ARCHIVED -  Telecom Costs Order CRTC 96-15

Telecom Costs Order

Ottawa, 16 August 1996

Telecom Costs Order CRTC 96-15

In re: Implementation of Regulatory Framework - Local Interconnection and Network Component Unbundling - Telecom Public Notices CRTC 95-36 and 96-11

 Application for Interim Costs by the Fédération nationale des associations de consommateurs du Québec/National Anti-Poverty Organization (FNACQ/NAPO).

In its application, dated 6 June 1996, FNACQ/NAPO requested interim costs to cover the following expenses incurred in relation to the above-noted proceeding: (1) the cost of one hard copy and one electronic copy of the transcript of the oral hearing; (2) accommodation and travel expenses for Ms. Marie Vallée, consisting of $2,500 for accommodation and $500 for travel; (3) accommodation and travel expenses for Mr. John Todd, consisting of $2,500 for accommodation and $1,500 for travel; and (4) translation costs of $2,000.

In its application, FNACQ/NAPO submitted that it satisfies the criteria set out in paragraphs 45(1)(a) - (d) of the CRTC Telecommunications Rules of Procedure (the Rules). In particular, FNACQ/NAPO submitted that it does not have sufficient financial resources to continue to participate effectively in this proceeding without an award of interim costs.

Comments on the application were received from the Canadian Cable Television Association (CCTA), Clearnet Communications Inc. (Clearnet), Stentor Resource Centre Inc. (Stentor) and Unitel Communications Inc. (Unitel).

FNACQ/NAPO filed its reply comments on 27 June 1996.

Eligibility for Costs

None of the parties filing comments objected to the awarding of interim costs to FNACQ/NAPO. Stentor submitted, however, that no costs awarded to FNACQ/NAPO, either at the interim or final stage, should be associated with stranded investment/depreciation reserve deficiency issues, since FNACQ/NAPO has indicated that it will be seeking costs for work performed in relation to these issues in the proceeding initiated by Price Cap Regulation and Related Issues, Telecom Public Notice CRTC 96-8, 12 March 1996.

In its reply, FNACQ/NAPO stated that costs should be available with respect to any issue within the scope of the proceeding. Noting that at least some aspects of the broad issue of stranded investment/depreciation reserve deficiency appear to remain within the scope of this proceeding, FNACQ/NAPO submitted that the Commission should reserve its discretion to determine, through the costs process, the appropriate proceeding for which certain work is properly billed.

The Commission considers that FNACQ/NAPO has satisfied the criteria for an interim award of costs in s. 45(1) of the Rules, and that it should be awarded its interim costs as requested. With regard to Stentor's submission that costs for work performed in relation to stranded investment/depreciation reserve deficiency should not be recovered in the context of this proceeding, the Commission notes that any costs awarded are only recoverable to the extent that they are incurred in relation to an issue that is within the scope of the proceeding. In this regard, the Commission notes that in its letter of 10 June 1996, it determined that evidence and submissions dealing specifically with the issue of depreciation reserve deficiencies are not within the scope of the proceeding initiated by Telecom Public Notice CRTC 95-36. Accordingly, the Commission notes that any costs incurred exclusively in relation to the issue of depreciation reserve deficiencies will not be recoverable in this proceeding. The Commission considers that any dispute over a particular claim for costs may be addressed in the final costs and taxation processes.

Respondents and Apportionment of Costs

Stentor submitted that any costs awarded, interim or final, should be borne equitably by all the participants to this proceeding. Given that the issues being determined in this proceeding will affect more than just the telephone companies and interexchange carriers, Stentor suggested that it would be inappropriate to burden the Stentor companies with a greater share of costs than other corporations and groups participating in this proceeding.

Unitel submitted that the appropriate respondents to the application by FNACQ/NAPO are: (a) the Stentor member companies; and (b) those parties that have filed evidence supporting alternate proposals for local interconnection and that have indicated a desire to enter the local market as a competitor (i.e., CCTA, Sprint Canada Inc. (Sprint), MFS Communications Company, Inc. (MFS), Clearnet and Microcell Telecommunications Inc. (Microcell). In Unitel's submission, this proceeding was instituted for the purpose of determining the appropriate form, rates, terms and conditions of tariffs for unbundled network components and of interconnection arrangements for local service providers, and was not intended to address the ongoing needs of long distance competitors for unbundled network components for the provision of long distance services.

The CCTA submitted that the appropriate respondents for costs on this application are the Stentor member companies, CCTA, Clearnet, MFS, Microcell, Sprint and Unitel. The CCTA further submitted that any costs awarded by the Commission should be apportioned among respondents in proportion to their operating revenues from telecommunications activities, which, for the CCTA, would exclude broadcasting services such as cable television services.

Clearnet stated that it is prepared to contribute its fair share of the interim costs awarded to FNACQ/NAPO, and submitted that other participants, many of whom will be affected by the issues being considered in this proceeding, should be prepared to do likewise. Clearnet remarked that it is the Stentor member companies whose local monopolies will be most impacted by the outcome of the proceeding. Clearnet went on to note, however, that a number of other parties have filed evidence in this proceeding, including CCTA, the Ontario Telephone Association (OTA), Microcell, MFS, Sprint, AIReach Integrated Network Ltd. (AIReach) and Clearnet. Clearnet further stated that several other parties have participated through the filing of interrogatories. Clearnet noted that in the past, the appropriate formula for apportioning interim costs has been based on operating revenues from telecommunications activities.

The Commission considers that parties with a significant interest in the outcome of this proceeding include both the existing providers of local telephone service as well as potential competitive providers. To the extent that any of these parties, or parties acting on their behalf, have chosen to participate actively in this proceeding through the filing of evidence/submissions, the Commission considers it appropriate to designate such parties as proper respondents for costs in this proceeding.

 Accordingly, the Commission names the following parties as respondents to the interim costs application and requires these parties to contribute to the interim award as set out herein: Stentor (on behalf of AGT Limited, BC Tel, Bell Canada, The Island Telephone Company Limited, MTS NetCom Inc., Maritime Tel & Tel Limited, The New Brunswick Telephone Company, Limited, and NewTel Communications Inc.), AIReach, CCTA, Clearnet, MFS, Microcell, OTA (on behalf of its member companies) and Sprint.

 Turning to the issue of the proper method of apportioning the costs awarded among the respondents, the Commission notes that in recent costs awards involving multiple respondents, costs typically have been apportioned among the respondents in proportion to their operating revenues from telecommunications activities. This approach has generally resulted in the Stentor member companies being responsible collectively for upwards of 95% of costs in large proceedings.

 The Commission considers that the above method of apportioning costs is not appropriate in the circumstances of this proceeding, where several of the parties that have a particularly strong interest in the outcome of this proceeding, and which have been determined to be appropriate respondents to this costs application, have little or no revenue from telecommunications activities. Given the broad scope and impact of this proceeding, and in light of the nature of the various respondents' interests in its outcome, the Commission is of the view that existing and potential providers of local services should share the burden of intervener costs in a more equitable fashion.

 Accordingly, the Commission considers that Stentor should be responsible for 75% of the costs awarded, with the other respondents sharing the remaining costs roughly equally. The Commission considers that CCTA should assume a higher percentage of costs than the remaining respondents given its especially strong interest in the outcome of this proceeding, evidenced by its high level of participation, and in light of the fact that it is a national organization representing a number of potential competitive providers of local service.

 DIRECTION AS TO COSTS

 1. The application of FNACQ/NAPO for an award of interim costs in respect of the above-noted proceeding is hereby approved.

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

 3. FNACQ/NAPO is awarded a maximum of $3,000 for the accommodation and travel expenses of Ms. Vallée.

 4. FNACQ/NAPO is awarded a maximum of $4,000 for the accommodation and travel expenses of Mr. Todd.

 5. FNACQ/NAPO is awarded a maximum of $2,000 for the costs of translation.

 6. FNACQ/NAPO is directed to submit, to each of the respondents named above and to the Commission, a maximum of two accounts for expenses incurred. Accounts are to be accompanied by an affidavit of disbursements and supporting documents.

 7. Upon receipt of the accounts, the 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 (%)

 Stentor 75%
CCTA   7%
 AIReach 3%
 Clearnet 3%
MFS   3%
 Microcell 3%
OTA   3%
 Sprint 3%

Total   100%

 8. 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 10 days after the date for filing reply argument.

 Allan J. Darling
 Secretary General

COS96-15_0