ARCHIVED -  Telecom Costs Order CRTC 96-17

Telecom Costs Order

Ottawa, 23 August 1996

Telecom Costs Order CRTC 96-17

In re: Price Cap Regulation and Related Issues - Telecom Public Notice CRTC 96-8

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

Positions of Parties

In its application dated 6 June 1996, FNACQ/NAPO requested interim costs to cover (i) the cost of one hard and one electronic copy of the hearing transcripts, (ii) the accommodation and travel expenses of its consultant, Ms. Marie Vallée (to a maximum of $3,600), (iii) the accommodation and travel expenses of its expert, Mr. John Todd (to a maximum of $5,000), (iv) translation (to a maximum of $3,000), and (v) expert fees on the issue of stranded investment/depreciation reserve deficiency.

Comments on the application were received on 2 July 1996 from the following companies: AGT Limited (AGT), Stentor Resource Centre Inc. (Stentor), and Unitel Communications Inc. (Unitel). FNACQ/NAPO filed a reply on 2 July 1996. No party objected to an award of interim costs in respect of the hearing transcripts and translation. However, both Stentor and AGT objected to FNACQ/NAPO's claim for expert fees, while AGT alone objected to the accommodation and travel expenses requested.

With respect to its claim for expert fees, FNACQ/NAPO noted that its evidence on the issue of stranded investment/ depreciation reserve deficiency was originally prepared in the fall of 1995 for another proceeding, and that as a result of this issue being moved to the Price Cap proceeding, there could be "well over a year's delay" before FNACQ/NAPO can apply for cost recovery in respect of its evidence. FNACQ/NAPO submitted that while the evidence has not yet been subjected to cross-examination, parties could comment, and the Commission could rule on its usefulness since it has been on the public record for some time. FNACQ/NAPO also submitted that if the Commission does not wish to make a ruling in advance, it would be appropriate for it to make a partial award in respect of these costs.

In its comments, Stentor cited a number of Costs Orders in which the Commission addressed the issue of awarding costs for expert fees and concluded that no award should be granted. Stentor submitted that FNACQ/NAPO has been no more persuasive on this point in this proceeding, and that accordingly, its request for expert fees should be denied. Stentor also submitted that it would be inappropriate for the Commission to rule on the usefulness of FNACQ/NAPO's evidence since (i) to make such a ruling at such an early stage in the proceeding would be akin to pre-approving evidence, and (ii) the evidence has yet to be tested by way of interrogatories and cross-examination.

AGT submitted that it would be premature to determine whether interim costs for expert fees should be awarded in the absence of an opportunity to examine the value and appropriateness of the evidence, and the expert who prepared it. AGT also agreed with Stentor that such a ruling would amount to pre-approval of the evidence.

AGT also objected to the travel and accommodation expenses of FNACQ/NAPO's representatives on the basis that the roles to be performed by Ms. Vallée and Mr. Todd in this proceeding have not been defined. AGT submitted that it would be more appropriate to deal with these items following the final decision of the Commission in this proceeding.

With respect to the issue of who should be liable for costs, Stentor submitted that any costs awarded should be allocated among "each of the persons made Parties to the proceeding by the Commission". AGT stated that "costs should be shared by all Parties to this proceeding", on the basis that the issues to be considered are of a generic nature. Unitel took the position that the Stentor member companies and all equal access carriers and interexchange carriers (IXCs) with a substantial interest in toll contribution issues (as determined by their inclusion as parties by the Commission in Telecom Public Notice CRTC 95-52, 1996 Contribution Charges, 8 December 1995 (Public Notice 95-52)) should be made respondents to costs.

In its reply, FNACQ/NAPO noted that its request for expert fees was made as a result of an anomalous situation, in which the evidence was prepared for one proceeding but was moved to another, through no fault of its own. With respect to AGT's objection to the travel and accommodation expenses, FNACQ/NAPO noted that these expenses are significant and unavoidable if FNACQ/NAPO is to present an effective case before the Commission. FNACQ/NAPO also noted that costs have been awarded for the work of Ms. Vallée and Mr. Todd in numerous past proceedings.

Commission Ruling

The Commission is of the view that FNACQ/NAPO has satisfied the criteria for an interim award of costs set out in s. 45(1) of the CRTC Telecommunications Rules of Procedure (the Rules).

The Commission is of the view, however, that costs should not be awarded for the expert fees claimed by FNACQ/NAPO. Paragraph 45(1)(d) of the Rules requires that an applicant for interim costs satisfy the Commission that it does not have sufficient financial resources available to participate effectively in the absence of an interim award of costs. The Commission notes that FNACQ/NAPO's evidence was prepared prior to this proceeding without the assistance of an interim cost award, and is unable to conclude that FNACQ/NAPO requires additional financial resources in order to meet its immediate costs of participation.

The Commission notes FNACQ/NAPO's concern over the potential delay associated with the recovery of its costs for this evidence. However, the Commission is of the view that it would be inconsistent with s. 45(1) of the Rules to approve recovery of costs on the basis of potential delay where the intervener has not satisfied the Commission that it requires interim costs in order to participate effectively.

With respect to AGT's objection to the travel and accommodation expenses claimed by FNACQ/NAPO, the Commission is of the view that, consistent with past practice, it is appropriate to award an interim amount for travel and accommodation at this stage of the proceeding.

The main focus of the present proceeding is to examine issues relating to the price cap plan under which the federally regulated telephone companies will operate. While the Commission is of the view that the main beneficiaries of a price cap regime will be those companies, it is also of the view that companies in competition with the telephone companies will have a significant interest in the outcome of the proceeding.

With respect to Unitel's contention that the companies made parties to the Public Notice 95-52 proceeding, including resellers, should be liable for costs, the Commission notes that in Telecom Costs Order CRTC 95-5, the Commission declined to make resellers respondents to awards of costs, noting that the issues raised in the Split Rate Base proceeding primarily affected the telephone companies and interexchange carriers. The Commission considers that the issues to be considered in the present proceeding are similar to those considered in the Split Rate Base proceeding, in that they will primarily affect the telephone companies and IXCs. Accordingly, the Commission does not consider that resellers should be made respondents to this award of interim costs.

In light of the above, the Commission finds it appropriate that Stentor (on behalf of its members made parties to this proceeding), as well as Sprint Canada Inc. (Sprint), Unitel and Westel Telecommunications Inc. (Westel) be designated as respondents to the application.

Consistent with past Costs Orders, the Commission is of the view that the most appropriate way to apportion costs among the respondents is in proportion to their operating revenues from telecommunications activities for the most recent fiscal year.

DIRECTION AS TO COSTS

1. The application of FNACQ/NAPO for an award of interim costs in the above-referenced proceeding is hereby approved, on the following terms.

2. The award is limited to disbursements, other than those relating to fees, incurred in connection with its participation in the present proceeding.

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

4. FNACQ/NAPO is awarded a maximum of $3,600 for the travel and accommodation expenses of Ms. Vallée, and a maximum of $5,000 for the accommodation and travel expenses of Mr. John Todd.

5. FNACQ/NAPO is awarded a maximum of $3,000 for translation.

6. FNACQ/NAPO is directed to submit a maximum of two accounts for expenses incurred to the respondents named above, and to the Commission. 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 91.57%

Sprint 3.32%

Unitel 4.91%

Westel 0.20%

100.00%

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 close of the record in this proceeding.

Allan J. Darling
Secretary General

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