ARCHIVED -  Telecom Costs Order CRTC 92-7

Telecom Costs Order

Ottawa, 30 June 1992

Telecom Costs Order CRTC 92-7

In re: Unitel Communications Inc. & B.C. Rail Telecommunications/Lightel Inc. - Applications to Provide Public Long Distance Voice Telephone Services and Related Resale and Sharing Issues: Application for Costs

Application for costs by the Consumers Association of Canada CAC.

Background

In Telecom Costs Order CRTC 91-5 (Costs Order 91-5), the Commission granted CAC an award of interim costs limited to disbursements for a single hard copy of transcripts for the above-noted proceeding, not to exceed a maximum of $25,000. The Order provided that 60% of the costs awarded were payable by the applicants to the main proceeding, with the remaining 40% payable by the respondent telephone companies. Unitel Communications Inc. (Unitel) and B.C. Rail Telecommunications/ Lightel Inc. (BCRL) were directed to contribute to their 60% share, and the respondent telephone companies were directed to contribute to their 40% share, in proportion to their operating revenues from telecommunications activities.

The Order also required CAC to file an application for final costs, along with the documentation required by section 45(4) of the CRTC Telecommunications Rules of Procedure (the Rules), within 60 days of the last day of the hearing.

Submissions of Parties

CAC filed its application for costs with the Commission on 16 September 1991, although many of the parties were not served until sometime later. In its application, CAC sought the full costs of its intervention, submitting that its intervention had satisfied the criteria contained in section 44 of the Rules.

All of the respondent telephone companies and BCRL filed comments opposing the application by CAC for a final award of costs. These parties questioned CAC's contribution to a better understanding of the issues and criticized CAC's participation at the hearing and the evidence and final argument that it filed. For example, British Columbia Telephone Company Ltd. (B.C. Tel) suggested that CAC's participation largely constituted a learning process for its representative, Newfoundland Telephone Company Limited (Newfoundland Tel) submitted that CAC's evidence had contained errors which required revisions and Bell Canada (Bell) argued that CAC's evidence and argument demonstrated a misunderstanding of certain fundamental concepts. Unitel did not file comments with regard to the application.

In addition to their criticism of the CAC intervention, several of the parties also made submissions to the effect that they were not proper respondents to the CAC's application for costs. Noting that the costs provision in the Rules apply only to "regulated companies", BCRL submitted that it was not a legitimate respondent to the CAC application. Newfoundland Tel, The New Brunswick Telephone Company, Limited (N.B. Tel) and Maritime Telegraph and Telephone Company, Limited (MT&T) disputed the appropriateness of being named as respondents to the CAC application since CAC's evidence was based on data obtained only from Bell and B.C. Tel and CAC did not address the evidence or submissions of the Atlantic telephone companies.

BCRL, MT&T, N.B. Tel and Newfoundland Tel each submitted that CAC's application for a final award of costs should be dismissed as CAC filed its application with the Commission 13 days after the deadline provided for in the Rules. Some noted that they were not served with the application for costs until sometime later, and argued that they had been prejudiced by CAC's dilatory conduct.

In its reply, CAC submitted, among other things, that the negative response from the telephone companies was predictable, given the recent change in CAC's position with regard to long distance voice competition. CAC argued that though its Residential Telephony study was based on data from Bell and B.C. Tel territory, the study would benefit all Canadian telephone consumers. CAC submitted that its approach to the applications of Unitel and BCRL should not be viewed as incorrect, simply because CAC does not subscribe to the telephone companies' price elasticity approach to traffic expansion. According to CAC, its evidence was accurate and the other major parties to the proceeding also had to revise the material they had submitted.

DIRECTION AS TO COSTS

1. The application of CAC for a final award of costs in respect of the above titled proceeding ishereby approved on the following terms.

2. The Commission considers that CAC has not fully met the criteria set out in section 44(1) of theRules. In particular, the Commission is unable to conclude that all aspects of CAC'sparticipation contributed to a better understanding of the issues by the Commission. TheCommission considers that parts of CAC's evidence were simplistic and based on flawedassumptions. Specifically, the Commission considers that CAC failed to take price elasticity andmarket growth into account in reaching its conclusion on revenue growth, and that itsassumptions that a reduction in toll rates would lead to an increase in revenues has not beendemonstrated. The Commission is also of the view, as stated in Telecom Decision CRTC92-12 that CAC's approach to measuring affordability, which centredaround an examination of all elements of a subscriber's telephone bill, including optionalservices, was not of assistance to the Commission in considering the applications of Unitel andBCRL. Finally, the Commission considers that some of CAC's cross-examination time wasspent exploring issues which were not of direct relevance to CAC's position, and indeed, whichwere of only marginal relevance to the proceeding as a whole.

3. The Commission finds that none of the applicants or respondents to the main proceeding havesuffered any prejudice as a result of the late filing of the CAC application for costs.

4. The Commission has therefore concluded that CAC is entitled to all of its transcriptdisbursements and 35% of its other costs.

5. With regard to BCRL's submission that it is not a proper respondent to this costs applicationsince it is not a "regulated company" within the meaning of the Rules, the Commission notesthat it retains a general power, pursuant to section 76 of the National TelecommunicationsPowers and Procedures Act, to make awards of costs and to direct, without limitation, bywhom such costs are to be payable.

6. With regard to the submissions of Newfoundland Tel, N.B. Tel and MT&T that they were notappropriate respondents to CAC's application for costs, the Commission notes that CAC'sintervention did not deal specifically with the subscribers of these companies. While this hasbeen taken into account by the Commission in assessing to what extent CAC has met thecriteria set out in subsection 44(1) of the Rules, the Commission does not consider this factor tobe relevant in determining which parties should be required to contribute to the award of costsmade herein. As the Commission noted in Telecom Costs Order 91-4, themain proceeding considered a number of issues of vital interest to telephone subscribers acrossCanada. It is the Commission's view that these subscribers benefited from the full and frankdiscussion of these issues by a diverse range of participants that included CAC at the centralhearing. Accordingly, the Commission considers that it would be inappropriate to excludeNewfoundland Tel, N.B. Tel or MT&T from participation in this award.

7. The Commission directs that the costs awarded herein shall be paid to CAC by the applicantsand respondents to the main proceeding in the same proportions as set out in Costs Order91-5.

8. Costs awarded herein shall be subject to taxation in accordance with subsection 44(6) of theRules.

9. Costs awarded herein shall be taxed by Allan Rosenzveig.

10. CAC shall, within thirty days of the issue of this order, submit a bill of costs and an affidavit ofdisbursements to the Taxing Officer, serving copies on the applicants and respondents to themain proceeding.

11. The applicants and respondents to the main proceeding may, within two weeks of receipt ofthose documents, file comments with the Taxing Officer with respect to the costs claimed,serving a copy on CAC.

12. CAC may, within two weeks of receiving comments from the applicants and respondents to themain proceeding, file its reply, serving copies on these parties.

13. In all cases, documents must actually be received, not merely mailed, by the dates indicated.

Allan J. DarlingSecretary General