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Ottawa, 18 October 1993
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Taxation Order CRTC: 93-10
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In re: The New Brunswick Telephone Company Limited - Rate of Return on Average Common Equity for 1993, Telecom Decision CRTC 92-23 and Telecom Costs Order CRTC 93-5
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Philippa Lawson, Public Interest Advocacy Centre on behalf of the New Brunswick Anti-Poverty Association and Consumers' Association of Canada (NBAPA et al) S.J. Palmer for New Brunswick Telephone Company Limited (NB Tel).
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TAXATION OF THE COSTS OF NBAPA et al
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Taxing Officer: John Keogh
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This order constitutes the taxation of costs awarded to NBAPA et al in the case of The New Brunswick Telephone Company Limted - Rate of Return on Average Common Equity for 1993, Telecom Decision CRTC 92-23, 18 December 1992 (Decision 92-23).
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Costs were awarded to NBAPA et al by Telecom Costs Order CRTC 93-5 (Costs Order 93-5), in accordance with subsection 44(1) of the CRTC Telecommunications Rules of Procedure (the Rules).
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NBAPA et al submitted a Bill of Costs in the amount of $28,710.34, consisting of $27,841.50 in fees and $868.84 in disbursements. These amounts are inclusive of 3.5% GST, in recognition of the 50% GST rebate available in the circumstances of this case.
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In the course of the taxation, the following issue was raised and discussed:
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Expert Witnesses Fees
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NBAPA et al have claimed $26,910.00 (inclusive of 50% GST) for fees in relation to their expert witnesses Drs. Booth and Berkowitz. A total of 26 days were claimed, including 16 days for the preparation of evidence.
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NB Tel states it is concerned that much of the evidence provided by Drs. Booth and Berkowitz in the proceeding leading to Decision 92-23 is identical to the evidence provided by them in the proceeding leading to Newfoundland Telephone Company Limited - Revenue Requirements for 1992 and 1993, Telecom Decision CRTC 92-15, 28 August 1992 (Decision 92-15). As it believes much of the information used by NBAPA's experts in the NB Tel proceeding was previously used, NB Tel argues the claim for costs should for the most part be disallowed. More specifically, NB Tel urges that only those costs of the expert witnesses which pertain directly to the updating of information specific to the proceeding leading to Decision 92-23 should be allowed.
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In its reply, NBAPA et al states that the 16 days claimed for the preparation of evidence,
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already recognizes the synergy between the two cases. (Eight days work was "saved" as a
result of overlap in testimony).
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NBAPA further states that rate of return evidence, particularly within the same industry, is clearly similar from case to case. This is necessary for the evidence to be consistent from case to case and to provide participants with an overall perspective, not simply incremental changes. Finally, NBAPA states that
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the costs of those parts that are similar cannot be borne by any one firm. Instead, cost recovery
is spread over a number of cases.
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Pursuant to paragraph 44(6)(b) of the Rules, costs awarded
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shall not exceed those necessarily and reasonably incurred by the intervener in connection with
its intervention.
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The claim of NBAPA et al of costs for 16 days for the preparation of the expert witnnesses evidence must be judged against this requirement.
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In performing this taxation, I have reviewed the comments of NBAPA et al and NB Tel as well as the evidence filed by Drs. Booth and Berkowitz in the proceedings leading to Decison 92-23 and Decision 92-15. In doing so, I have taken note of the similarity between much of the evidence, as well as the differences, including the fact that the evidence in the decision 92-15 proceeding included a critique of the evidence of the company's two external financial witnesses. I also note that in Taxation Order: 1993-9, re: Newfoundland Telephone Company Limited - Revenue Requirements for 1992 and 1993, Telecom Decision CRTC 92-15 and Telecom Costs Order CRTC 93-9, the Office of the Consumer Advocate for the Province of Newfoundland and Labrador was awarded the 24 days claimed for the preparation of evidence by Drs. Booth and Berkowitz.
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I am not satisfied that 16 days for the preparation of the evidence of Drs. Booth and Berkowitz was "necessarily and reasonable incurred". I accept the point made by NBAPA et al that there will be a consistency between the evidence filed by an expert from one rate case to the next. However, the point is whether the costs claimed were "necessarily and reasonable incurred" for the intervention in the Decision 92-23 proceeding. NBAPA et al's statement the "Eight days work was "saved" as a result of overlap in testimony", suggesting the value of the additional eight days for the Decision 92-15 proceeding is included but not charged for in the Decision 92-23 proceeding evidence does not appear to be correct. The reason for questioning this statement is that presumably the eight day difference between the two proceedings also includes, as noted above, the critique of Newfoundland Telephone Company Limited's external financial witnesses evidence, something not found in the Decision 92-23 proceeding evidence. I also note NBAPA et al's statement that "cost recovery is spread over a number of cases". Taking into account all of the above, I find that 12 days for the preparation of the experts evidence to be more reasonable.
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I also note, as did the taxing officer in Taxation Order 1993-7, that the $1,000.00 per diem claimed for preparation represents an 11% increase over the $900.00 allowed in In re: The Island Telephone Company Limited - Revenue Requirement Proceedings for 1990 and 1991, Taxation Order: 1991-3 and in In re: Maritime Telegraph and Telephone Company Limited - revenue Requirement for 1990 and 1991, Telecom Decision CRTC 90-30 and Telecom Cost Order CRTC 91-2, Taxation Order: 1991-4. For the same reason stated in Taxation Order 1993-7, I will only allow $975.00 for preparation of the expert's evidence.
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Costs as Taxed
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I hereby tax the fees and disbursements as follows:
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Fees
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Counsel (9 hrs x $100) $900.00
Expert Witnesses (Drs. Booth and Berkowitz) (22 days x $975) 21,450.00
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GST (3.5%) 670.50
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Disbursements
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Counsel 489.05
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GST (3.5%) 8.79
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Expert Witness (Drs. Booth and Berkowitz) 371.00
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Total Fees and Disbursements $23,889.34
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John Keogh
Senior Counsel
Canadian Radio-television and Telecommunications Commission
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