ARCHIVED - Telecom Costs Order CRTC 2002-11

Telecom Costs Order CRTC 2002-11

Ottawa, 25 September 2002

Action Réseau Consommateur, the Public Interest Advocacy Centre and the National Anti-Poverty Organization application for costs - Aliant Telecom Part VII Application on Late Payment Charges

Reference: 8622-A53-01/02 and 4754-207

By letter dated 23 April 2002, Action Réseau Consommateur, the Public Interest Advocacy Centre (PIAC) and the National Anti-Poverty Organization (ARC et al.), applied for costs with respect to their participation in the proceeding initiated by a Part VII Application by Aliant Telecom Inc. (Aliant Telecom) with respect to Late Payment Charges (LPC).

Position of the parties

ARC et al. 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), and requested that the costs be fixed pursuant to New procedure for telecom costs awards, Telecom Public Notice CRTC 98-11, 15 May 1998 (Public Notice 98-11).

ARC et al. submitted that the appropriate respondent to the costs application is Aliant Telecom.

ARC et al. filed a bill of costs of $1,337.86 with their application, claiming an amount of $1,237.86 in legal fees and $100.00 in analyst fees. These amounts represent 5.2 hours of work for Ms. Philippa Lawson at a rate of $230.00 per hour and ¼ day of work for Mr. Jean Sébastien at a rate of $400.00 per day.

By letter dated 2 May 2002, Aliant Telecom filed comments in response to ARC et al.'s application. Aliant Telecom alleged that there were errors in the calculation of costs by ARC et al. and questioned the appropriateness of ARC et al.'s claim for costs in this case.

With respect to the calculation of legal fees, Aliant Telecom submitted that the correct calculation for 5.2 hours of work at $230.00 per hour is $1,196.00 rather than $1,237.86. With respect to the calculation of in-house analyst fees, Aliant Telecom argued that they should total $93.33 rather than $100.00. In order to come to that amount, Aliant Telecom assumed that a 7½ hour day of work at an hourly rate of $53.33 for an analyst should total $93.33.

Aliant Telecom stated that they did not take issue with the claim by ARC et al. that they have met the criteria set out in section 44 of the Rules. Rather, Aliant Telecom took issue with the broader policy implications of extending the costs award criteria to this proceeding. Aliant Telecom submitted that the awarding of costs pursuant to section 44 of the Rules is generally set out in the context of Part III of the Rules, which deals with applications for general rate increases.

Aliant Telecom recognized that the Commission has in the past awarded costs with respect to proceedings falling outside of Part III of the Rules, but submitted that such awards were typically associated with major regulatory proceedings, such as those dealing with the price cap regulation, local competition, high cost serving areas and local pay telephone competition.

Aliant Telecom submitted that this application did not relate to a major proceeding but rather to Aliant Telecom's general business practices and to whether an item should be tariffed. Aliant Telecom expressed the concern that ARC et al.'s request might set a precedent for interest groups to seek costs for intervening in every filing of the company.

Aliant Telecom also submitted that the nature of ARC et al.'s intervention in this particular case arises from its general advocacy activities, and as such, its request for a costs award should be offset by funding from "other sources" of financial assistance pursuant to subsection 44(7) of the Rules which provides that the taxing officer shall take into account financial assistance from government or other source. Thus, Aliant Telecom further submitted that the general funding sources and operating budgets of ARC et al. would be captured by the wording of subsection 44(7) of the Rules in respect of financial assistance from other sources.

By letter dated 6 May 2002, ARC et al. filed reply comments. With respect to the alleged errors in the calculation of the legal fees, ARC et al. submitted that Aliant Telecom had failed to recognize the inclusion of the Federal Goods and Services Tax (GST) on Ms. Lawson's fees and disbursements less the rebate to which ARC et al. is entitled in connection with the GST. With respect to the billing method for the in-house analyst's fees, ARC et al. submitted that the normal method of billing for partial days under a per diem rate is to divide the per diem into quarters and bill accordingly.

In reply to Aliant Telecom's submission that costs should not be awarded because this proceeding was not a major proceeding, ARC et al. submitted that the company's Part VII application related to a policy issue of significance to end-customers, which if granted, would establish a precedent for all other telephone companies.

In response to Aliant Telecom's concern that an award of costs would lead interest groups to intervene in every application of the company, ARC et al. submitted that (1) this concern is appropriately dealt with through the test under section 44 of the Rules; (2) ARC et al. have no interest in intervening in the majority of ILEC's applications, and to do so would be unrealistic given its minimal resources; (3) the regulatory environment in which the Rules were originally drafted has changed dramatically, and it is recognized that in the new environment, costs awards should be made available for any type of public proceeding in which informed public participation is desirable. ARC et al. further submitted that in order to accomplish its purpose, the availability of costs should not depend on the number of issues raised, the number of companies involved or the procedural manner in which the issues have been raised. Rather, it should depend on whether the section 44 criteria for costs awards have been met.

In response to Aliant Telecom's submission that ARC et al.'s request should be offset by funding from "other sources" pursuant to subsection 44(7) of the Rules, ARC et al. stated that they have no funding from other sources for legal, analyst or other fees and expenses in Commission proceedings. ARC et al. submitted that PIAC represents these groups on an entirely unfunded basis in the expectation that it will be entirely reimbursed through a cost award.

Commission Determinations

The Commission notes that although the Rules establish a costs regime applicable to Part III applications, its power to award costs stems from section 56 of the Telecommunications Act (the Act), which reads as follows:

56(1) The Commission may award interim or final costs of and incidental to proceedings before it and may fix the amount of the costs or direct that the amount be taxed.

(2) The Commission may order by whom and to whom any costs are to be paid and by whom they are to be taxed and may establish a scale for the taxation of costs.

In the Commission's view, section 56 is broadly drafted and provides the Commission with a very wide discretion with respect to the awarding of costs.

Contrary to Aliant Telecom's submission, the Commission has not confined itself to Part III applications and major regulatory proceedings when awarding costs in the past. For example, the Commission has awarded costs in short and simple proceedings contemplated at Part II and VII of the Rules, such as Treatment of revenues derived from wireless terminal handsets, Telecom Cost Order CRTC 2002-1, 29 January 2002, In re: Telecom Order CRTC 99-607, Telecom Cost Order CRTC 99-7, 27 September 1999, Québec-Téléphone's business rate restructuring proposal, Cost Order CRTC 2001-10, 17 July 2001. The Commission is of the view that this proceeding raised important issues for consumers and that the Commission benefited from ARC et al.'s participation.

The Commission has consistently applied the criteria set out at section 44 of the Rules to costs applications related to proceedings other than under Part III of the Rules. The Commission finds that ARC et al. meet the criteria for an award of costs under section 44 of the Rules. The Commission finds that ARC et al.:

a) represent a significant body of subscribers who will be affected by the outcome of Aliant Telecom's application;

b) participated responsibly by providing comments in a timely fashion; and

c) contributed to a better understanding of the issues through their submissions with respect to the application.

The Commission is of the view that this is an appropriate case in which to dispense with taxation and fix the costs in accordance with the streamlined procedure set out in Public Notice 98-11.

With respect to the legal fees, the Commission notes that Ms. Lawson is entitled to a 50% rebate in connection with the GST and has indicated so on Form I - Summary of Legal Fees. The Commission further notes that the rate claimed is in accordance with the rate specified in the Commission's Legal Directorate's Guidelines for the Taxation of Costs (the Guidelines). The Commission accepts the rate and time claimed for Ms. Lawson as appropriate.

With respect to the calculation of in-house analyst fees at an hourly rate, rather than a quarterly rate, the Commission is of the view that ARC et al.'s calculation on a quarterly basis is acceptable. The Commission notes that the rate claimed is in accordance with the rate specified in the Guidelines. The Commission accepts the rate and time claimed for Mr. Sébastien as appropriate.

The Commission finds that the costs claimed by ARC et al. were reasonably and necessarily incurred, and that, hence, they should be allowed.

The Commission finds that the appropriate respondent to ARC et al.'s costs application is Aliant Telecom.

Direction as to costs

The Commission approves ARC et al.'s application for costs in this proceeding. Pursuant to subsection 56(1) of the Act, the Commission fixes the costs to be paid to ARC et al. at $1,337.86.

The Commission directs that the award of costs to ARC et al. be paid forthwith by Aliant Telecom.

Secretary General

This document is available in alternative format upon request and may also be examined at the following Internet site: http://www.crtc.gc.ca