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Telecom Costs Order CRTC 2003-7
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Ottawa, 4 September 2003
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Consumers' Association of Canada, the National Anti-Poverty Organization and l'Union des consommateurs - Application for Costs - CRTC to review revised loop and primary exchange service cost filings, Public Notice CRTC 2001-119 and Bell Canada Part VII Application re After tax weighted average cost of capital
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Reference: 8661-B20-01/01, 8652-B2-01/02 and 4754-215
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1.
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By letter dated 17 March 2003, the Commission received an application for costs from the Consumers' Association of Canada, the National Anti-Poverty Organization, and l'Union des consommateurs (the Consumer Groups) with respect to their participation in:
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a) CRTC to review revised loop and primary exchange service cost filings, Public Notice CRTC 2001-119, 30 November 2001 (Public Notice 2001-119); and
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b) a Part VII application by Bell Canada seeking a change to the Phase II costing methods to allow for the use of an after tax weighted average cost of capital (AT-WACC).
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2.
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The Commission received comments on this application from TELUS Communications Inc. (TELUS) on 19 March 2003 and from Bell Canada, Aliant Telecom Inc., MTS Communications Inc. and Saskatchewan Telecommunications (Bell Canada et al.) on 9 April 2003. The Commission did not receive any reply comments from the Consumer Groups.
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The application
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3.
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The Consumer Groups submitted that they had met the criteria set out in subsection 44(1) of the CRTC Telecommunications Rules of Procedure (the Rules) for an award of costs because they:
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a) represented a significant body of subscribers who would be affected by the outcome of the proceedings;
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b) participated responsibly throughout the proceedings; and
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c) contributed to a better understanding of the issues.
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4.
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Specifically, the Consumer Groups argued that incumbent local exchange carrier (ILEC) primary exchange service (PES) costs were relevant to the rates that consumers pay for local service. The Consumer Groups submitted that their interrogatories contributed to a better understanding of the issues surrounding the appropriate level of loop and PES costs for regulatory purposes.
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5.
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The Consumer Groups requested a total amount of $8,113.86, to cover their costs for both proceedings. The Consumer Groups also requested that the Commission fix the amount of costs to be paid pursuant to New procedure for Telecom costs awards, Telecom Public Notice CRTC 2002-5, 7 November 2002 (Public Notice 2002-5).
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6.
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The Consumer Groups submitted that, as the Public Notice 2001-119 proceeding had been terminated at the request of Bell Canada et al. and because it had been Bell Canada who had initiated the Part VII application with respect to AT-WACC, Bell Canada et al. were the appropriate respondents to any cost award.
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Answer
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7.
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In answer to the application, TELUS submitted that the costs claimed by the Consumer Groups were reasonable for the level of participation of the Consumer Groups in the proceeding.
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8.
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In answer to the application, Bell Canada et al. submitted that they did not object to either the Consumer Groups' claim for costs or to the amount of that claim. Bell Canada et al. did submit that the appropriate respondents and each respondent's share of any costs award made by the Commission should be determined by each respondent's interest in and participation in the proceedings.
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Commission analysis and determination
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9.
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The Commission finds that the Consumer Groups have satisfied the criteria for an award of costs set out in subsection 44(1) of the Rules. Specifically, the Commission finds that the Consumer Groups are representative of a group or class of subscribers that has an interest in the outcome of the proceeding, have participated in a responsible way, and have contributed to a better understanding of the issues by the Commission.
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10.
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The Commission finds that the amount claimed by the Consumer Groups was necessarily and reasonably incurred and should be allowed. The Commission further finds that this is an appropriate case in which to fix the costs and dispense with taxation, in accordance with Public Notice 2002-5.
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11.
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The Commission 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. However, the Commission has also tried to be sensitive to the fact that if too large a number of respondents are named, the applicant may have to try to collect small amounts from many respondents.
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12.
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While all Canadian carriers could potentially benefit from Commission decisions revising ILEC PES costs and/or allowing the use of AT-WACC for Phase II costs, the Commission is concerned that spreading a cost award of this small size amongst too many respondents would result in an unnecessary administrative burden on the Consumer Groups.
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13.
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The Commission is of the view that as the ILECs would be the primary beneficiaries of any Commission decision on these issues, and as it was Bell Canada et al. who requested that the Public Notice 2001-119 proceeding be terminated, Bell Canada et al. and TELUS are the appropriate respondents.
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14.
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The Commission has often divided responsibility for a cost award amongst respondents based on telecommunications revenues from the previous year. However, the Commission has also deviated from this approach to make collection of an award easier for applicants or to reflect situations where issues may be of greater importance to certain respondents. In this case, the Commission concludes that the responsibility for the payment of costs should be allocated as follows:
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Bell Canada et al.
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70%
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TELUS
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30%
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15.
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The Commission notes that Bell Canada filed submissions in these proceedings on behalf of Bell Canada et al. Consistent with its general approach, articulated in Action Réseau Consommateur, the Consumers' Association of Canada, Fédération des associations coopératives d'économie familiale and the National Anti-Poverty Organization application for costs - Public Notice CRTC 2001-60, Telecom Costs Order CRTC 2002-4, 24 April 2002, the Commission makes Bell Canada responsible for payment on behalf of Bell Canada et al. and leaves to Bell Canada et al. to determine the appropriate allocation of their portion of costs award among themselves.
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Direction as to costs
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16.
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The Commission approves the application by the Consumer Groups for costs with respect to their participation in the Public Notice 2001-119 proceeding and the AT-WACC proceeding.
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17.
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Pursuant to subsection 56(1) of the Telecommunications Act, the Commission fixes the costs to be paid to the Consumer Groups at $8,113.86.
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18.
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The Commission directs that the award of costs to the Consumer Groups be paid forthwith by Bell Canada on behalf of Bell Canada et al. and by TELUS, according to the proportions set out in paragraph 14.
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Secretary General
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This document is available in alternative format upon request and may also be examined at the following Internet site: http://www.crtc.gc.ca
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Date Modified: 2003-09-04