

Bell Canada Inc. is embroiled in another dispute with an independent internet service provider, Cybersurf Corp., this time over the issue of payment for services.

Bell has served Calgary-based Cybersurf with a notice to disconnect for failing to pay for rented network access. Cybersurf, like many smaller ISPs, rents parts of Bell's network to provide customers with its own brand of internet and phone services.

A disconnection would render Cybersurf incapable of delivering many of its services to customers.

Neither company would definitively say how much is owed or how long Cybersurf has been in arrears. The smaller ISP, which is publicly traded on the TSX Venture Exchange, disclosed in its most recent financial statements that it has a number of disputes with service providers that could result in the company posting an additional $4 million in costs.

Cybersurf did not name Bell in its statements but said that if its long-term contract with "a telecommunications service provider" is terminated, it will be on the hook for half of the remaining payments, which at the end of 2007 amounted to $494,410.

The company in June posted results that showed a loss of $216,925 for the nine-month period ended March 31, an improvement over a loss of $377,617 a year earlier. However, revenue fell to $10.2 million from $12.3 million. The company has posted losses for several years and currently sees its shares trade for about five cents, down from a 52-week high of 18 cents in October.

Cybersurf claims Bell and other suppliers have overcharged the company, and it is in the middle of negotiating what is owed.

"This is not the first time this has happened," said Marcel Mercia, Cybersurf's chief operating officer. "They've done this before … it's just their internal process."

Mercia declined to say how many customers the company had and who might be affected by a disconnection, although industry observers estimate the number at several thousand. Cybersurf makes most of its money from dial-up and DSL high-speed internet customers.

Mercia also said the company would take legal action if the dispute with Bell cannot be solved, a situation it hopes to avoid.

"Our relationship with Bell is not acrimonious, we have a good relationship," he said.

Bell spokeswoman Jacqueline Michelis declined to comment specifically on the matter, saying only the company does not disclose customer account information.

"The general reasons for why we would disconnect a wholesale customer, the main one would be significant non-payment," she said.

Bell has previously moved to disconnect Milton, Ont.-based Look Communications Inc. for similar non-payment, which would have affected 60,000 customers.

Look also countered Bell's move by saying it had overcharged for its services, and the Ontario Superior Court of Justice last July granted the company a stay of execution with a temporary injunction.

The two companies are still in talks to resolve the issue, a Look representative said.

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