ARCHIVED - Telecom Taxation Order CRTC 2003-1

Telecom Taxation Order CRTC 2003-1

Ottawa, 16 May 2003

Costs awarded to Action Réseau Consommateur et al. - Public Notice CRTC 2001-36

Reference: 8678-C12-10/01 and 4768-102

Eve-Lyne H. Fecteau of Franklin Gertler, counsel for Action Réseau Consommateur, the Consumers' Association of Canada, the Fédération des associations coopératives d'économie familiale du Québec and the National Anti-Poverty Organization (ARC et al.)

Taxation of costs of ARC et al.

Taxation officer: Natalie Turmel

1.

This order constitutes the taxation of costs awarded to ARC et al. for the proceeding initiated by Implementation of price cap regulation for Québec-Téléphone and Télébec, Public Notice CRTC 2001-36, 13 March 2001 (proceeding 2001-36).

2.

Costs were awarded to ARC et al. in accordance with Application for costs by Action Réseau Consommateur, the Consumers' Association of Canada, the Fédération des associations coopératives d'économie familiale du Québec and the National Anti-Poverty Organization - Public Notice CRTC 2001-36, Telecom Costs Order CRTC 2002-12, 26 September 2002 (Costs Order 2002-12), in compliance with section 44 of the CRTC Telecommunications Rules of Procedure (the Rules).

3.

In Costs Order 2002-12, the Commission directed that the costs relating to the discussion on the return on equity (ROE) be paid entirely by TELUS Communications (Québec) Inc. (TELUS Québec) given that Société en commandite Télébec (Télébec) had not disputed the percentage proposed in proceeding 2001-36 and consequently, had not caused additional costs for ARC et al. in that regard. With respect to the other costs, the Commission directed that the costs awarded be paid by Télébec and TELUS Québec in the proportions of 40% and 60% respectively.

4.

In Costs Order 2002-12, the Commission fixed the costs incurred for transcripts at $1,082.31, to be paid immediately by the respondents. However, the Commission dismissed the request to fix translation costs, given that more information as to the nature of the documents translated had to be provided by ARC et al. during the taxation proceeding to justify those expenses.

5.

In a letter dated 10 October 2002, ARC et al. submitted a Bill of Costs claiming $37,708.02 for legal counsel fees, $14,000.00 for in-house analysts' fees, $24,503.00 in consultants' fees, and $11,427.15 for disbursements, for a total claim for costs of $87,637.17. The amount for disbursements included translation costs of $4,653.53. The claim by ARC et al. included federal Goods and Services Tax (GST) on fees and disbursements, minus the GST rebate to which ARC et al. are entitled, where applicable.

6.

Télébec filed its comments on 24 October 2002, and TELUS Québec on 28 October 2002. ARC et al. filed their response on 6 November 2002. In a letter dated 6 December 2002, the taxation officer requested additional information on the nature of the costs incurred by Ms. Tardif, in-house analyst. On 17 December 2002, ARC et al. provided the information requested.

Fees for legal counsel, analysts and consultants

Claim

7.

ARC et al. claimed legal counsel fees of $4,380.12, $2,716.87 and $30,611.03 for their counsel Mr. Janigan, Ms. Lawson and Ms. Fecteau respectively. Those amounts represent 18.4 hours for Mr. Janigan at an hourly rate of $230.00, 15 hours for Ms. Lawson at an hourly rate of $175.00 and 212.9 hours for Ms. Fecteau at an hourly rate of $125.00.

8.

ARC et al. claimed fees of $11,200.00, $2,000.00 and $800.00 for in-house analysts Mr. Sébastien, Ms. Tardif and Mr. Gouja respectively. Those amounts represent 28 days of work for Mr. Sébastien, 5 days for Ms. Tardif and 2 days for Mr. Gouja, at a daily rate of $400.00 for each of the three.

9.

ARC et al. claimed fees of $13,294.75, $10,486.00 and $722.25 for consultants Mr. Todd, Mr. Booth and Mr. Vennes, respectively. Those amounts represent 71 hours for Mr. Todd at an hourly rate of $175.00, 56 hours for Mr. Booth at an hourly rate of $175.00 and 7.5 hours for Mr. Vennes at an hourly rate of $90.00.

Comments by Télébec and TELUS Québec

10.

In its comments dated 24 October 2002, Télébec stated that, although the application by ARC et al. had merit, the amounts claimed seem high, given the expertise developed by ARC et al. in the proceeding initiated by Price cap review and related issues, Public Notice CRTC 2001-37, 13 March 2001 (proceeding 2001-37). Télébec also submitted that the costs claimed for Mr. Janigan and for Mr. Booth should be paid entirely by TELUS Québec in compliance with Costs Order 2002-12 given that they were incurred for the discussion regarding the ROE.

11.

In its comments dated 28 October 2002, TELUS Québec objected to the reimbursement of costs for Mr. Gouja and Mr. Vennes. According to TELUS Québec, those costs should be ineligible because ARC et al. did not provide information on the nature of the work performed by those two individuals. Furthermore, TELUS Québec expressed doubts regarding the eligibility of these costs given that the two individuals are energy specialists, not telecommunications specialists.

12.

TELUS Québec also submitted that the costs incurred by Ms. Tardif should be paid entirely by Télébec because her contribution in proceeding 2001-36 was limited to her experience with Télébec.

13.

Finally TELUS Québec identified an amount of $3,124.01 for costs incurred for the discussion regarding the ROE, i.e., $2,624.01 by Ms. Fecteau and $500.00 by Mr. Sébastien. TELUS Québec stated that the costs incurred by Mr. Janigan and Mr. Booth should be assigned as set out in Costs Order 2002-12, i.e., 40% for Télébec and 60% for TELUS Québec, given that their overall contribution went beyond the ROE and had more general application for the entire matter.

Response by ARC et al. to Télébec's comments

14.

In their reply comment filed on 6 November 2002, ARC et al. explained that Mr. Gouja contributed to the proceeding as an economist, specifically, checking data provided by the undertakings in support of the proposed rates. ARC et al. stated that this task is similar to one regulatory environment to another.

15.

ARC et al. also stated that Mr. Vennes was employed by the same firm as Mr. Todd. According to ARC et al., Mr. Vennes' expertise in economic regulation enable him to assist Mr. Todd, specifically since the language used by the parties involved in proceeding 2001-36 was French.

16.

With respect to Ms. Tardif, ARC et al. stated that they leave this matter to the Commission's discretion, noting that Ms. Tardif monitors Télébec's activities and that the activities of ARC et al. are generally national in scope.

17.

Finally, concerning the number of hours devoted to evidence and arguments regarding the ROE, ARC et al. stated that Ms. Fecteau listed a total of 4.5 hours, and not an amount of $2,624.01 as suggested by TELUS Québec.

18.

In response to the taxation officer's request for additional information on the nature of the costs incurred by Ms. Tardif, ARC et al. stated in a letter dated 17 December 2002 that Ms. Tardif participated for a total of 2 days, preparing and reviewing arguments in particular relating to the establishment of Télébec's initial requirements. Ms. Tardif also contacted certain municipalities that had expressed concern in the past about Télébec's rates to encourage them to provide the Commission with their comments on the undertaking's rate proposals in proceeding 2001-36. Finally, Ms. Tardif attended the hearing on 13 November 2001, i.e., the day on which ARC et al. and Télébec presented evidence.

Analysis

19.

I note that the rates claimed for Mr. Janigan and Ms. Lawson comply with the rates set out in Guidelines for the Taxation of Costs, 15 May 1998 (the Guidelines). I find that the rates and time claimed are appropriate.

20.

With respect to Ms. Fecteau, I note that she claimed 212.9 hours. That number may seem high at first glance, however, I note that even if Ms. Fecteau may have benefited from the advice of Mr. Janigan and Ms. Lawson in proceeding 2001-36, she was not directly involved, like the other two, in proceeding 2001-37. She was thus not able to develop the expertise that would have reduced her preparation time in proceeding 2001-36. Furthermore, I note that in Appeal of CRTC Taxation Orders 1993-3 and 1993-4, Telecom Letter Decision CRTC 94-7,18 May 1994, the Commission recognizes that certain factors are relevant to the establishment of an appropriate rate, such as prior experience of counsel in telecommunications and number of years since being called to the Bar. In this instance, Ms. Fecteau has already taken her lack of experience on major telecommunications matters into account, because she claimed an hourly rate of only $125.00, even though, according to the Guidelines and given her 3.5 years experience as counsel, she could have claimed $140.00 per hour. Under the circumstances, I find that the rate and time claimed are appropriate.

21.

With respect to Mr. Gouja, I am of the view that expertise in telecommunications was not required to check data provided by the undertakings in support of their rates. His knowledge in economics was sufficient to perform that task.

22.

I note that the rate claimed for the three analysts complies with the Guidelines for an applicant's in-house employees. I find that the rate and time claimed for Mr. Sébastien and Mr. Gouja are appropriate.

23.

With respect to Ms. Tardif, I believe that the time claimed is not appropriate. In view of the information provided by ARC et al. in their letter of 17 December 2002, I am of the view that the appropriate amount of time is not 5 days, but rather 3 days, i.e., the 2 days spent preparing and reviewing arguments regarding the establishment of Télébec's initial revenue requirements and the day of hearings attended by Ms. Tardif. I find that the fees claimed for contacting municipalities in Télébec territory to encourage them to intervene, i.e., 2 days for an amount of $800.00, are not necessary and reasonable within the meaning of section 44(6)b) of the Rules. That subsection does not include the recovery of costs incurred to convince other parties to intervene. As a result, the costs awarded for Ms. Tardif's fees are set at $1,200.00.

24.

With respect to Mr. Vennes, I find that because of his expertise in economic regulation, he was able to provide effective assistance to Mr. Todd in proceeding 2001-36.

25.

I note that the rates claimed for the consultants comply with those set out in the Guidelines. I find that the rates and time claimed are appropriate.

26.

Pursuant to Costs Order 2002-12, the costs relating to the ROE shall be entirely paid by TELUS Québec. I am of the view that the services of Mr. Janigan and Mr. Booth were required solely for the purposes of discussion of the ROE and that their contribution was limited to that aspect. I therefore consider that TELUS Québec is responsible for 100% of the fees of Mr. Janigan and Mr. Booth, i.e. $4,380.12 and $10,486.00 respectively, and for the fees of Ms. Fecteau and Mr. Sébastien relating to the ROE, i.e. 4.5 hours for a total of $604.69 and 1.25 days for a total of $500.00 respectively.

27.

With respect to the fees incurred by Ms. Tardif, I find that, based on the information provided by ARC et al. in the letter of 17 December 2002, only Télébec should pay for those fees. The work done by Ms. Tardif was limited to checking Télébec's initial revenue requirements and attending the public hearing the day it presented its position.

28.

The fees for Ms. Lawson, Mr. Gouja, Mr. Todd and Mr. Vennes, and the fees for Ms. Fecteau and Mr. Sébastien not relating to the ROE, are to be paid in the percentages set out in Costs Order 2002-12.

Disbursements

29.

ARC et al. claimed a total of $11,427.15 in disbursements. ARC et al. claimed $1,233.57 for Mr. Janigan and $1,340.14 for Mr. Booth. Those disbursements constitute $1,971.74 for air travel, $113.00 for intra-city transportation and taxis, $394.21 for hotel accommodation, $43.06 for meals, $13.03 for long-distance calls and $59.80 for postage and courier, less a rebate of $21.13.

30.

These claims for disbursements are appropriate. Given that these disbursements relate to the ROE discussion, they are to be paid entirely by TELUS Québec.

31.

ARC et al. claimed $272.00 in disbursements for Ms. Tardif, i.e., $151.00 for office expenses (photocopies, postage/courier, long-distance calls), $84.00 for inter-city travel, $15.00 for parking and $22.00 for meals.

32.

In my view, some office expenses relate to Ms. Tardif contacting certain municipalities to obtain municipal resolutions on Télébec's rate proposals in proceeding 2001-36. Given that 40% of the fees for Ms. Tardif were found to be unnecessary and unreasonable, I am reducing office expenses by the same amount. As a result, 40% of $151.00, i.e., $60.00 is to be deducted from the total disbursements claimed for Ms. Tardif, reducing the total disbursements claimed to $212.00. This claim for disbursements is appropriate and is to be paid entirely by Télébec pursuant to paragraph 27 above.

33.

In addition to the disbursements claimed for Mr. Janigan, Mr. Booth and Ms. Tardif, ARC et al. claimed $1,156.40 for air travel for their consultant Mr. Todd, costs of $87.86 and $62.51 for inter-city bus transportation by Mr. Sébastien and Ms. Fecteau respectively, and costs for intra-city transportation and taxis of $128.00 for Mr. Todd, $55.00 for Mr. Sébastien and $28.68 for Ms. Fecteau. For hotel costs incurred, ARC et al. claimed $116.46 for Mr. Todd, $348.80 for Mr. Sébastien and $314.01 for Ms. Fecteau. For meal costs incurred by Mr. Todd, Mr. Sébastien and Ms. Fecteau, ARC et al. claimed $336.00. ARC et al. also claimed $207.35 for long-distance calls (telephone and fax), and for in-house photocopies, $97.50 for Mr. Sébastien and $649.08 for Ms. Fecteau, as well as $58.20 for external photocopies for Mr. Sébastien and $251.49 for Ms. Fecteau. For postage and courier, ARC et al. claimed $6.78 for Mr. Sébastien and $3.10 for Ms. Fecteau. They also claimed $11.00 for legal research and $8.69 for other disbursements. Finally, ARC et al. claimed $4,654.53 for translation. Total disbursements for Mr. Todd, Mr. Sébastien and Ms. Fecteau are $8,581.44.

34.

These claims for disbursements are appropriate.

35.

With respect to the amount claimed for translation, I note that $150.58 (822 words x $0.16 + taxes) of that amount was paid for a translation relating to the ROE. As a result, that amount is to be paid entirely by TELUS Québec.

36.

ARC et al. did not identify the percentage of disbursements claimed for Mr. Sébastien and Ms. Fecteau that should be allocated to the ROE. As a result, I believe that the same percentage allocated to the ROE for the fees of Mr. Sébastien and Ms. Fecteau should be applied to their disbursements. I therefore find that 4.46% of Mr. Sébastien's disbursements, excluding the costs incurred for translation, and 2% of the disbursements for Ms. Fecteau are to be paid entirely by TELUS Québec, i.e., $37.18 and $32.41 respectively, for a total of $69.59.

Costs as taxed

37.

I hereby tax the fees and disbursements, inclusive of GST, where applicable, as follows:

Legal counsel fees

Mr. Janigan

$4,380.12

Ms. Lawson

$2,716.87

Ms. Fecteau

$30,611.03

Analysts' fees

Mr. Sébastien

$11,200.00

Ms. Tardif

$1,200.00

Mr. Gouja

$800.00

Consultants' fees

Mr. Todd

$13,294.75

Mr. Booth

$10,486.00

Mr. Vennes

$722.25

Total fees

$75,411.02

Total disbursements

$11,367.15

Total fees and disbursements

$86,778.17

38.

TELUS Québec shall pay the entire amount of fees and disbursements for Mr. Janigan and Mr. Booth and the percentage of fees and disbursements for Ms. Fecteau and Mr. Sébastien relating to the ROE, for a total of $15,970.81 in fees and $2,643.30 in disbursements. TELUS Québec shall also pay the costs of translation relating to the ROE, i.e., $150.58. The total amount is thus $18,764.69.

39.

Télébec shall pay the full amount of fees and disbursements for Ms. Tardif. The fees are $1,200.00 and disbursements are $212.00, for a total of $1,412.00.

40.

The balance, i.e., $66,601.48 shall be paid pursuant to Costs Order 2002-12, i.e., $26,640.59 by Télébec and $39,960.89 by TELUS Québec.

41.

The total costs to be paid to ARC et al. are $28,052.59 by Télébec and $58,725.58 by TELUS Québec. The respondents are directed to pay the costs as taxed forthwith.

Natalie Turmel

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