Telecom Order CRTC 2017-95

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Ottawa, 11 April 2017

File numbers: 8663-C12-201503186 and 4754-534

Determination of costs award with respect to the participation of the Affordable Access Coalition in the proceeding leading to Telecom Regulatory Policy 2016-496


  1. By letter dated 30 June 2016, the Affordable Access Coalition (AAC)Footnote 1 applied for costs with respect to its participation in the proceeding leading to Telecom Regulatory Policy 2016-496, in which the Commission reviewed its policies regarding basic telecommunications services in Canada (the proceeding).
  2. The Commission received answers from Bell Canada;Footnote 2 Bragg Communications Incorporated, operating as Eastlink (Eastlink); MTS Inc. (MTS); and TELUS Communications Company (TCC), all dated 21 July 2016, as well as from Vaxination Informatique (Vaxination), dated 25 July 2016. The AAC filed a reply dated 29 July 2016.
  3. The AAC submitted that it had met the criteria for an award of costs set out in section 68 of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (the Rules of Procedure) because it represented a group or class of subscribers that had an interest in the outcome of the proceeding, it had assisted the Commission in developing a better understanding of the matters that were considered, and it had participated in a responsible way.
  4. In particular, the AAC submitted that it represented the largest group of public interest stakeholders, including consumers generally, as well as low- and moderate-income families, and senior citizens. The AAC stated that its member organizations (i) deployed the expertise of their staff and boards of directors to evaluate the interests of their respective members, (ii) obtained feedback regarding the matters that were considered in the proceeding from their respective individual members, (iii) shared information on their websites and in their communications forums, and (iv) commissioned public opinion research.
  5. The AAC submitted that it participated in the proceeding in a responsible way by providing (i) a distinct, user-focused, and public-interest-oriented perspective, (ii) concrete, practical proposals, including the development of two funding models by an expert witness, and (iii) clear and practical submissions, including responses to all interrogatories, in a prompt manner. The AAC stated that this participation assisted the Commission in better understanding the matters that were considered.
  6. The AAC requested that the Commission fix its costs at $455,089.49, consisting of $250,553.86 in legal fees, $2,702.50 in consultant fees, $175,788.52 in expert witness fees, and $26,044.61 in disbursements. The AAC’s claim included the Ontario Harmonized Sales Tax (HST) on fees less the rebate to which the AAC is entitled in connection with the HST. The AAC filed a bill of costs with its application.
  7. With respect to its legal fees, the AAC claimed 295.80 hours at the external rate of $290 per hour for senior legal counsel, 478.14 hours at the external rate of $206 per hour and 14 hours at the external rate of $165 per hour for junior legal counsel, 30.75 days at the in-house rate of $175 per day for two legal assistants, 23.5 days at the in-house rate of $600 per day for internal legal counsel, as well as 532.35 hours at the external rate of $70 per hour for two articling students.
  8. The AAC also claimed 5.75 days at the in-house rate of $470 per day for an in-house analyst, as well as 453.5 hours at the rate of $225 per hour for an expert witness.
  9. With respect to its disbursements, the AAC claimed photocopying and long distance telephone costs, travel and accommodation expenses for appearance at the hearing by two representatives from member organizations and their expert witness, and the costs of conducting two surveys for the hearing.
  10. The AAC submitted that all of the telecommunications service providers that participated in the proceeding are the appropriate parties to be required to pay any costs awarded by the Commission (the costs respondents).


  1. Bell Canada, Eastlink, MTS, and TCC argued that the amounts the AAC claimed for its participation in the proceeding are unprecedented, being significantly higher than past costs awards for similar proceedings and the costs claimed by other participants in the proceeding.
  2. Eastlink argued that the number of lawyers, experts, and other resources the AAC used, as well as the amounts claimed for its work, are disproportionate to its contribution to the proceeding, and that it was irresponsible of the AAC not to have better controlled its costs. Eastlink stated that this is especially true in the case of a large proceeding for which telecommunications service providers face costs applications from numerous interveners. Eastlink argued that awarding such a large costs claim would (i) set a dangerous precedent, (ii) provide little incentive for public interest participants to control their costs, and (iii) force smaller telecommunications service providers to seriously consider not participating in Commission proceedings to avoid paying significant costs awards.
  3. TCC argued that the AAC did not participate responsibly in the proceeding and that its costs were not reasonably incurred. In particular, TCC submitted that,
    • the status of one of the external legal counsel, Mr. John Lawford, was incorrectly characterized as “Private Practice” (and therefore eligible under the Commission’s Guidelines for the Assessment of Costs [the Guidelines] to apply the rate for external legal counsel), since Mr. Lawford reports to the Law Society of Upper Canada (the Law Society) as “Practising Law – Employed” (which would result in the application of the rate for in-house legal counsel according to the Guidelines) and acts as the Executive Director and General Counsel of the Public Interest Advocacy Centre (PIAC);
    • PIAC’s articling students were incorrectly characterized as external, based on the fact that their principal is an external legal counsel, even though they are employed by PIAC and are therefore in-house;
    • even if Mr. Lawford and the articling students are determined to be external, the AAC’s legal costs claim should be reduced since it reflects an unreasonable reliance on external (and therefore more expensive) legal resources instead of on PIAC’s in-house resources;
    • the time claimed for the AAC’s expert witness is excessive (based on the information filed, the expert witness appears to have spent an equivalent of seven hours on each interrogatory response, and eight hours per page of the expert report);
    • the time claimed for the junior external legal counsel is also excessive, with a disproportionate amount of time spent on administrative tasks, reviewing the file, and preparing for the hearing; and
    • the time claimed for one of the articling students is excessive with respect to reviewing the file and preparing for the hearing.
  4. As a result, TCC proposed that the AAC’s overall costs be reduced to $287,754.55.
  5. Bell Canada argued that the AAC did not participate in the proceeding responsibly and that its costs were not necessarily and reasonably incurred, since it relied too heavily on external resources rather than on more cost-effective and/or in-house resources. Bell Canada provided a breakdown of the tasks it argued that non-lawyer, junior, or in-house resources could have completed but that were assigned to senior external legal counsel. Bell Canada added that if the AAC hadn’t presumed that its costs would be recovered, it would have chosen a more cost-effective means of participation in the proceeding.
  6. Bell Canada submitted that the articling students occupy positions that are clearly advertised as in-house positions at PIAC, and for which PIAC receives funding from the Law Foundation of Ontario’s Public Interest Articling Fellowships program (the Fellowship program). Bell Canada indicated that without evidence that the articling students are employed directly by senior external legal counsel, their time should be claimed at in-house rates only. Bell Canada added that if the articling students are truly external resources, the costs claimed for their work were not necessarily or reasonably incurred, since these costs are significantly higher than the salaries they received through the Fellowship program.
  7. Finally, Bell Canada questioned the value to Canadians, who ultimately pay for costs awards through their telecommunications service rates, of work being allocated to expert witnesses. Bell Canada argued that in the present case, much of the work completed by the AAC’s expert witness could have been completed by in-house and/or more cost-effective resources. Moreover, Bell Canada pointed out that according to the Guidelines, when evaluating whether a costs claim is excessive, the Commission will consider the relative expertise and experience of the person whose time is being claimed. Bell Canada argued that therefore, any costs associated with the revision of the expert witness report, which involved corrections or additions that one could reasonably have expected the expert to know when he wrote the report, should be denied.
  8. As a result, Bell Canada proposed that the AAC’s overall costs be reduced to $247,986.58.
  9. With respect to the allocation of the responsibility for payment of costs, Bell Canada submitted that costs should be apportioned between the telecommunications service providers that participated in the proceeding based on telecommunications operating revenues (TORs), consistent with the Guidelines.
  10. TCC submitted that the Commission should ensure that the allocation of the responsibility for payment of costs truly reflects the relative interest and size of the costs respondents, as well as their ability to absorb the costs. In TCC’s view, apportioning costs based on TORs may be appropriate in this case, but the Commission must ensure that it calculates TORs in an accurate and competitively neutral manner. Specifically, TCC submitted that the Commission should allocate costs based on the TORs of the parent companies of those costs respondents that have them.


  1. The AAC argued that Bell Canada and TCC had improperly conflated the test for eligibility for an award of costs, which requires responsible participation (in the hearing and procedural matters), and the test for whether the amount of the costs claimed is appropriate. The AAC submitted that its procedural conduct in the proceeding was above reproach, and that since the parties did not object to the AAC’s eligibility for an award of costs regarding the other criteria, it is clearly eligible for costs.
  2. In response to the argument that the total amount the AAC claimed is excessive, the AAC argued that there is no upper limit on the amount that can be claimed, as long as the amounts are consistent with the Guidelinesand were necessarily and reasonably incurred, as set out in subsection 56(1) of the Telecommunications Act. The AAC stated that the purpose of awarding costs is to encourage public participation in Commission proceedings. The AAC submitted that it would be unreasonable for the Commission to require organizations like it to participate in the same manner as a private law firm, as advocated by Bell Canada and TCC. The AAC indicated that the Commission needs to determine only whether the AAC advocated effectively for the public interest to achieve the best outcomes for consumers.
  3. Regarding the argument that the amount claimed was excessive on the basis that consumers will ultimately have to pay, the AAC indicated that this is not necessarily the case, and that the parties have overlooked the important role that public interest group participation can play in ensuring that costs for Canadian consumers are lowered in areas where the market is incapable of doing so.
  4. The AAC argued that the amount claimed is not unprecedented, since an amount that in today’s dollars would equal $382,973.95 was awarded to a coalition similar to the AAC (in that case, Action Réseau Consommateur) for its participation in the proceeding initiated by Public Notice 2001-37. The AAC argued that that proceeding was much more comparable in size and scope to the basic telecommunications services proceeding than the examples of proceedings provided by Bell Canada and TCC. Moreover, the AAC argued that in applying the Commission’s criteria for evaluating whether the costs claimed are excessive, (i) its participation in the proceeding was extensive; (ii) the proceeding was complex; (iii) the responsibility the AAC took on, particularly by PIAC as the coordinating member of the coalition, was large; (iv) its submissions and viewpoint were unique; and (v) there was no overlap with other public interest interveners.
  5. In response to the argument that the ACC relied too heavily on external legal counsel, the AAC submitted that since PIAC is a small organization that was attending to numerous other files during the same time frame as that of the proceeding, PIAC’s General Counsel judged that it would be less expensive to use internal and more junior resources for other, less complicated files, especially since its senior external legal counsel had already been engaged in other proceedings related to basic telecommunications services and were therefore already up to speed on the associated issues. The AAC added that while PIAC filed the costs application, it did so on behalf of several public interest organizations that made up the coalition, and that all of these organizations are eligible for the entire amount of costs claimed.  
  6. In response to the allegation that Mr. Lawford was in fact an employee of PIAC and had so reported to the Law Society, the AAC argued that his situation is unique. The AAC explained that although this legal counsel was appointed Executive Director and General Counsel of PIAC by the PIAC Board of Directors, he receives no salary or employment income. Instead, he performs any legal work required by PIAC, and he is free to represent other clients since he runs an independent law practice. While his reported status to the Law Society is “Practising Law – Employed,” this reflects a longstanding agreement with the Law Society for the PIAC Executive Director position, which permits the person in that position to pay lower insurance rates. The AAC indicated that this may be an unusual arrangement, but that it does not change the reality that Mr. Lawford is the AAC’s external legal counsel and has been consistently accepted as such by the Commission.
  7. In response to the argument that the articling students were also in-house to PIAC, the AAC argued that they are articling students to Mr. Lawford alone. While the Fellowship program salary for the articling students is paid care of PIAC, PIAC retains no part of it, and simply holds the funds for the students and disburses them regularly. This arrangement enables Mr. Lawford’s students to access the Fellowship program and to work with him on PIAC files, outside files, and other PIAC matters if time allows. While this situation may be unusual, it is accepted by the Law Society, PIAC, and the Fellowship program. It has also been consistently accepted by the Commission. Finally, the AAC submitted that there is no obligation for the costs for the articling students to have actually been incurred by PIAC or by other members of the AAC, nor for the amounts to be reduced due to the salary paid by the Fellowship program, since this funding was not specific to the proceeding.
  8. In response to the argument that senior external legal counsel were conducting work that could have been done by more junior and in-house resources, the AAC contended that this argument demonstrates a superficial understanding of the timesheets provided. The AAC indicated that for the sake of efficiency and client confidentiality, senior staff use the general categories required for the purpose of the Commission’s costs forms. The AAC stated that while these categories could be specified, lawyers have a duty of candour to their clients, and that it should not be assumed, on no other evidence than the use of generic notations on costs forms, that the lawyers are padding their time. Moreover, the AAC submitted that requiring more detailed timekeeping notes would be administratively burdensome and, in most cases, could only be provided to the Commission in confidence given solicitor-client privilege.
  9. The AAC also clarified that the rate it claimed for the junior external counsel was different during the first three weeks of the proceeding, since that counsel then reached six years of practice. The AAC argued that although the Guidelines state that the rate claimed must be for the years of practice completed at the beginning of a proceeding, in this case, given the length and complexity of the proceeding, as well as the relatively short period after the proceeding’s initiation that the junior counsel’s years of practice changed, this is an appropriate context in which to depart from the Guidelines.
  10. In response to the argument that the amounts claimed for the expert witness were excessive, the AAC stated that these amounts were entirely justified.
    The AAC submitted that because of the expert witness’s contribution, the AAC was the only party to file a properly and fully developed subsidy proposal. The AAC indicated that the amount of time claimed for the expert witness’s report was justified since the report comprised a comprehensive package including original quantitative and qualitative analyses, international and historical research, and main design parameters for two specific programs that were then costed based on objective criteria applied to the Canadian situation. Moreover, the AAC argued that since the report was the only concrete proposal on the record, it was placed under significant scrutiny and subject to a significant number of interrogatories.
  11. The AAC submitted that at least 90% of its time spent on interrogatories related to complex answers that could not have been completed by anyone else, meaning that a maximum of 18 hours could have been charged to a more cost-effective resource. The AAC stated that the revised report does not simply correct mistakes or omissions; it provides additional detail that was not possible within the limited time frame for the submission of the first report. Even if one did categorize some of the revisions in the report as omissions from the first report, these would constitute only 19 of the additional 99 hours spent on the report, since the rest of these hours were spent on research to respond to the interrogatories and to adapt the funding models to the Canadian context.
  12. The AAC submitted that overall, the expert witness’s evidence was crucial to a better understanding of the issues by the Commission. The models developed by the expert witness became a central feature of the hearing and sparked in-depth discussions on how a subsidy would work. The AAC stated that therefore, the related expense was necessarily and reasonably incurred.

Commission’s analysis and determinations


  1. The criteria for an award of costs are set out in section 68 of the Rules of Procedure, which reads as follows:

    68. The Commission must determine whether to award final costs and the maximum percentage of costs that is to be awarded on the basis of the following criteria:

    (a) whether the applicant had, or was the representative of a group or a class of subscribers that had, an interest in the outcome of the proceeding;

    (b) the extent to which the applicant assisted the Commission in developing a better understanding of the matters that were considered; and

    (c) whether the applicant participated in the proceeding in a responsible way.

  1. In Telecom Information Bulletin 2016-188, the Commission provided guidance regarding how an applicant may demonstrate that it satisfies the first criterion with respect to its representation of interested subscribers. The AAC represents a broad spectrum of Canadian consumers, including those who have low incomes or who are seniors. The AAC has demonstrated this representation by (i) relying on the elected boards of directors of its member organizations; (ii) informing, and in some cases consulting, those members directly; and (iii) conducting qualitative research to confirm its members’ opinions and needs.
  2. The AAC has also satisfied the remaining criteria through its participation in the proceeding. In particular, the AAC provided a concrete, practical, and researched position, including two funding models, which spurred significant debate during the proceeding.
  3. Accordingly, the AAC is eligible for an award of costs in relation to its participation in the proceeding.

Legal fees

  1. In the Guidelines, which are set outin Telecom Regulatory Policy 2010-963, the Commission addressed the most efficient and effective way to determine whether legal counsel are in-house or external. Specifically, the Commission stated that “in light of the serious repercussions that follow misrepresenting oneself before a law society, the Commission considers that requiring a claimant practising law to attest to the manner in which the claimant reports his or her employment status to any law society of which he or she is a member is a reliable manner of assessing whether counsel may claim an outside-counsel rate.” The Commission then amended the costs forms accordingly.
  2. The record of this proceeding reveals that while Mr. Lawford had indicated on the costs form that his status as reported to the Law Society was “Private Practice,” it was later conceded that his actual status as reported to the Law Society was “Practising Law – Employed.” However, the Guidelinesexplicitly require a lawyer claiming costs to attest to their status as reported to the relevant law society, and the associated question on the costs form is unambiguous.Footnote 3 It was only when confronted with this discrepancy that the AAC argued why Mr. Lawford’s reported status is not an appropriate measure of whether he is in-house or external counsel. The Commission therefore finds as a matter of fact that the information provided on the costs form was inaccurate.
  3. The Commission reminds parties that questions on the costs form must be answered accurately and truthfully. It is open to claimants to (i) provide explanations in cases where they feel that a question does not address their particular circumstances, or (ii) request an exception to the Guidelines. This ensures the transparency of the Commission’s proceedings and respect for the Commission’s role as a decision maker.Footnote 4 In cases where a potential costs applicant is uncertain of their eligibility for costs at a certain rate, the Guidelines permit them to apply to the Commission at the beginning of a proceeding for a determination with respect to eligibility.
  4. The Commission has now considered the issue of the rate to be awarded for the time spent by Mr. Lawford as it has been argued by the parties to this costs proceeding. While the Commission finds that Mr. Lawford reports to the Law Society as “Practising Law – Employed,” it considers that the specific circumstances of the proceeding warrant an exception to the normal rate scale applicable under the Guidelines. Specifically, the AAC is a coalition of five large public interest groups, requiring significant coordination. The proceeding was lengthy and complex, with high importance for consumer groups and the public interest. The AAC’s contribution in the proceeding was detailed, researched, and of particular importance in setting a baseline for debate on the funding models that could be adopted. Accordingly, given the special circumstances of the proceeding, the Commission exercises its discretion not to apply the Guidelines,and allows the costs claimed at the external rates for Mr. Lawford and the two articling students.
  5. With respect to the rate claimed for the junior counsel, given the length of the proceeding relative to the very short time period during which the more junior rate would have applied, the Commission considers it appropriate in the circumstances to make an exception to the Guidelines, and to allow the rates as claimed. However, upon reviewing the costs application, the Commission discovered a clerical error resulting in 0.2 hours being miscalculated, such that the actual amount claimed before the HST and the rebate for the 492.14 hours should equal $100,806.84, rather than $100,847.89. This leads to an adjustment, after the HST and the rebate are calculated, to a total claim for the AAC’s junior counsel of $104,778.63. Therefore, the Commission reduces the costs claimed by $42.67.
  6. In light of the above, the Commission reduces the costs claimed for the AAC’s legal fees to $250,511.19, and the total amount claimed to $455,046.82.

The reasonableness of the amount of time claimed for the external counsel and the expert witness

  1. After reviewing the costs application, the Commission finds that the AAC’s allocation of work to senior and external counsel, as well as to the expert witness, was reasonable, and that the associated fees were necessarily and reasonably incurred. The proceeding was unusually large and complex; therefore, it was reasonable in the context to use experienced counsel to ensure the most efficient and effective advocacy possible. The retention of the expert witness resulted in concrete proposals that were the subject of significant debate, and that clearly could not have been completed by in-house resources.
  2. Although the overall amount of costs claimed is large, it is not dissimilar to amounts claimed in past proceedings of similar scope or scale. The amount also reflects the AAC’s particular choice to propose two concrete funding models, which were useful to the Commission. The Commission considers that awarding costs in the amount claimed, as adjusted above, will not affect the ability or incentives of telecommunications service providers to participate in Commission proceedings, since (i) proceedings of similar size and scope, with such obvious and direct implications for consumers, are relatively rare, and (ii) when such proceedings do occur, they also have obvious and direct implications for telecommunications service providers sufficient to outweigh the potential costs that providers may be directed to pay.


  1. The Commission finds that the total amount claimed by the AAC, as adjusted above, was necessarily and reasonably incurred and should be allowed.
  2. This is an appropriate case in which to fix the costs and dispense with taxation, in accordance with the streamlined procedure set out in Telecom Public Notice 2002-5.

Costs respondents and allocation

  1. The Commission has generally determined that the appropriate costs respondents to an award of costs are the parties that have a significant interest in the outcome of the proceeding in question and have participated actively in that proceeding. Given the scope of the proceeding, a large number of parties both had a significant interest in the outcome of the proceeding and participated actively in the proceeding.
  2. As set out in the Guidelines, the Commission will generally name a maximum of 10 costs respondents for a costs award of up to $20,000 and will add an extra respondent for each additional $5,000 awarded. However, as set out in Telecom Order 2015-160, the Commission considers $1,000 to be the minimum amount that a party should be required to pay due to the administrative burden that small costs awards impose on both the applicant and costs respondents.
  3. Accordingly, Bell Canada; the Canadian Independent Telephone Company Joint Task Force (JTF); the Canadian Network Operators Consortium Inc. (CNOC);Footnote 5 Cogeco Communications Inc. (Cogeco);Footnote 6 Eastlink; Freedom Mobile Inc. (Freedom Mobile);Footnote 7 MTS; Quebecor Media Inc., on behalf of Videotron G.P. (Videotron); Rogers Communications Canada Inc. (RCCI);Footnote 8 Saskatchewan Telecommunications (SaskTel); Shaw Cablesystems G.P. (Shaw); TBayTel; TCC; Telesat Canada (Telesat); Xplornet Communications Inc. (Xplornet); and Yak Communications (Canada) Inc. (Yak) are the appropriate costs respondents in the circumstances.
  4. It is the Commission’s general practice to use TORsFootnote 9 as an indicator of the relative size and interest of the parties involved in the proceeding. No party disputed the appropriateness of using TORs in the present case, though TCC argued that the Commission should use the TORs of the parent companies of the costs respondents, where applicable, to ensure accuracy and competitive neutrality in the allocation of costs.
  5. In this case, Bell Canada participated in the proceeding on its own behalf and on behalf of a number of affiliates. Accordingly, it is appropriate to calculate Bell Canada’s responsibility for payment of costs with respect to the TORs of all of these Bell companies. Beyond this, taking the TORs of any parent companies into account, as proposed by TCC, would have little material impact on the allocation of costs in the present case. Consequently, the Commission does not consider it necessary to deviate from its general practice, which is to base its determinations regarding the allocation of responsibility for payment of costs on the TORs of the parties that actually participated in the proceeding, regardless of whether those parties are affiliated with other entities that provide telecommunications services in Canada and report TORs to the Commission.
  6. Accordingly, the Commission finds that the responsibility for payment of costs should be allocated as follows:
    Company Percentage Amount
    Bell Canada 34.8% $158,356.29
    TCC 23.8% $108,301.14
    RCCI 21.6% $98,290.11
    Videotron 4.2% $19,111.97
    MTS 3.1% $14,106.45
    Shaw 2.9% $13,196.36
    SaskTel 2.4% $10,921.12
    Cogeco 1.5% $6,825.70
    CNOC 1.2% $5,460.56
    Freedom Mobile 1.0% $4,550.47
    Eastlink 0.9% $4,095.42
    Telesat 0.9% $4,095.42
    JTF 0.5% $2,275.24
    Xplornet 0.5% $2,275.24
    TBayTel 0.4% $1,820.19
    Yak 0.3% $1,365.14
  7. Consistent with its general approach articulated in Telecom Costs Order 2002-4, the Commission makes Bell Canada responsible for payment on behalf of the Bell companies. Also consistent with this practice, the Commission makes CNOC and the JTF responsible for payment on behalf of their respective members. The Commission leaves it to the members of these organizations to determine the appropriate allocation of the costs among themselves.

Directions regarding costs

  1. The Commission approves, with changes, the application by the AAC for costs with respect to its participation in the proceeding.
  2. Pursuant to subsection 56(1) of the Telecommunications Act, the Commission fixes the costs to be paid to the AAC at $455,046.82.
  3. The Commission directs that the award of costs to the AAC be paid forthwith by the costs respondents and according to the proportions set out in paragraph 52.

Secretary General

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