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Telecom Costs Order CRTC 2007-6
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Ottawa, 5 April 2007
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Application for costs by British Columbia Public Interest Advocacy Centre on behalf of the British Columbia Old Age Pensioners' Organization - Review of price cap framework, Telecom Public Notice CRTC 2006-5
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Reference: 8678-C12-200605553 and 4754-285
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1.
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By letter dated 7 December 2006, the British Columbia Public Interest Advocacy Centre (BCPIAC) applied for costs on behalf of the British Columbia Old Age Pensioners' Organization, Active Support Against Poverty, BC Coalition of People with Disabilities, Council of Senior Citizens' Organizations of BC, Federated Anti-Poverty Groups of BC, End Legislated Poverty, and the Tenants' Rights Action Coalition (BCOAPO et al.) with respect to their participation in the proceeding initiated by Review of price cap framework, Telecom Public Notice CRTC 2006-5, 9 May 2006 (the PN 2006-5 proceeding).
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2.
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By letter dated 21 December 2006, TELUS Communications Company (TCC) filed comments. By letter dated 22 December 2006, Bell Canada filed comments on behalf of Bell Aliant Regional Communications, Limited Partnership (Bell Aliant), Bell Canada, and Saskatchewan Telecommunications (SaskTel) (collectively, the Companies).
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3.
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BCPIAC did not file a reply to the comments submitted regarding the application.
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The application
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4.
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BCPIAC submitted that BCOAPO et al. had met the criteria for an award of costs set out in subsection 44(1) of the CRTC Telecommunications Rules of Procedure (the Rules) as they represent a group of subscribers that had an interest in the outcome of the PN 2006-5 proceeding, they had participated responsibly in the PN 2006-5 proceeding, and they had contributed to a better understanding of the issues by the Commission.
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5.
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BCPIAC filed a bill of costs with its application, claiming a total amount of $40,229.94 for legal fees and disbursements. BCPIAC named Bell Aliant, Bell Canada, MTS Allstream, SaskTel and TCC as appropriate costs respondents, but did not take any position as to the appropriate allocation of costs.
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6.
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In answer to the application, the Companies did not object to the claimant's entitlement to costs. However, the Companies took issue with the amount claimed, submitting that it was unjustified given the limited quantity and quality of their participation in the proceeding. Specifically, the Companies noted that BCOAPO et al.'s substantive written contributions were limited to a general 8-page argument, and that their participation in the oral hearing was very limited. The Companies contrasted the amount being claimed by BCPIACwith the lower amounts claimed by the Public Interest Law Centre (PILC) ($27,993.50) and l'Union des consommateurs (l'Union) ($15,899.62), both of whose participation was alleged to be more extensive and of higher quality. Accordingly, the Companies submitted that BCPIAC's claim should be reduced by 50% in light of their minimal participation.
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7.
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The Companies further submitted that the following parties should be named as costs respondents, on the basis of their participation in the proceeding and their significant interest in its outcome: the Companies; TCC; MTS Allstream Inc. (MTS Allstream); and Quebecor Média Inc. (Quebecor), Cogeco Cable Inc. (Cogeco), Rogers Communications Inc. (Rogers), Shaw Communications Inc. (Shaw), and EastLink (collectively, the competitors). The Companies noted that a costs order arising from the previous Price Cap review proceeding, Action Réseau Consommateur et al. application for costs - Price cap review proceeding, Telecom Costs Order CRTC 2002-2, 1 March 2002 (Costs Order 2002-2), named both competitors and incumbents as costs respondents because of their significant interest in the outcome.
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8.
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The Companies suggested that any costs ordered should be allocated among the parties in proportion to their respective share of telecommunications operating revenues (TORs).
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9.
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In answer to the application, TCC stated that it did not oppose the costs application and the amount claimed. TCC agreed with the Companies as to the appropriate costs respondents.
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Commission's analysis and determinations
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10.
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The Commission finds that BCPIAC has failed to satisfy the criteria for a full costs award set out in subsection 44(1) of the Rules. While the Commission considers that BCOAPO et al. represents a group or class of subscribers that has an interest in the outcome of the proceeding and participated in a responsible way, it is unable to conclude that their participation fully contributed to a better understanding of the issues by the Commission.
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11.
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The Commission notes that BCOAPO et al.was represented by BCPIAC legal counsel with 13 years of legal experience, who had been involved in several previous Commission proceedings, including a price cap proceeding. The Commission considers, however that BCPIAC's cross-examination appeared disorganized at times and did not add significantly to the overall debate. The Commission also considers that BCPIAC's written comment lacked a detailed treatment of the issues, and did not add significantly to the record of the proceeding.
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12.
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In summary, the Commission considers that BCPIAC's contribution falls short of that provided by other interveners to this proceeding who have been granted full cost awards, and concludes that BCPIACshould recover 75% of its costs.
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13.
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The Commission is of the view that this is an appropriate case in which to fix the costs and dispense with taxation in accordance with the streamlined procedure set out in New procedure for Telecom costs award, Telecom Public Notice CRTC 2002-5, 7 November 2002.
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14.
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The Commission notes that the rates claimed in respect of legal fees are in accordance with the rates set out in the Legal Directorate's Guidelines for the Taxation of Costs, revised as of 15 May 1998.
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15.
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The Commission notes that the incumbent local exchange carriers and several of their competitors were active participants in the proceeding and will be affected by the outcome, and considers that they should be costs respondents.
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16.
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The Commission disagrees with the Companies' and TCC's identification of EastLink as an appropriate cost respondent, given its limited participation in the proceeding. In this regard, the Commission notes that EastLink only submitted responses to interrogatory questions posed by the Commission. Accordingly, the Commission considers that EastLink is not an appropriate costs respondent in this proceeding.
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17.
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In light of the above, the Commission determines that this cost award shall be allocated in the following proportions, based on relative TORs:
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62.3%
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21.4%
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9.3%
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2.5%
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2.1%
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1.8%
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0.6%
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18.
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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 the Companies, and leaves it to the members of the Companies to determine the appropriate allocation of the costs among themselves.
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Direction as to costs
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20.
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The Commission approves in part the application by BCPIAC, on behalf of the BCOAPO et al., for an award of costs with respect to their participation in the PN 2006-5 proceeding.
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21.
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Pursuant to subsection 56(1) of the Telecommunications Act, the Commission fixes the costs to be paid to BCPIAC at 75% of the $40,229.94 claimed, or $30,172.46.
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22.
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The Commission directs that the award of costs to BCPIAC be paid forthwith by the costs respondents in the proportions indicated above in paragraph 17.
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23.
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The dissenting opinion of Commissioner Langford is attached.
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Secretary General
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This document is available in alternative format upon request, and may also be examined in PDF format or in HTML at the following Internet site: http://www.crtc.gc.ca
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Dissenting opinion of Commissioner Stuart Langford
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I have thoroughly reviewed the record of this, the third Price Cap Framework proceeding (Price Cap 3) and, based on that review, am unable to agree with the majority decision to reduce by 25% the costs claim submitted by the British Columbia Public Interest Advocacy Centre (BCPIAC).
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BCPIAC represents the interests of seven consumer groups, each vitally concerned with the impact which any pricing decision made by the Commission could have on those vulnerable elements of society that these groups in turn represent. The record clearly demonstrates that BCPIAC carefully evaluated the positions of other parties, participated through counsel in the cross-examination and oral argument phases during the six day long oral hearing stage of the Price Cap 3 proceeding, and filed final written argument after the oral hearing concluded.
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Hearing transcripts demonstrate that Patricia MacDonald, counsel for BCPIAC and the seven consumer groups it represented, actively participated by cross-examining TELUS representatives on October 11, 2006, cable company representatives on October 13, 2006 and expert witness Dr. Trevor Roycroft on October 16, 2006. The following is a sampling, though by no means an exhaustive list, of the issues Ms. MacDonald canvassed during cross-examination:
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- The essential nature of telephone service
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- Availability, affordability and substitutability of wireless service
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- The impact of "access fees" on subscriber rates
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- Voice over Internet Protocol (VoIP) services as substitutes for wireline service
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- The future of stand-alone basic service
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- The impact on vulnerable subscribers of various TELUS pricing plans
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- The notion of "targeted" subsidies for vulnerable subscribers
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- TELUS' "competitive presence" test
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- The competitiveness in TELUS territory
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- The accuracy of TELUS' response to CRTC Interrogatory 1202
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- The penetration rates achieved and projected by cable companies
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- The accuracy of Bell Canada's characterization of market conditions
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- The cable companies' positions on the need for price regulation in non-forborne markets
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- Analyses of U.S. regulatory regimes, notably in Ohio and Indiana
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- The likely results of allowing "pricing flexibility" in non-forborne markets
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On October 18, 2006, the final day of the oral phase of the Price Cap 3 proceeding, counsel for BCPIAC, Ms. MacDonald, as she was expected to do and as did counsel for most parties to this proceeding, outlined the position of the groups she represented in final oral argument. She did so in a succinct, orderly and thorough fashion leaving no doubt as to what her position was on the key issues.
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I have gone to such considerable lengths to detail BCPIAC's contributions to the Price Cap 3 proceedings to date, because, quite frankly, I am mystified by the majority's conclusions in paragraphs 10 and 11 of its decision. What about BCPIAC's contribution was lacking? What does the majority mean when it characterizes Ms. MacDonald's cross-examination as "disorganized"? I suspect that the majority's concerns are rooted in style rather than substance. That is unfortunate.
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The only complaint made against the costs application filed by BCPIAC was registered by Bell Canada on behalf of itself and two other like-minded and associated ILECs calling themselves, "the Companies". That complaint is summarized in paragraph 6 of the majority decision: "Specifically, the Companies noted that BCOAPO et al.'s substantive written contributions were limited to a general 8-page argument, and that their participation in the oral hearing was very limited." Comparisons are then made to the contributions made by two other consumer advocates, PILC and l'Union.
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I am unable to determine why document page counts are pertinent to the Companies' and, perhaps, the majority's evaluation of quality. Is Shakespeare's King Lear a stronger or weaker play than his Hamlet? Four hundred years of analysis and criticism have not put the question to rest, but to-date, no argument for or against either tragedy has focused on length.
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As for "participation in the oral hearing", I would note that PILC contributed not one word and the transcript reveals that l'Union never once exercised its right to cross-examine witnesses, contributing orally over six days only briefly in the final argument stage on October 18, 2006. Yet, the majority in ruling on their costs awards applications never questioned PILC or l'Union's entitlement to financial assistance, awarding each the full sum they claimed.
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One other aspect of this matter deserves examination. In this, the third Price Cap proceeding, the rules of the game as they applied to consumer groups were changed. In Price Caps 1 and 2 (see Public Notices PN 96-8 and PN 2001-37), so as to maximize the ability of interveners to make meaningful contributions to the Commission's understanding of the issues, participants like consumer groups were given the opportunity to review and question the proposals made by ILECs before filing their own evidence. That opportunity was denied interveners in this Price Cap 3 proceeding (see Public Notice 2006-5 and the Commission's decision letter of June 21, 2006, refusing the Consumer Groups' application to return to the previous rule).
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The result was that in this proceeding, consumer group advocates were forced to take a position and file their initial evidence without having any inkling of what case they were trying to meet. This handicap must have posed serious problems for consumer advocates. Perhaps it did leave Ms. MacDonald feeling slightly off balance. Certainly its impact on the Public Interest Advocacy Centre (PIAC), representing other consumer groups, was obvious. In the oral hearing, PIAC's representatives introduced a second or alternative proposition in an effort to provide the Commission with other options for protecting vulnerable subscribers.
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In conclusion, I reiterate my disagreement with the majority in this matter. Consumer advocates, those representing the average Canadian as well as the most vulnerable, participate in complicated proceedings such as Price Cap at a considerable disadvantage. They have limited or no funds. Typically, they have little or no access to expert advice. They face opposing parties, former monopolies such as Bell Canada and TELUS and well-heeled competitors that are able to invest enormous sums of money and seemingly countless person hours in preparation and performance. TELUS, for example, imported its lead counsel from London, England and bolstered its case with the evidence and testimony of not one but two internationally renowned expert witnesses.
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To put it mildly, it is not a fair fight. That is one reason, the chief reason, why costs awards are made available to needy parties. An application process has been put in place to ensure that claims are evaluated against established standards. The Companies' preoccupation with page counts and presentation styles in evaluating effective participation, is not, to the best of my knowledge reflected in the criteria generally relied upon in assessing merit. An applicant need establish only that he or she represents a group or class of subscribers that has an interest in the outcome of the proceeding, has participated in a responsible way and has contributed to a better understanding of the issues by the Commission.
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In my opinion, BCPIAC has met that three-part test and has earned the total sum applied for by way of costs. Through counsel, it filed more than adequate written evidence and argument, and played an active and informative role in cross-examining witnesses. It represented the seven groups of vulnerable consumers that retained it sensitively and reasonably effectively considering the handicaps it faced. To penalize BCPIAC, for the sort of nebulous reasons offered in paragraphs 10 and 11 of the majority decision, is in my view both harsh and counter-productive. We should be encouraging participation by all sectors of society. The majority decision will likely have quite the opposite effect.
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Date Modified: 2007-04-05
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