ARCHIVED -  Telecom Costs Order CRTC 98-7

Telecom Costs Order

Ottawa, 18 February 1998

Telecom Costs Order CRTC 98-7

In re: Implementation of Price Cap Regulation, 1997 Contribution Charges and Related Issues, Telecom Public Notice CRTC 97-11 (PN 97-11)

Reference: 8085-RP003/97

1. Application for Costs by the Consumers' Association of Canada (Manitoba) and Manitoba Society of Seniors (CAC/MSOS).

POSITION OF PARTIES

2. By letter dated 20 November 1997, CAC/MSOS applied for costs in relation to this proceeding. CAC/MSOS submitted that they had met the criteria for an award of costs set out in subsection 44(1) of the CRTC Telecommunications Rules of Procedure (the Rules). In this regard, CAC/MSOS noted that they were the only party to file evidence on the appropriateness of the shareholder entitlement proposed by MTS NetCom Inc. (MTS). CAC/MSOS submitted that consistent with the reasons given in Telecom Costs Order CRTC 97-4 dated 25 February 1997, MTS should be named as the respondent to any cost award.

3. In its answer dated 1 December 1997, MTS objected to CAC/MSOS' application. MTS argued that CAC/MSOS have not established financial entitlement as (i) counsel to CAC/MSOS, the Public Interest Law Centre (PILC), incurred the actual costs of CAC/MSOS' intervention, and (ii) the PILC receives funding from government, the Manitoba Law Foundation, members of the Manitoba Bar Association and law firms. MTS submitted that CAC/MSOS would receive a windfall if costs are granted, and that the amounts paid to CAC/MSOS for participation in past Commission proceedings should be sufficient to fund the PILC's involvement in this proceeding.

4. MTS also argued that CAC/MSOS has not participated in a responsible manner as MSOS encouraged its members to provide comments to the Commission without first instructing them of "the facts" and by not providing copies to MTS and interested parties. MTS submitted that CAC/MSOS' reference to these comments in argument "suggesting that they be given the weight afforded to tested evidence is highly inappropriate". MTS also argued that CAC/MSOS have not contributed to a better understanding of the issues before the Commission as they simply recycled old arguments previously rejected by the Commission with respect to the appropriateness of a shareholder entitlement.

5. In addition to the above, MTS argued that it should not be made responsible for more than 50% of CAC/MSOS' costs as the issues under consideration in this proceeding are of interest to all participants including consumer groups, and those groups should therefore be responsible for some of their costs. MTS submitted that if costs are awarded to CAC/MSOS, all parties to the proceeding should be made respondents. In the event that MTS is named as the sole respondent to such an award, MTS submitted that it should not be required to contribute to any costs awarded to other regional consumer groups whose focus was on telephone companies other than MTS.

6. The Public Interest Advocacy Centre (PIAC) filed comments in support of CAC/MSOS' application on 11 December 1997. Among other things, PIAC submitted that MTS' arguments with respect to financial entitlement are frivolous and vexatious, and objected to MTS' argument that consumer groups should bear a portion of their costs.

7. In its reply dated 5 January 1998, CAC/MSOS also submitted that MTS' argument regarding financial entitlement is an abuse of process. CAC/MSOS noted that both of its constituent groups are charitable organizations, and have regularly been awarded costs by the Commission and other regulatory bodies on the basis that they lack sufficient resources to present a case without an award of costs. CAC/MSOS also submitted that the issue of entitlement to costs raised by MTS has been settled by the Supreme Court of Canada and the Commission, and stated that no government funding has been allocated to the PILC for the purpose of participating in this proceeding.

8. With respect to MTS' submission that it had not participated in a responsible manner, CAC/MSOS noted paragraph 3 of PN 97-11 which provided for comments from the general public. As there was no provision in that paragraph mandating that all parties must be served with all such submissions, CAC/MSOS submitted that they did not violate any Commission procedures. CAC/MSOS submitted that consumer organizations should not be penalized for encouraging public participation. With respect to MTS' argument that CAC/MSOS did not contribute to a better understanding of the issues, CAC/MSOS summarized their evidence and submissions on the issue of the appropriateness of a shareholder entitlement and submitted that they had used their resources in a manner that best assisted the understanding of the Commission.

9. Following CAC/MSOS' reply, MTS filed an additional submission on 23 December 1997. CAC/MSOS objected to this submission on the grounds that it was filed out of process and, in any event, did not adduce any additional arguments. The Commission agrees with CAC/MSOS that the MTS submission of 23 December 1997 was filed out of process, and accordingly has not considered it in reaching its determination in respect of this matter.

COMMISSION DETERMINATION

10. The Commission notes that MTS' argument concerning financial entitlement was considered and rejected as recently as six months ago in Taxation Order CRTC 97-26, In re: Price Cap Regulation and Related Issues, 10 July 1997 (Taxation Order 97-26). In that Order, the Taxing Officer noted that the Supreme Court of Canada in Bell Canada v. Consumers' Association of Canada et al., [1986] 1 S.C.R. 190 concluded that the Commission's discretion to award costs included the right to award costs where no out-of-pocket expense has occurred. The Commission has consistently awarded costs to parties represented by public interest counsel even where there is no evidence that the costs incurred were expended directly by the party involved. In light of the above, the Commission considers that MTS' first argument is not valid.

11. MTS' argument concerning funds received from external sources was also considered and rejected in Taxation Order 97-26. The Commission has consistently stated that double recovery of funds expended in respect of a proceeding will not be permitted; if funds from government or other sources are earmarked towards a particular proceeding, the amount of that funding will be deducted from any Commission cost award. However, in this case, as in Taxation Order 97-26, the PILC has indicated that no government or other money has been allocated to it for the purpose of participating in this or other Commission proceedings.

12. The Commission also disagrees that CAC/MSOS has not participated in a responsible manner. The Commission notes, in this regard, that CAC/MSOS participated in each step of the process, respected all filing deadlines, and limited their participation to those issues which were of the most relevance to their constituency. As noted by CAC/MSOS, PN 97-11 required only that the comments in question be filed with the Commission. In light of this, the Commission considers that CAC/MSOS have satisfied this branch of the test, and cannot be said to have participated in an irresponsible manner.

13. Finally, with respect to MTS' third point, the Commission considers, for example, that the evidence and submissions of CAC/MSOS on the issue of shareholder entitlement contributed to a better understanding of the issues by the Commission. The Commission notes, in
this regard, that CAC/MSOS were the only parties to provide substantive comments opposing MTS' position on shareholder entitlement.

14. In light of the above, the Commission considers that CAC/MSOS have satisfied the criteria for an award of costs set out in subsection 44(1) of the Rules, and accordingly should be awarded costs.

15. Given that the Stentor member companies will derive the principal benefit of price cap regulation, and the fact that this proceeding was akin to a rate case for each federally regulated Stentor member company, the Commission is of the view generally that the Stentor member companies should be responsible for any costs awarded. However, as CAC/MSOS' participation was confined to issues raised by MTS' application, the Commission considers that MTS should be named as the sole respondent to the application. In light of the above, the Commission is also of the view that it would not be appropriate to limit MTS' responsibility for costs to no more than 50% as suggested by MTS.

DIRECTION AS TO COSTS

16. The application of CAC/MSOS for an award of costs in respect of this proceeding is approved.

17. Costs awarded herein shall be subject to taxation in accordance with the Rules.

18. Costs awarded herein shall be payable to CAC/MSOS by MTS.

19. Costs awarded herein shall be taxed by Geoff Batstone.

20. CAC/MSOS shall, within 30 days of this Order, submit a Bill of Costs and an Affidavit of Disbursements directly to the Taxing Officer, serving a copy on MTS.

21. MTS may, within two weeks of receiving those documents, file comments directly with the Taxing Officer with respect to the costs claimed, serving a copy on CAC/MSOS.

22. CAC/MSOS may, within two weeks of receiving MTS' comments, file a reply directly with the Taxing Officer, serving a copy on MTS.

23. Documents to be filed or served must be actually received, not merely sent, by the dates indicated.

Laura M. Talbot-Allan
Secretary General

This document is available in alternative format upon request.

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