ARCHIVED -  Telecom Costs Order CRTC 95-5

Telecom Costs Order

Ottawa, 19 April 1995

Telecom Costs Order CRTC 95-5

In re: Implementation of Regulatory Framework and Related Matters - Telecom Public Notices CRTC 94-52, 94-56 and 94-58

On 2 March 1995, the Commission received an application for an interim award of costs from the Fédération Nationale des associations de consommateurs du Québec and the National Anti-Poverty Association (FNACQ/NAPO) to cover disbursements and fees incurred in connection with the above-mentioned proceeding.

In its application, FNACQ/NAPO submitted that it satisfies the criteria set out in subsection 45(1) of the CRTC Telecommunications Rules of Procedure (the Rules). FNACQ/NAPO acknowledged its intent to file an application for final costs, and recognized that it would be liable to repay any interim costs not confirmed by the Commission in its decision on final costs.

FNACQ/NAPO served a copy of its application on ACC Long Distance Ltd. (ACC), AGT Limited (AGT), Cam-Net Communications Inc., fONOROLA Inc. (fONOROLA), Le Groupe Vidéotron ltée, Northwestel Inc. (Northwestel), Rogers Cable TV, Smart Talk Network, Sprint Canada Inc. (Sprint), Stentor Resource Centre Inc. (Stentor) (on behalf of its member companies other than AGT), TelRoute Communications Inc. (TelRoute), Unitel Communications Inc. (Unitel) and Westel Telecommunications Ltd. (Westel).

By letter dated 10 March 1995, Commission staff wrote to the parties copied by the applicant, requesting: (1) submissions as to the appropriate respondents for costs on this application; and (2) an answer to the application itself.

Comments were received from ACC, fONOROLA, Northwestel, Unitel and Stentor (on behalf of AGT, BC TEL, Bell Canada (Bell), Island Telephone Company Ltd.(Island Tel), Maritime Tel & Tel (MT&T), Manitoba Telephone Systems (Manitoba Tel), New Brunswick Telephone Company Limited (NBTel) and Newfoundland Telephone Company Limited (Newfoundland Tel) (the telephone companies)). FNACQ/NAPO filed reply comments on 21 March 1995.

The Application

In its application, FNACQ/NAPO requested the following: (1) the costs of one hard copy and one electronic copy of the transcript; (2) an interim allowance of $30,000 for fees of outside experts/consultants; and (3) a reasonable amount for other disbursements.

FNACQ/NAPO submitted that expert fees are disbursements and should be treated as such. According to FNACQ/NAPO, most experts/consultants require payment upon billing. FNACQ/NAPO argued that an interim allowance of $30,000 would represent a "token payment" to its experts and consultants, whose total fees for this hearing are estimated by FNACQ/NAPO to reach at least $120,000.

None of the respondents objected to costs being awarded to FNACQ/NAPO on an interim basis, although Stentor contended that any interim costs award should be limited to disbursements other than fees. ACC and Northwestel noted that the Commission has limited past interim costs awards to disbursements, excluding fees. Stentor and Northwestel also argued that any interim costs award should cover the cost of only a single hard copy of the hearing transcript.

In its reply, FNACQ/NAPO submitted that if the purpose of interim costs is to permit informed and useful representation of public interest interveners, then it will be necessary in some circumstances to extend such awards to cover at least some proportion of disbursements for expert or consultant fees. FNACQ/NAPO contended that interveners that lack the resources to hire knowledgable and capable experts are less likely to be able to participate effectively, thereby making it more difficult to fulfil the test for final costs. FNACQ/NAPO added that a single hard copy of the transcript would be insufficient, given that its counsel, experts and consultants are located in various cities across North America.

The Commission notes that paragraph (b) of s. 45(1) of the Rules requires an applicant for interim costs to demonstrate to the satisfaction of the Commission that it can contribute to a better understanding of the issues by the Commission. Consistent with previous interim costs awards, the Commission considers that in determining whether an applicant has met this criterion, reference should be made both to the applicant's performance to date in the proceeding in which an interim costs award is sought, and to the applicant's past performance in Commission proceedings.

FNACQ/NAPO has filed some of its evidence and a number of interrogatories in this proceeding, but the evidence has not yet been tested by cross-examination. Accordingly, and consistent with its comments in Telecom Costs Order CRTC 93-14, the Commission considers that reference should primarily be made to the applicant's past performance in Commission proceedings to determine whether FNACQ/NAPO has satisfied paragraph (b) of subsection 45(1).

As noted by Stentor, both FNACQ and NAPO were awarded final costs in the proceeding leading to Telecom Decision CRTC 94-19 (the Regulatory Framework proceeding). NAPO was also awarded full costs in the proceeding leading to Telecom Decision CRTC 92-12 (the Long Distance Competition proceeding). In the Commission's view, FNACQ/NAPO has demonstrated that it can contribute to a better understanding of the issues in the Split Rate Base proceeding.

The Commission is satisfied that FNACQ/NAPO meets the criteria for an interim award of costs as set out in s. 45(1) of the Rules.

In Telecom Costs Orders CRTC 91-4, 92-1 and 93-14 the Commission expressly declined to award an interim amount to cover fees. FNACQ/NAPO has not persuaded the Commission that the costs award in this case should include expert/consultant fees. It is not evident to the Commission that FNACQ/NAPO requires an amount for fees in order to meet its immediate costs of participation. Accordingly, the Commission has decided that the award of interim costs will be limited to disbursements other than fees.

With respect to transcript costs, given the increasing use and importance of electronically formatted information in Commission proceedings, the Commission finds it reasonable to include in this order the cost of an electronic version of the hearing transcript, in addition to the cost of a hard copy.

Respondents and Allocation of Costs

In its application, FNACQ/NAPO submitted that the same principles should apply to a determination of appropriate respondents in this case as were applied in the Regulatory Framework proceeding.

ACC, fONOROLA and Northwestel objected to being named as respondents for costs in this proceeding. ACC and fONOROLA argued that it is inappropriate to designate unregulated resellers as respondents to the application. fONOROLA submitted that the Rules explicitly refer to "regulated companies" in defining the appropriate companies to fund costs awards granted under sections 44 and 45, thereby excluding resellers as parties against whom costs may be awarded. fONOROLA further contended that, should it be found to be an appropriate respondent to the costs application, the amount to be awarded should be apportioned among all respondents on a pro-rated basis based on total 1994 revenues derived from the provision of long-distance telecommunications services.

Northwestel argued that it was not made a party to the present proceeding by the Commission; it is registered as an interested party only. Northwestel stated that it does not expect a determination of the issues in this proceeding to apply directly to it, as a different regulatory regime was established for Northwestel in Telecom Decision CRTC 94-19. It registered in this proceeding expecting only to monitor the hearing. In the circumstances, Northwestel argued that the grounds for awarding costs against Northwestel in the Regulatory Framework proceeding do not exist in this proceeding.

Stentor submitted that any costs awarded on this application should be payable by all regulated carriers within the Commission's jurisdiction that are participating in this proceeding, in proportion to their annual revenues. According to Stentor, these would include the carriers that were made parties to the proceeding pursuant to Telecom Public Notice CRTC 94-52 (i.e., AGT, Bell, BC TEL, Island Tel, MT&T, Manitoba Tel, NBTel, Newfoundland Tel, Sprint, TelRoute, Unitel and Westel). In determining the allocation of costs among the respondents, Stentor submitted that the methodology set out in the Regulatory Framework proceeding should apply to this proceeding as well.

Unitel submitted that costs should be paid by the respondents named in FNACQ/ NAPO's application in accordance with the methodology used in the Regulatory Framework proceeding.

In its reply, FNACQ/NAPO submitted that all regulated carriers that will be directly affected by the outcome of the proceeding and that are participating in it should be named as respondents for costs on this application.

The Commission does not agree with fONOROLA that the Rules preclude the Commission from awarding costs against resellers in appropriate proceedings. However, the Commission does not consider that it would be appropriate to do so in the circumstances of this proceeding. The Commission notes that the issues raised in this proceeding affect primarily the telephone companies and interexchange carriers. To the extent that the telephone companies and interexchange carriers are actively participating in the proceeding, the Commission finds it appropriate in this case to designate such parties as proper respondents for interim costs. Accordingly, the Commission finds that the following parties are proper respondents to the interim costs application, and that they should contribute to the award as set out herein: AGT, Bell, BC TEL, Island Tel, Manitoba Tel, MT&T, NBTel, Newfoundland Tel, Sprint, Unitel and Westel (the respondents).

Consistent with Costs Order CRTC 93-14, the Commission considers that the most appropriate way to apportion costs among the respondents is in proportion to their operating revenues from telecommunications activities, as reported in each company's most recent audited financial statements.

The Commission is also of the view that, should the Commission make a final award of costs to FNACQ/NAPO or other parties in the present proceeding, the respondents should be those named in this order, and the method of allocating costs among the respondents should be that identified above.
Order

The Commission hereby grants the application of FNACQ/NAPO for an award of interim costs on the following terms:1. The award is limited to disbursements, other than those relating to fees, incurred in connection with its participation in the present proceeding.

2. FNACQ/NAPO is awarded the costs of one hard copy and one electronic copy of the transcripts in the proceeding.

3. FNACQ/NAPO is awarded a maximum of $15,000 for disbursements other than fees or transcripts.

4. FNACQ/NAPO is directed to submit a maximum of two accounts for expenses incurred to Stentor (on behalf of the telephone companies), to each of the remaining respondents to the application for interim costs and to the Commission. Accounts are to be accompanied by an affidavit of disbursements and supporting documents.

5. Upon receipt of the accounts, Stentor (on behalf of the telephone companies) and each of the remaining respondents are directed to pay to FNACQ/NAPO a portion of the amounts claimed. Payment is to be made forthwith, in the following proportions:

Contribution to Interim Award of Costs (%)

Stentor95.59%
(on behalf of the
telephone companies,
broken down as follows):AGT9.00%
Bell58.42%
BC TEL15.11%
Island Tel0.44%
Manitoba Tel4.14%
MT&T3.64%
NBTel2.73%
Newfoundland Tel 2.11%

95.59%

Sprint1.03%
Unitel3.28%
Westel 0.10%

100%

6. FNACQ/NAPO is directed to file an application for final costs, along with the additional documentation required by s. 45(4) of the Rules, no later than the last day on which it presents final argument.

Allan J. Darling
Secretary General