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Telecom Public Notice
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Ottawa, 19 July 1991
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Telecom Public Notice CRTC 1991-55
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STATUS OF RESELLERS UNDER THE RAILWAY ACT - APPLICATION BY TELECOMMUNICATIONS WORKERS' UNION TO REVIEW AND VARY TELECOM DECISION CRTC 85-19
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On 11 April 1991, the Telecommunications Workers' Union (TWU) filed an application pursuant to section 66 of the National Telecommunications Powers and Procedures Act asking that the Commission review and vary its determination in Interexchange Competition and Related Issues, Telecom Decision CRTC 85-19, 29 August 1985 (Decision 85-19), that resellers, as defined in that Decision and in Resale and Sharing of Private Line Services, Telecom Decision CRTC 90-3, 1 March 1990 (Decision 90-3), are not required to be regulated by the Commission.
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In Enhanced Services, Telecom Decision CRTC 84-18, 12 July 1984 (Decision 84-18), the Commission noted (at page 30) that its jurisdiction is limited to "companies" as defined in section 320(1) (now section 334) of the Railway Act. The Commission concluded that the jurisdiction granted to it by the Railway Act is properly viewed as extending only to "those companies within federal jurisdiction that may be considered to be operating a telephone or telegraph system", and that enhanced service providers who made use of underlying basic telecommunications services for the provision of their service offerings are not "companies". In Decision 85-19 (at page 89), the Commission concluded that the resale and sharing market was similar in many respects to the enhanced services market and that the conclusions reached in Decision 84-18 were appropriate with respect to resale and sharing.
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In its application, TWU requests that the Commission declare that resellers, as defined in Decisions 85-19 and 90-3, are "companies" under the Railway Act and are required to file tariffs of tolls for the Commission's approval. In the alternative, TWU seeks a declaration that resellers that provide interprovincial or international telecommunications services are "companies" and are required to file tariffs of tolls for the Commission's approval.
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In support of its application, TWU submits that the Commission, in making its determination that resellers are not "companies", erred in law in the following respects:
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(1) in failing to rule that resellers are within the legislative authority of Parliament by virtue of section 92(10)(a) of the Constitution Act, 1867;
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(2) in interpreting the definition of "company" in the Railway Act as being restricted to those companies "that may be considered to be operating a telephone or telegraph system", thereby deleting the words "or line" from the definition; and
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(3) by taking into account (a) "similarities" between theresale and sharing market and the enhanced services market, (b) the "benefits to be derived from competition", and (c) whether the absence of regulation of resellers would constitute an "undue competitive advantage".
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TWU submits that, in ruling in Decision 85-19 that resellers do not operate telephone systems or lines, the Commission also erred in fact. TWU also argues that there have been fundamental changes in circumstances since Decision 85-19 was issued. First, TWU notes that, in AGT v. CRTC, (1989) 61 DLR (4th) 193, the Supreme Court of Canada decided that federal jurisdiction with respect to telecommunications is more extensive than was previously thought to be the case. The scope of the Commission's jurisdiction is therefore far greater than was commonly assumed at the time that Decision 85-19 was made.
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Second, TWU notes that, at the time that Decision 85-19 was rendered, the Commission purported to have the authority to exempt "companies" from the requirement to file tariffs. However, as a result of the decision of the Federal Court of Appeal in TWU v. CRTC and CNCP, [1989] 2 F.C. 280, it has been established that the Commission does not have the discretion to exempt companies from the requirement to file tariffs of tolls.
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Third, TWU submits that the growth of the resale industry since 1985 has demonstrated the sorts of activities in which resellers engage, with a number of resellers offering interprovincial and international services.
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Finally, TWU suggests that there is substantial doubt as to the correctness of Decision 85-19.
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In its application, TWU states that resellers offer long distance telecommunications services on a continuous and regular basis to a variety of destinations in the various provinces of Canada, as well as to the United States and overseas. TWU argues that resellers provide services on an integrated basis with, or as a part of, a continuous system of a federal work or undertaking. They are, therefore, part of the interprovincial system or undertaking and are within the legislative authority of Parliament by virtue of section 92(10)(a) of the Constitution Act, 1867. TWU submits that all resellers are within federal jurisdiction, or, alternatively, that resellers that offer interprovincial or international services are within federal jurisdiction.
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TWU also states that ownership of facilities is not a criterion contained in the definition of "company" in the Railway Act, and that the relevant criteria are whether a company has power to construct or operate a telephone system or line and to charge tolls. TWU argues that some resellers have networks that constitute "telephone systems" and that, in any event, all resellers operate telephone "lines". TWU submits that resellers participate in the operation of the entire telephone company network that transmits calls. TWU also submits that resellers charge their customers tolls or rates for their services, within the meaning of "tolls" as defined in the Railway Act.
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The Commission seeks comment on the issues raised by TWU's application. In particular, the Commission seeks comment with respect to the following:
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(1) whether Decisions 85-19 and 90-3 should be reviewed by the Commission with respect to its determination that "resellers" are not "companies" as defined in the Railway Act;
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(2) whether Decisions 85-19 and 90-3 should be varied to specify that all resellers, as defined in these Decisions, are "companies" as defined in the Railway Act and are required to file tariffs of tolls for the Commission's approval;
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(3) whether Decisions 85-19 and 90-3 should be varied to specify that resellers, as defined in these Decisions, that provide telecommunications services on an interprovincial or international basis are "companies" as defined in the Railway Act and are required to file tariffs of tolls for the Commission's approval.
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Procedure
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1. TWU's application and related documents may be examined at the offices of the CRTC in the following locations:
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Room 201
Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage
Hull, Quebec
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Suite 1007
Bank of Commerce Building
1809 Barrington Street
Halifax, Nova Scotia
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Complex Guy-Favreau
200 René-Lévesque Blvd. West
6th Floor
East Tower
Montréal, Quebec
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Suite 1810
275 Portage Avenue
Winnipeg, Manitoba
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Suite 1380
800 Burrard Street
Vancouver, British Columbia
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A copy of the application and related documents may be obtained by any interested person upon request directed to TWU at the address noted below.
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2. The mailing addresses to be used in connection with this proceeding are:
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Mr. Allan J. Darling
Secretary General
CRTC
Ottawa, Ontario
K1A 0N2
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and
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Mr. Jim Aldridge
Rosenbloom & Aldridge
Counsel for Telecommunications Workers' Union
300-171 Water Street
Vancouver, British Columbia
V6B 1A7
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3. Persons wishing to comment on TWU's application (interveners) may do so by writing to the Commission by 23 August 1991. A copy of any comments must be served on TWU at the address noted above, also by 23 August 1991.
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4. TWU may file a reply to any comments, serving copies on all interveners, by 27 September 1991.
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Allan J. Darling
Secretary General
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