ARCHIVED - Telecom Commission Letter - 8690-M59-200500844
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Letter Ottawa, 1 September 2005 By E-Mail Reference: 8690-M59-200500844 Applicant
MTS Allstream Inc. Respondent
City of Vancouver Re:Part VII application by MTS Allstream Inc. against the City of Vancouver - Access to municipal property in the City of Vancouver In this letter, the Commission provides guidelines as to what it considers reasonable terms and conditions of municipal access for MTS Allstream Inc. (MTS Allstream) in the City of Vancouver (Vancouver ). Specifically, the Commission considers it reasonable for MTS Allstream and Vancouver to negotiate conditions of access for a term of 15 years. The Commission also considers it reasonable that MTS Allstream have certainty of access to highways and other public places in Vancouver under an MAA of general application . The Commission notes that the principles of Ledcor /Vancouver - Construction, operation and maintenance of transmission lines in Vancouver , Decision CRTC 2001-23, 25 January 2001 , may be of assistance in MTS Allstream and Vancouver's negotiations of other terms and conditions. If there is no agreement between MTS Allstream and Vancouver within 60 days following the date of this letter, the Commission will be prepared to consider granting permission under subsection 43(4) of the Telecommunications Act , on an expedited basis, subject to any conditions which the Commission finds reasonable. The application 1. On 24 January 2005, MTS Allstream Inc. (MTS Allstream) filed a Part VII application with the Commission pursuant to sections 42, 43 and 61 of the Telecommunications Act (the Act), requesting that the Commission issue an order granting MTS Allstream permission to construct transmission lines on, over, under or along a highway or other public place within the City of Vancouver (Vancouver), subject to the conditions contained in a long-term, city-wide municipal access agreement (MAA) proposed by MTS Allstream, or to such other conditions as the Commission may determine. 2. MTS Allstream proposed a city-wide MAA (the Template MAA), which provided for a 10-year term, and was renewable for two additional 5-year terms at MTS Allstream's sole option. MTS Allstream noted that Vancouver currently offers only interim MAAs to MTS Allstream. 3. In its application, MTS Allstream also specified a number of terms and conditions of access to municipal property in Vancouver, included in Vancouver's interim MAAs, which it found unacceptable. Process 4. On 24 January 2005, MTS Allstream filed its application with the Commission. 5. On 24 February 2005, Vancouver filed comments on MTS Allstream's application. 6. On 7 March 2005, MTS Allstream filed reply comments. 7. On 8 April 2005, MTS Allstream filed further requests for relief with the Commission, including interim relief, related to the application. The request for interim relief was disposed of by Request by MTS Allstream Inc. for interim permission to construct transmission lines in Vancouver , Telecom Decision CRTC 2005-26, 27 April 2005. Relevant statutory provisions and regulatory background 8. Section 7 of the Act sets out a number of objectives for Canadian telecommunications policy . In particular subsections (a), (b), (c) and (f) have relevance to this application:
9. Sections 42, 43 and 44 of the Act set out a framework for construction of telecommunications facilities and disputes arising from any request by a carrier to construct facilities.
10. In Ledcor/Vancouver - Construction, operation and maintenance of transmission lines in Vancouver, Decision CRTC 2001-23, 25 January 2001 (Decision 2001-23), the Commission established principles (the Ledcor principles) that it anticipated would assist carriers and municipalities in negotiating MAAs, but which did not prescribe terms and conditions related to the future construction of transmission lines by any carrier. In Decision 2001-23, the Commission made a specific determination with respect to Ledcor Industries Limited's (Ledcor's) request for access to 18 street crossings in Vancouver. In addition, the Commission stated that Decision 2001-23 would not be a template for future MAA disputes, but should any other MAA issue arise and be brought before the Commission for resolution, it would be dealt with on a case-by-case basis. 11. Decision 2001-23 was upheld by the Federal Court of Appeal in Federation of Canadian Municipalities , [1] and the Supreme Court of Canada denied leave to appeal that judgement on 4 September 2003. [2] Federation of Canadian Municipalities held that subsection 43(4) of the Act gives the Commission broad discretion to fix conditions of access to implement the objectives of the Act contained in section 7. [3] Regarding the effect of Decision 2001-23 on the negotiation of MAAs between other parties, the Federal Court of Appeal recognized that "in the context of settling the dispute before it, the [Commission] elaborated a number of principles with a view to assisting carriers and municipalities in their future negotiations of terms and conditions of access" and that "these principles are therefore not binding on anyone and the Commission expressly refrained from adopting 'any particular model or agreement to serve as a starting point for discussions between municipalities and carriers'." [4] 12. In Terms and conditions of existing agreements for access to municipal rights-of-way , Telecom Decision CRTC 2003-82, 4 December 2003 (Decision 2003-82), the Commission stated that it would not bring all existing MAAs into the same framework established in Decision 2001-23. Historical background 13. On 1 March 1997, Vancouver and MetroNet Communications Group Inc. (MetroNet), a predecessor corporation to MTS Allstream, signed a contract that permitted MetroNet to construct, operate and maintain its network on, over and under all streets, lanes and other public property owned or leased by Vancouver under certain terms and conditions, for a period of 20 years. 14. On 25 April 2002, AT&T Canada, a predecessor corporation of MTS Allstream, terminated the MetroNet contract by letter, effective 31 October 2002. 15. After the termination of the city-wide MetroNet contract, Vancouver offered to enter into its standard city-wide, interim MAA with MTS Allstream to replace the terminated city-wide MetroNet contract. Vancouver also advised MTS Allstream that if it refused to sign Vancouver's standard city-wide, interim MAA but wanted to install new transmission lines, individual site-specific requests would have to be referred to Vancouver City Council for authority to enter into site-specific agreements. 16. Vancouver submitted that its desire to enter only into an interim MAA was motivated by two factors: 1) at the time of the termination of the MetroNet contract, the appeal of Decision 2001-23 was still pending; and 2) city staff were conducting a general review of Vancouver's method of providing access to its streets, including consideration of the enactment of a comprehensive by-law. In the meantime, Vancouver created a new standard interim, city-wide MAA for the medium term. Vancouver's review of its proposed by-law is still ongoing. 17. From 31 October 2002 to September 2004, MTS Allstream entered into a number of interim, site-specific agreements with Vancouver. Each request for access by MTS Allstream had to be approved by Vancouver's City Council, which required the scheduling of the request as an agenda item for a City Council meeting several weeks later. Once the City Council's approval was obtained, the site-specific, interim MAA was reviewed and signed by MTS Allstream. Construction could begin only upon the receipt of the signed MAA by Vancouver. 18. Since September 2004, when it requested access to several rights-of-way, MTS Allstream has attempted and failed in its request to re-open negotiations with Vancouver for a long-term city-wide MAA on terms acceptable to both parties. Positions of parties Do the circumstances of this application engage the Commission's jurisdiction? MTS Allstream 19. MTS Allstream filed its application pursuant to sections 42, 43 and 61 of the Act. MTS Allstream stated that where a Canadian carrier cannot, on terms acceptable to it, obtain the consent of a municipality to construct a transmission line, subsection 43(4) of the Act clearly provides that the carrier may apply to the Commission for permission to construct it. 20. MTS Allstream stated that it is unable to obtain Vancouver's consent to construction on terms acceptable to it. Vancouver 21. Vancouver argued that section 42 does not confer on the Commission the jurisdiction to grant the relief sought by MTS Allstream because the powers under section 42 are only engaged if the Commission has jurisdiction to grant the relief under some other provision of the Act. Vancouver also argued that section 61 only operates assuming that jurisdiction is conferred on the Commission to make a decision or order under some other provision of the Act. 22. Vancouver submitted that subsection 43(4) is a dispute resolution mechanism and subsection 43(4) jurisdiction is limited to resolving disputes, on a case by case basis, between a carrier or distribution undertaking and a municipality for access to a specific right-of-way for the purpose of constructing a specific transmission line. According to Vancouver, this specificity requirement is supported by the language of subsection 43(4), its context and its legislative history. 23. Vancouver pointed out that " transmission line " is singular in subsection 43(4) but plural in subsection 43(2). Vancouver submitted that subsection 43(2) confers a right on carriers to access rights-of-way for the purpose of constructing lines, whereas subsection 43(4) confers jurisdiction on the Commission to adjudicate a dispute regarding the construction of a specific transmission line. With respect to legislative history, Vancouver submitted that the Commission's powers in the predecessors to subsection 43(4) were limited to dealing with specific disputes between a carrier and a municipality with respect to access to specific streets to install specific transmission lines. Vancouver submitted that all of the predecessors to subsection 43(4) from 1903 to 1993 required the submission of a plan showing the location of the proposed transmission line. According to Vancouver, when this requirement was removed by the passage of the Act, Parliament was silent on whether it intended this amendment to affect the Commission's jurisdiction. Vancouver inferred from Parliament's silence that there was no intention to change the Commission's jurisdiction. Vancouver concluded, on this basis, that there must be a dispute regarding a crystallized plan for construction of a specific installation before the Commission's jurisdiction engages. 24. According to Vancouver, there were no outstanding specific access disputes between the parties, and there was currently no application from MTS Allstream requesting access to construct a transmission line. Vancouver submitted that the sole basis for MTS Allstream's application is that it has been unable to negotiate a long-term, city-wide MAA with Vancouver. Vancouver argued that the Commission has no jurisdiction to provide the relief that MTS Allstream seeks . MTS Allstream's reply 25. MTS Allstream agreed with Vancouver that subsection 43(4) is properly characterized as a dispute resolution mechanism, but did not agree that this precludes the Commission from intervening. According to MTS Allstream, the Commission can intervene because the conditions demanded by Vancouver are unacceptable to MTS Allstream. According to MTS Allstream, there is no implicit or explicit requirement in subsection 43(4) regarding the degree to which negotiations have progressed in order for jurisdiction under subsection 43(4) to be triggered. 26. MTS Allstream argued that Vancouver's support for attributing a specificity requirement to subsection 43(4) does not follow generally accepted principles of statutory interpretation. MTS Allstream argued that no weight should be given to the fact that "transmission line" is used in the singular, rather than the plural. According to MTS Allstream, the interpretive weight afforded to legislative history depends on the clarity of the information revealing legislative intent. MTS Allstream submitted, accordingly, that no weight should be given to the fact that Parliament was silent when it removed the requirement to submit construction plans with an application. MTS Allstream submitted that it does not follow from silence that Parliament did not intend to change the Commission 's jurisdiction through the amendment. Request for, and the Commission's jurisdiction to grant, a long-term, city-wide MAA MTS Allstream 27. MTS Allstream requested that the Commission set terms and conditions, which do not violate the Ledcor principles, for MTS Allstream to access highways and other public places in Vancouver to construct transmission facilities, for an effective term of 20 years. 28. MTS Allstream submitted that Vancouver's interim MAA contained many terms and conditions that were unacceptable to it and were inconsistent with the Ledcor principles. MTS Allstream submitted that, despite its wish to negotiate the terms of a new fixed term, city-wide agreement in good faith, Vancouver was refusing to enter into any fixed term or city-wide agreement. 29. MTS Allstream submitted that in order for new entrants to be competitive, they must be able to offer service to new customers that is equal to or better than that of the incumbent. MTS Allstream argued that it was typically only new entrants, such as MTS Allstream in Vancouver, that must build new facilities to serve new customers, which requires the consent of a municipality on a timely basis. MTS Allstream stated that, accordingly, its ability to fulfill the Commission's policy of facilities-based competition was adversely affected by unacceptable terms and conditions insisted on by municipalities. 30. MTS Allstream submitted that the lack of a long-term, city-wide agreement made it vulnerable to Vancouver's unreasonable demands if it needed timely access. MTS Allstream stated that on the occasions it had entered into interim, site-specific MAAs with Vancouver, it had done so in order to obtain Vancouver's consent in an expedient manner, to allow it to serve customers requiring service. MTS Allstream indicated that on those occasions it had signed the agreements notwithstanding the fact that certain terms and conditions of the agreement were not acceptable to it. MTS Allstream submitted that Vancouver was leveraging MTS Allstream's need for permission to serve specific customers from time to time for the improper purpose of extracting collateral benefits from MTS Allstream. 31. MTS Allstream submitted that entering a new site-specific agreement on every occasion that it needed rights-of-way to serve a specific customer was inefficient and impractical. MTS Allstream further submitted that any legitimate site-specific issues could be dealt with as part of the permitting process. 32. MTS Allstream noted the provision that Vancouver's interim agreement could be terminated on 180 days notice and argued that, because of that provision, the terms and conditions of the agreement might be replaced by other terms, such as the terms of a by-law that were unacceptable to MTS Allstream and/or inconsistent with the Ledcor principles. MTS Allstream submitted that carriers were entitled to the security of a fixed term, but Vancouver's interim MAA provided it with no security for its access. Vancouver 33. Vancouver expressed two concerns about the breadth of the order MTS Allstream sought. First, the order would give MTS Allstream the right to enter on, break up or otherwise breach the surface of all highways, streets, road allowances, lanes, bridges, tunnels, viaducts and all other ways open to the public in Vancouver. Second, the order would give MTS Allstream this right until 2025. In Vancouver's submission, the relief sought raised the fundamental issue of whether the Commission has the jurisdiction to determine the terms of a long-term, city-wide MAA and order Vancouver to enter into such an agreement. 34. Vancouver submitted that the Commission has no jurisdiction to prescribe the terms of a long-term, city-wide access agreement between a carrier and municipality and compel the municipality to enter into that agreement when the carrier and municipality are unable to negotiate the terms of such an agreement. 35. Vancouver argued that the plain language of subsection 43(4) requires that the Commission must consider the use and enjoyment of the property at issue by others. In Vancouver's view, this statutory duty is a condition precedent to the Commission's exercise of its power under subsection 43(4). Vancouver submitted that the Commission must consider the impact of construction on any use and enjoyment of the highway or other public place by others before it grants permission and determines conditions. Vancouver noted that this statutory duty cannot be delegated by the Commission. In Vancouver's view, in this case, it would be impossible for the Commission to evaluate the impact of constructing unspecified transmission lines on all highways or other public places in Vancouver over the next 20 years and to consider how the construction would affect the use and enjoyment of this property by others. 36. According to Vancouver, in contrast to sections 29 and 32 which regulate inter-carrier contractual relationships, section 43 is adjudicative, not regulatory, which is reflected in the fundamentally different language that appears in subsection 43(4), as compared with sections 29 and 32. In Vancouver's view, if Parliament had intended to give the Commission the ability to prescribe terms and conditions in MAAs, it would have used language in subsection 43(4) that resembled the language in sections 29 and 32. 37. Vancouver argued that it was doing what it informed the Commission it would do after Decision 2001-23; that is, using a standard city-wide, interim MAA for the medium term while Vancouver staff continued work with respect to a comprehensive by-law dealing with access to Vancouver streets by all utilities. Vancouver submitted that MTS Allstream had articulated no basis, other than mere speculation, for its concern with respect to Vancouver's proposed by-law dealing with access to Vancouver streets. 38. Vancouver stated that after the termination of the city-wide MetroNet contract it offered to enter into its standard interim, city-wide MAA with MTS Allstream. Vancouver also stated that it informed MTS Allstream that if it refused to sign the interim, city-wide MAA, each site-specific request would have to be referred to Vancouver's City Council for authority to enter into a site-specific agreement. 39. Vancouver submitted that the interim MAA was not terminable at will by Vancouver, but provided a mutual right of termination upon 180 days notice. Vancouver argued that the security for the carrier's access is protected by its right to apply to the Commission under subsection 43(4) of the Act, which is the same security a carrier would have at the end of a fixed-term MAA. 40. Vancouver argued that it was not denying Decision 2001-23. Vancouver stated that in many ways its interim MAA conformed to Decision 2001-23, although it was not absolutely consistent with it. Vancouver submitted that the Template MAA also was not absolutely consistent with Decision 2001-23. MTS Allstream's reply 41. MTS Allstream submitted that subsection 43(4) forms a sufficient basis for the Commission's jurisdiction to make the order requested and in no way restricts the Commission's jurisdiction in the manner advocated by Vancouver. According to MTS Allstream, the requested relief would still be in the nature of dispute resolution rather than regulation. 42. MTS Allstream argued that Vancouver's narrow interpretation of the Commission's powers under subsection 43(4) runs counter to the jurisprudence regarding enabling statutes and subsection 43(4). MTS Allstream cited Bell Canada v. Canada (Canadian Radio-Television and Telecommunications Commission) [5] for the proposition that courts must avoid sterilizing administrative tribunal powers through overly technical interpretations of enabling statutes. MTS Allstream also submitted that the Federal Court of Appeal's decision in Federation of Canadian Municipalities demonstrated this accepted approach and stands for the proposition that the Commission has wide discretion under subsection 43(4) to fix conditions of access to implement the objectives of the Act in section 7. 43. In MTS Allstream's view, it would sterilize the Commission's ability to exercise its broad discretion to determine conditions of access to implement the objectives of the Act contained in section 7 if the Commission were unable to grant permission on a long-term, city-wide basis. According to MTS Allstream, this would be an incorrect interpretation from a contextual perspective because it would lead to a situation in which the Commission was never permitted to establish the conditions of access on a going-forward basis. In MTS Allstream's view, this would make adjudication inefficient and ineffective, and it would potentially result in the proliferation of applications for specific facilities constructions, which would be an overwhelming burden on carriers, municipal authorities and the Commission. MTS Allstream submitted that this would be an untenable state of affairs, contrary to the public interest and a significant barrier to entry. 44. In MTS Allstream's view, the due regard statutory duty does not require the Commission to obtain and review evidence of the impact of specific construction in every case. MTS Allstream submitted that, instead, due regard is a relevant consideration for the Commission when weighing the public interest. MTS Allstream submitted that the Commission exercises due regard by ensuring that carriers follow municipal planning and permitting processes in respect of actual builds and that, by imposing such a requirement, the Commission is positively exercising its authority pursuant to subsection 43(4). 45. MTS Allstream argued that the comparison of sections 29 and 32 with subsection 43(4) does not provide any relevant insights. In MTS Allstream's view, it is not asking the Commission to regulate access to Vancouver's municipal property. MTS Allstream submitted that, instead, it is asking the Commission to grant permission to construct and to establish the conditions of that permission. 46. MTS Allstream submitted that Vancouver's failure to propose a comprehensive by-law on access by utilities to municipal streets, despite the fact that it informed the Commission of its intention to pass such a by-law as early as during the Decision 2001-23 proceeding, indicated that Vancouver was using the spectre of a by-law to ward off further regulatory intervention. MTS Allstream further submitted that Vancouver's constant refrain that it intended to pass a by-law was no answer to MTS Allstream's ongoing requirement for access to municipal rights-of-way on terms acceptable to it. Other terms and conditions MTS Allstream 47. MTS Allstream was of the view that while Decision 2001-23 is not binding, it should serve as a guide for carriers and municipalities in their negotiation of MAAs. MTS Allstream noted that Vancouver was the municipality subject to Decision 2001-23, and argued that a number of specific terms and conditions in Vancouver's interim MAA were inconsistent with Decision 2001-23. 48. MTS Allstream submitted that Vancouver's interim MAA did not contain any provisions guaranteeing Vancouver's non-interference with the operation of MTS Allstream's network in the case of the expiry of the agreement. MTS Allstream further submitted that the Commission had indicated in Decision 2001-23 that the possibility of such interference (e.g. requiring the carrier to cease operations or remove its facilities) was an important consideration. MTS Allstream argued, therefore, that a provision guaranteeing such non-interference should be included in Vancouver's MAA. 49. MTS Allstream submitted that Vancouver's interim MAA created uncertainty and the potential for abuse, since the specific costs (new work up-front costs, restoration costs) of a build were unidentified. MTS Allstream submitted that new work up-front costs, according to Vancouver's interim MAA, consisted of all of the up-front direct causal costs incurred by Vancouver, including the cost of plan reviews and inspections, lost parking meter revenue, traffic detour, disruption signage and public notification costs, and administrative costs, but not restoration costs. MTS Allstream submitted that Vancouver had taken an ad hoc approach to establishing the plan approval and inspection fees under its interim MAA, and that MTS Allstream was required to sign the interim MAA before it was informed by Vancouver what Vancouver was charging for these fees. MTS Allstream submitted that Vancouver informed it of those fees at such a late point in the process that it had no other option but to pay those fees without protest. MTS Allstream argued that those fees have been significant and out of proportion to what were likely to be Vancouver's actual causal costs. 50. MTS Allstream also argued that the loading charge on plan approval and inspection fees should be modified to 15 percent, as suggested in Decision 2001-23, instead of 20 percent. MTS Allstream submitted that the Template MAA captured the cost structure suggested in Decision 2001-23, and stated that if there were additional causal costs not already captured by the terms of the Template MAA, Vancouver must identify those to MTS Allstream. 51. MTS Allstream submitted that it was unacceptable that Vancouver's interim MAA did not provide MTS Allstream with the option of restoring service corridors itself, as was suggested in Decision 2001-23, with the proviso that the work meet reasonable standards set by the municipality as to time and quality 52. MTS Allstream stated that Vancouver's interim MAA stipulated that MTS Allstream was to provide Vancouver with detailed information prior to MTS Allstream assigning the MAA, and further stipulated that MTS Allstream remained fully bound by the MAA for a period of time following any assignment of the MAA. MTS Allstream submitted that these conditions were onerous and went beyond what was required to protect Vancouver. MTS Allstream further submitted that these conditions were inconsistent with Decision 2001-23. 53. MTS Allstream was of the view that the liability provisions of Vancouver's interim MAA were one-sided, unacceptable, and inconsistent with Decision 2001-23. MTS Allstream stated that the Commission suggested in Decision 2001-23 that it would be appropriate to include balanced liability/indemnity provisions in an MAA or allow the provincial principles of liability for negligence to apply. MTS Allstream noted that Decision 2001-23 states that there was no reason to object to the inclusion of provisions that exclude damages for consequential and economic losses. Vancouver 54. Vancouver was of the view that the Ledcor principles were only guidelines and not rigid rules to be adhered to. Vancouver considered that, in some cases, the Ledcor principles would not assist carriers and municipalities to negotiate the terms of access agreements. Vancouver argued that a comparison of the MetroNet contract with its interim MAA would prove that MTS Allstream's characterization of Vancouver as attempting to live in a pre-Decision 2001-23 world is false. Vancouver further argued that the Template MAA was also inconsistent with Decision 2001-23 on a number of issues. 55 Vancouver submitted that there was no reality to MTS Allstream's concern about interference with the operation of MTS Allstream's network in case of the expiry or termination of the interim MAA. Vancouver stated that it had never done so in the past and would not do so in the future (except in the event of an emergency or a transmission line being abandoned) without the agreement of the carrier, an order from the Commission or a valid court order. 56. Vancouver argued that it was impossible to identify the specific causal costs of a build until it knew, as part of the permitting process, what work a carrier proposed to do. Vancouver stated that once the permitting process was under way Vancouver could provide, and had provided, MTS Allstream with a cost estimate, including the estimate calculations. With respect to street restoration costs, Vancouver stated that it had filed a copy of its current flat rate price list applicable to all street restorations. 57. Vancouver argued that the Template MAA limited Vancouver's recovery of causal costs to a plan approval flat fee and the usual permit fees, whereas Decision 2001-23 allowed Vancouver to recover all its causal costs. Vancouver submitted that, historically, a 20 percent loading charge was the standard percentage figure used by Vancouver. Vancouver also submitted that although various direct causal costs incurred by Vancouver were difficult to calculate, they were very real costs to Vancouver, and a 15 percent loading charge on what was usually a small base number for plan approval and inspection fees, often only a matter of a few hundred dollars or even less, did not recover these costs. Vancouver stated that the difference between a 15 percent and 20 percent loading factor on plan approval and inspection fees would usually be so trivial as to make little difference either to a carrier or Vancouver. 58. Vancouver argued that the Template MAA would result in Vancouver being responsible for all costs associated with the relocation of cables, wires, and other facilities owned by third parties and attached to MTS Allstream's support structures, since third parties would not be bound by its terms. Vancouver submitted that such a provision was unacceptable and inconsistent with Decision 2001-23. 59. Vancouver argued that significant and long-term liability issues, such as " trip and fall " cases for which Vancouver was sued scores of times a year, would arise from allowing MTS Allstream the option of restoring service corridors itself. Vancouver submitted that if a carrier was allowed to perform street restoration, a number of additional steps with associated causal costs would be necessary to adequately protect Vancouver. Vancouver submitted that these steps would include a review of specified materials/mix design to be used; inspection, testing, and certification of backfill; inspection, testing and certification of pavement; ongoing inspection of the restored pavement; and a tracking system to keep records of all restored pavements. Vancouver also submitted that a much broader indemnity than that contemplated in Decision 2001-23 would be required if MTS Allstream was to restore service corridors itself. 60. Vancouver stated that the liability provisions in its interim MAA differed significantly from those in the agreement at issue in the Decision 2001-23 proceeding, since Vancouver's current interim MAA provides that the limitation of Vancouver's liability does not extend to the negligence or wilful misconduct of Vancouver. 61. Vancouver stated that the Template MAA allowed Vancouver to remove obsolete or abandoned equipment only if MTS Allstream notified Vancouver that it had ceased to use it, and that Vancouver, therefore, had no contractual right to remove the equipment. Vancouver submitted that these provisions ran counter to the Commission's statement in Decision 2001-23 that carriers do not have an unqualified right to enter on and break up any highway or other public place for the purpose of constructing, maintaining or operating their transmission lines. 62. Vancouver submitted that Decision 2001-23 required that a carrier obtain Vancouver's consent whenever its work involved disruption (e.g. traffic disruption), while the Template MAA only provided that it would comply with notification procedures, rather than obtain Vancouver's consent. Vancouver further stated that the Template MAA limited Vancouver's consent to authorization of the alignment and not to the work itself. 63. Vancouver argued that it had the right to be fully secured with respect to work done by carriers on Vancouver streets. Vancouver submitted that, in the past, it had been unable to collect certain amounts owed to Vancouver by carriers that had sought protection under provincial companies' creditors' arrangement legislation. Vancouver argued that the Template MAA was inconsistent with Decision 2001-23, given that it provided for security in an amount no greater than 50 percent of the value of the work. 64. Vancouver stated that, under the provisions of the Template MAA, it is contractually bound to indemnify MTS Allstream with respect to all claims arising from the presence of any hazardous substances in, on, under, over, along and across the service corridors, for a period ending five years after the termination of the agreement, whether or not it is in any way at fault with respect to these hazardous substances in Vancouver streets. Vancouver submitted that hazardous substances usually migrate under the streets as a result of contamination from storage tanks in gasoline service stations. Vancouver submitted that those provisions were unfair to Vancouver and inconsistent with Decision 2001-23. MTS Allstream's reply 65. MTS Allstream argued that Decision 2001-23 did not require that a municipality be given a contractual right to remove a carrier's obsolete or abandoned equipment, and that it was wholly consistent with Decision 2001-23 for a MAA to ensure that a municipality did not interfere with the operation of a carrier's network. 66. MTS Allstream stated that it failed to comprehend Vancouver's complaint that the consent provided for in the Template MAA was insufficient and did not apply to the work itself. MTS Allstream submitted that, in addition to the general consent to engage in work provided for in section 1 of the Template MAA, under section 2 MTS Allstream must obtain Vancouver's further consent, from a municipal official designated by Vancouver, in relation to a specific alignment before it may excavate, break up or otherwise breach the surface of any service corridor or engage in any other work therein. MTS Allstream submitted that, together, both these sections more than adequately addressed MTS Allstream's obligation to obtain Vancouver's consent where its activities would entail disruption to the highway or other public place. 67. MTS Allstream stated that security of 50 percent of the value of the work was an assurance that construction work would be completed satisfactorily, and was therefore consistent with Decision 2001-23. MTS Allstream noted that section 6 of the Template MAA would further allow Vancouver to effect repairs and charge all reasonable costs for such repairs to MTS Allstream in the event that the service corridor was not repaired and restored to the reasonable satisfaction of Vancouver. 68. MTS Allstream argued that the provisions in its Template MAA relating to environmental indemnity were, in fact, an appropriate balancing of the risks associated with environmental responsibility. MTS Allstream stated that under the Template MAA, MTS Allstream would assume environmental liability relating to its activities, while Vancouver would indemnify MTS Allstream where the environmental concern was not attributable to MTS Allstream. MTS Allstream argued that this was consistent with the Commission's statement in Decision 2001-23 that liability and indemnity provisions should be appropriately balanced. Commission's analysis and guidelines 69. The Commission has consistently identified access to municipal rights-of-way as a barrier to entry and to local competition. In Decision 2003-82, the Commission noted the following:
70. In the same Decision, the Commission considered:
71. In Decision 2001-23, the Commission noted the following:
72. In Provision of telecommunications services to customers in multi-dwelling units , Telecom Decision CRTC 2003-45, 30 June 2003, the Commission determined:
73. Section 7 of the Act provides that the objectives of Canadian telecommunications policy are, among other things, to render reliable and affordable telecommunications services accessible to Canadians throughout Canada, facilitate the orderly development of telecommunications throughout Canada, and enhance the efficiency and competitiveness of Canadian telecommunications. 74. The Commission notes that MTS Allstream has attempted and failed to re-open negotiations for a long-term, city-wide agreement with Vancouver since September 2004. The Commission also notes that MTS Allstream entered into interim, site-specific arrangements prior to its attempts to re-open those negotiations. 75. The Commission notes that Vancouver's interim agreements provide for termination by either party, at any time, with 180 days notice. The Commission is of the view that carriers that can only secure interim MAAs are not only vulnerable because their access to a municipal right-of-way might be terminated by the municipality at any time with 180 days notice and not renegotiated, but also because the terms of such access may be changed upon negotiation of a new agreement to terms that are unacceptable to the carrier. The Commission notes that, if the terms of a proposed interim MAA are unacceptable, carriers may have to find alternate arrangements, which may also be unsatisfactory. The Commission considers that, regardless of whether or not it is ever exercised, the fact that the municipalities have the power to change the terms of access at short notice contributes to a carrier's commercial uncertainty. 76. Furthermore, the Commission is of the view that MTS Allstream's inability to secure long-term MAAs with Vancouver places it at a significant disadvantage with respect to carriers who enjoy more favourable access to rights-of-way. The Commission considers that if new entrants continue to secure only interim MAAs and these interim MAAs contain terms that are not acceptable to the carrier, then the Commission will receive numerous applications for access to municipal rights-of-way. 77. The Commission considers that MTS Allstream should be able to plan the orderly build out of its network with sufficient commercial certainty to recover its investments in its network. The Commission notes that the long-term planning of carriers necessarily takes into consideration depreciation of facilities. The Commission notes that, for the purpose of carriers' tariff filings for regulated services, it has approved accounting plant lives of 16 to 22 years for buried and/or underground fibre-optic and copper cabling. [6] 78. The Commission considers that interim access agreements do not provide sufficient commercial certainty to allow MTS Allstream to complete effective long-term planning. The Commission also considers that interim agreements may affect the ability of MTS Allstream to enter into long-term service agreements with customers. 79. In light of the above, t he Commission considers it reasonable for MTS Allstream to enter into a long-term access agreement with Vancouver. The Commission further considers that a 15-year term would be an appropriate timeframe for MTS Allstream to effectively plan for, build out and recover its investment in its network. 80. The Commission notes that MTS Allstream is seeking not only long-term access to municipal streets, but also city-wide access. The Commission also notes that Vancouver offers city-wide, interim agreements, but MTS Allstream chose to sign site-specific, interim agreements in the past due to outstanding issues relating to its existing agreements with Vancouver. 81. The Commission considers that access arrangements which are limited to specific sites or sets of sites may be problematic for a carrier. The Commission considers that it is extremely difficult for a carrier to predict in advance which sites, areas, or quantities of transmission lines it might need in order to serve its existing and potential customers. For example, because of competitive pressures, MTS Allstream may need to bid on an expedited basis for a contract to serve a large customer with branches or outlets throughout Vancouver. If it were to win the contract, MTS Allstream may not know what its financial exposure would be until it negotiated a site-specific agreement with Vancouver, thereby making it difficult to prepare an accurate bid and determine its long-term business planning. The Commission considers that, in such an instance, MTS Allstream would have minimal bargaining leverage with respect to Vancouver and may be forced to accept terms of access that are unacceptable to it in order to serve its customer. 82. The Commission is of the view, furthermore, that it is extremely difficult for a carrier to predict churn in its business plan. A carrier may predict that it requires access in one area, while, in fact, business eventually decreases in this area and increases in another area where the carrier does not have access. 83. The Commission notes that each request for site-specific access by MTS Allstream has required approval by Vancouver's City Council which, in some cases, has taken a month to secure. The Commission further notes that once the City Council's approval has been obtained, negotiations over terms that were not acceptable to MTS Allstream, if they occurred at all, were influenced by MTS Allstream's need to serve its customers without unreasonable delay. 84. The Commission considers that continuously negotiating site-specific MAAs or submitting applications to the Commission to resolve disputes impairs the efficient and orderly development of MTS Allstream's facilities to offer telecommunications services. 85. In light of the above, the Commission considers it reasonable that MTS Allstream have certainty of access to highways and other public places in Vancouver under an MAA of general application . The Commission notes that despite a general application MAA, MTS Allstream would still be required to comply with Vancouver's permitting process and by-law requirements to the extent that such process and requirements do not impose terms that are inconsistent with those of the MAA. It is through the permitting process that the parties can address site-specific issues not already dealt with by the MAA . 86. The Commission notes that Vancouver advised the Commission during the proceeding leading up to Decision 2001-23 of its intention to create a by-law to which all users of street space could refer . The Commission notes, however, that the Supreme Court upheld Decision 2001-23 on 4 September 2003, and Vancouver's review of municipal access still has not been completed, nor has a by-law been passed. The Commission considers that sufficient time has passed for Vancouver to be in the position to enter into a long-term, general application MAA with MTS Allstream. The Commission notes that MTS Allstream is a new entrant impacted by the commercial uncertainty created by delays in determining municipal access conditions, while Vancouver is not impacted, from a business standpoint, by such delays. In the Commission's opinion, therefore, it is desirable and reasonable to achieve commercial certainty with respect to MTS Allstream 's access to municipal rights-of-way in Vancouver as soon as possible. 87. The Commission notes that, if MTS Allstream and Vancouver are able to negotiate access in accordance with the guidelines above, Vancouver could apply to the Commission under section 44 of the Act in the event of any dispute respecting a specific transmission line. 88. The Commission considers that MTS Allstream and Vancouver may need to review their positions with respect to specific terms and conditions of access in light of the guidelines above. The Commission further considers that some of the issues (for example, loading charge, guarantee of non-interference, and the restoration of service corridors) may easily be resolved by MTS Allstream and Vancouver , since their positions are not that far apart. 89. The Commission notes that it intentionally did not prescribe terms and conditions in Decision 2001-23 for the future construction of transmission lines in Vancouver or elsewhere by any carrier. The Commission notes its statement in Decision 2001-23 that it was not persuaded that it was appropriate for it to adopt any particular model or standard agreement to serve as a starting point for discussions between municipalities and carriers. The Commission considers, however, that the Ledcor principles may assist MTS Allstream and Vancouver in their negotiations. Conclusion 90. The Commission recommends that MTS Allstream and Vancouver resume negotiations regarding municipal access. The Commission considers that it would be reasonable for MTS Allstream and Vancouver to negotiate conditions of access for a term of 15 years. The Commission also considers it reasonable that MTS Allstream have certainty of access to highways and other public places in Vancouver under an MAA of general application. Despite such a general application MAA, MTS Allstream would still be required to comply with Vancouver's permitting process and by-law requirements to the extent that such process and requirements do not impose terms that are inconsistent with those of the MAA. It is through the permitting process that the parties can address site-specific issues not already dealt with by the MAA. 91. M TS Allstream and Vancouver may use the Ledcor principles to assist in their negotiations of other specific conditions. If MTS Allstream and Vancouver are unable to reach agreement within 60 days of the date of this letter, either party may notify the Commission of the status of negotiations, and the Commission will provide for a short process of answer and reply. At the completion of this process, the Commission will be prepared to consider granting permission, on an expedited basis, under subsection 43(4) of the Act, subject to any conditions that the Commission considers reasonable.
Regards,
c.c. to [1] Federation of Canadian Municipalities v. AT&T Canada Corp. (C.A.) [2003] 3 F.C. 379 ( Federation of Canadian Municipalities ). [2] [2003] S.C.C.A. No. 97. [3] Federation of Canadian Municipalities, supra , paragraph 28. [4] Federation of Canadian Municipalities , supra, paragraph 21. [5] [1989] 1 S.C.R. 1722. [6] See Implementation of price cap regulation and related issues , Telecom Decision CRTC 98-2, 5 March 1998, Final Rates for Unbundled Local Network Components , Telecom Decision CRTC 98-22, 30 November 1998, Changes to the contribution regime , Decision CRTC 2000-745, 30 November 2000, and Competitor Digital Network Services, Telecom Decision CRTC 2005-6, 3 February 2005. Date Modified: 2005-09-01 |
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