ARCHIVED - Telecom Costs Order CRTC 2002-15

Telecom Costs Order CRTC 2002-15

Ottawa, 22 October 2002

Public Interest Advocacy Centre, the National Anti-Poverty Organization and Action Réseau Consommateur applications for costs - Order CRTC 2000-393

Reference: 8638-C12-46/01, 4754-205 and 4754-206

1.

By letter dated 1 March 2002, the Public Interest Advocacy Centre and the National Anti-Poverty Organization (PIAC/NAPO) applied for costs with respect to their participation to date in the Bill Management Tools and Access to Telephone Service Committee (the BMT Committee). The BMT Committee was struck pursuant to Commission modifies reporting requirements for affordability, Order CRTC 2000-393, 10 May 2000 (Order 2000-393).

2.

By letter dated 18 March 2002, Action Réseau Consommateur (ARC) also applied for an award of costs to cover its participation to date in the BMT Committee.

Position of the parties

3.

PIAC/NAPO and ARC (the Applicants) 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).

4.

The Applicants specifically submitted that their respective organizations represent a significant body of telephone subscribers who will be affected by the outcome of the BMT Committee's deliberations. They also submitted that they had participated in a responsible manner in the BMT Committee's work to date, and that their input had contributed to a better understanding of the issues.

5.

PIAC/NAPO requested that their costs be fixed as part of the cost award at $7,177.13. PIAC/NAPO submitted a bill of costs with their application, claiming a total amount of $5,977.13 in fees for their legal counsel and a total of $1,200.00 for their in-house analyst. PIAC/NAPO's claim included the Federal Goods and Services Tax (GST) on fees less the rebate to which PIAC/NAPO is entitled in connection with GST.

6.

ARC requested that its costs be fixed as part of the cost award at $1,202.48. ARC also submitted a bill of costs with its application, claiming a total amount of $1,085.71 in fees for its in-house analyst and a total of $116.77 in disbursements.

7.

PIAC/NAPO submitted that the appropriate respondents to their costs application were Bell Canada, Aliant Telecom Inc. (Aliant Telecom), MTS Communications Inc. (MTS), Saskatchewan Telecommunications (SaskTel), TELUS Communications Inc. (TCI), TELUS Communications (Québec) Inc., Télébec ltée (now Société en commandite Télébec), Northern Telephone Limited (now Northern Telephone Limited Partnership), Ontario Telecommunications Association and Northwestel Inc.

8.

PIAC/NAPO suggested that the responsibility for payment of costs should be divided among the respondents on the basis of their gross revenues or another similar factor.

9.

ARC did not suggest any respondents to its costs application.

10.

By letter dated 18 March 2002, Bell Canada, Aliant Telecom, SaskTel and MTS, collectively responded to PIAC/NAPO's application.

11.

By letter dated 4 April 2002, Bell Canada, Aliant Telecom and SaskTel (the Companies) collectively responded to ARC's application.

12.

Both letters noted that PIAC/NAPO and ARC had participated in the BMT Committee's work in a responsible manner. The Companies and MTS, however, raised the same objections with respect to both applications.

13.

The first objection raised by the Companies and MTS related to the Applicants' entitlement to a costs award. The Companies and MTS submitted that participation in the BMT Committee did not qualify for an award of costs under section 56 of the Telecommunications Act (the Act), as the BMT Committee's deliberations did not take place before the Commission and did not relate to any ongoing proceeding before the Commission. In their view, the voluntary and consensual nature of the BMT Committee's activities have little in common with the quasi-judicial nature of a proceeding. The Companies and MTS also stated that the BMT Committee's activities can be distinguished from follow-up activities that are mandated in Commission orders in that the participation in these follow-up activities is usually mandatory and generally requires parties to report back to the Commission. The Companies and MTS submitted that, in light of the definition of the term "proceeding" set out in the Rules, the costs arising from participation in the BMT Committee were not costs of, or incidental to, a proceeding before the Commission.

14.

In response, the Applicants argued that the BMT Committee's work clearly falls within the criteria for an award of costs as it is a proceeding that was initiated by the Commission of its own motion in Order 2000-393. The Applicants submitted that the fact that the proceeding is not quasi-judicial and does not mandate participation by any party does not disqualify it from consideration for an award of costs under subsection 56. (1) of the Act. They noted that costs had been awarded for participation in similar activities in the past, notably involvement in CRTC Interconnection Steering Committee (CISC) working group deliberations, the work of which, they argued, is similar to that of the BMT Committee. In support of their argument, the Applicants referred to In re: Participation in the CRTC Interconnection Steering Committee (CISC), Telecom Costs Order CRTC 98-3, 29 January 1998, and In re: Participation in the CRTC Interconnection Steering Committee (CISC), Telecom Costs Order CRTC 99-2, 26 February 1999. The Applicants noted that the Companies and MTS did not object to the award of costs for participation in the proceedings referenced in those two orders.

15.

The Applicants also submitted that they had participated in the BMT Committee process on the understanding that they qualified for costs. They stated that their participation would have to be re-evaluated if costs were not available.

16.

The second objection by the Companies and MTS related to the hourly rates specified in the applications, which they considered excessive. While conceding that the hourly rates claimed were consistent with those suggested in the Legal Directorate's Guidelines for the Taxation of Costs (the Guidelines), the Companies and MTS argued that the rates set out in the Guidelines were clearly meant to apply to costs arising from a formal proceeding before the Commission, and to reflect the intellectual rigor and demands of such a proceeding. The Companies and MTS submitted that, in contrast, the BMT Committee process did not include formal submissions or interrogatories, that the deliberations were by consensus and that it had no power to make binding determinations affecting the interests of the parties. The Companies and MTS noted that, by way of analogy, litigation lawyers generally charged a higher hourly rate for courtroom litigation than for other work.

17.

In response, the Applicants argued that PIAC's counsel had received costs according to the fee scale set out in the Commission's Guidelines for participation in CISC working group deliberations, and that the Companies and MTS had not objected in those instances.

18.

The Applicants also submitted that if the Commission found that it was appropriate for lawyers to charge less for time spent in industry working groups than for time spent in hearings or other formal proceedings, the appropriate solution should be to revise the Guidelines and to increase the rates for these formal proceedings, not to lower the already sub-standard rates permitted in the Guidelines.

19.

The Applicants questioned whether the Companies and MTS compensated their own retained counsel at a lower rate when they worked on less formal Commission proceedings. The Applicants argued that there was no reason why counsel for consumer groups should be compensated at a lower rate for their participation in the BMT Committee if counsel retained by the Companies and MTS were not likewise compensated at a lower rate for their participation in that Committee.

20.

In addition, the Applicants submitted that, should the Commission see fit to alter the fee scale set out in its Guidelines so as to provide for different rates of compensation depending on the type of work, such revisions should first be subject to a public process.

Commission determination

21.

The Commission has assessed the Companies' and MTS' argument that participation in the BMT Committee does not qualify for an award of costs under section 56 of the Act because such costs are not of and incidental to a proceeding before the Commission as the term proceeding is defined in the Rules.

22.

The Commission's power to award costs stems from section 56 of the Act, which provides:

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.

23.

While the Act does not define the term "proceeding", section 2 of the Rules contains the following definition:

"proceeding" means any inquiry, complaint or other proceeding commenced by an application to the Commission or initiated by the Commission of its own motion by a public notice or order.

24.

The Commission is of the view that the BMT Committee's activities constitute a proceeding as defined by the Rules. The Commission notes that section 2 of the Rules expressly defines a proceeding to include any inquiry or proceeding initiated by the Commission of its own motion by an order, and considers the BMT Committee's work, initiated by Order 2000-393, to be such a proceeding.

25.

The Commission does not consider it relevant to a cost award under section 56 of the Act that a proceeding is voluntary and consensus-seeking, rather than quasi-judicial or adversarial, and finds that participation in the BMT Committee qualifies for an award of costs under section 56 of the Act.

26.

With respect to the second objection raised by the Companies and MTS, that the hourly rates claimed are excessive because the rates set out in the Guidelines were meant to apply to costs arising from a formal proceeding and reflect the "intellectual rigor" and demanding process of a formal proceeding, the Commission expects the same quality of work from participants in consensus-seeking proceedings as it would in more adversarial Commission proceedings. Moreover, the Commission considers that applying a lower hourly rate for consensus-seeking proceedings could discourage participation of consumer groups and others and thereby reduce the effectiveness of the Commission's less formal proceedings.

27.

The Commission also notes that other Costs Orders and Taxation Orders have applied the rates set out in the Guidelines for proceedings other than "formal proceedings" before the Commission. For example, costs associated with participation in activities of the CISC were fixed at amounts that incorporate hourly rates set out in the Guidelines in In re: Location of Demarcation Point for Inside Wire in Multi-Tenant Buildings and Associated Issues, Telecom Public Notice CRTC 98-35, Costs Order CRTC 2000-5, 31 January 2000.

28.

Accordingly, the Commission finds that the hourly rates claimed by the Applicants are appropriate.

29.

With regard to the criteria for an award of costs, the Commission considers that while subsection 44. (1) of the Rules applies specifically to cost awards in proceedings under Part III of the Rules, the criteria set out in that subsection are appropriate to apply generally in determining cost awards under section 56 of the Act.

30.

Subsection 44. (1) of the Rules provides as follows:

In any proceeding under this Part, the Commission may award costs to be paid by the regulated company to any intervener who

(a) has, or is representative of a group or class of subscribers that has, an interest in the outcome of the proceeding of such a nature that the intervener or group or class of subscribers will receive a benefit or suffer a detriment as a result of the order or decision resulting from the proceeding;

(b) has participated in a responsible way; and

(c) has contributed to a better understanding of the issues by the Commission.

31.

The Commission notes that the Companies and MTS acknowledged that the Applicants had participated in the BMT Committee's activities in a responsible manner. The Commission also considers that the Applicants' respective organizations represent a significant body of telephone subscribers who will be affected by the outcome of the BMT Committee's deliberations, and that the Applicants' input has contributed to a better understanding of the issues.

32.

Accordingly, the Commission finds that the Applicants meet the criteria for an award of costs under subsection 44. (1) of the Rules.

33.

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 New procedure for telecom costs awards, Telecom Public Notice CRTC 98-11, 15 May 1998.

34.

The Commission finds that the amounts claimed by the Applicants were reasonably and necessarily incurred and should be allowed.

35.

With respect to the issue of the appropriate respondents, the Commission notes that it has generally determined that the appropriate respondents to an award of costs are the parties who are affected by the issues and have participated actively in the proceeding.

36.

The Commission notes that it has recognized the fact that if too large a number of respondents to an award of costs are named, the applicant may have to collect small amounts from many respondents.

37.

Given the small size of the costs award in this case, the Commission finds that it would impose an unnecessary administrative burden on PIAC/NAPO and ARC to require the collection of small amounts from each of the telecommunications service providers who participated in the BMT Committee.

38.

In light of the small amounts claimed, the Commission is of the view that the appropriate respondents for costs in both applications are Bell Canada and TCI, in the following proportions:

Bell Canada

75%

TCI

25%

Direction as to costs

39.

The Commission approves the applications by the Applicants for an award of costs with respect to their participation in the BMT Committee proceeding from 2 April 2001 to 1 March 2002.

40.

Pursuant to subsection 56. (1) of the Act, the Commission fixes the costs to be paid to PIAC/NAPO at $7,177.13 and to ARC at $1,202.48.

41.

The Commission directs that the award of costs to the Applicants be paid forthwith by Bell Canada and TCI according to the proportions noted in paragraph 38.

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