Telecom - Secretary General Letter addressed to Scott Gibson (TerreStar Solutions Inc.)
Ottawa, 5 February 2024
Reference(s): 8662-T133-202305119
BY EMAIL
Scott Gibson
General Counsel and Corporate Secretary
TerreStar Solutions Inc.
1035, Laurier Avenue West, Suite 300
Outremont, Quebec, H2V 2L1
scott.gibson@terrestar.ca
Subject: Secretary General Letter - Telecom - Application for a stay with respect to Telecom Decision CRTC 2023-182
Dear Scott Gibson:
On 25 August 2023, TerreStar Solutions Inc. (TerreStar) filed a Part 1 application to review and vary Telecom Decision 2023-182 pursuant to section 62 of the Telecommunications Act (the Act) and Part 1 of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure. In addition, TerreStar requested a stay that decision wherein it was directed to file revised monthly contribution reports with the Central Fund Administrator (CFA) of the National Contribution Fund (NCF) as a result of the Commission’s determination that spectrum sale and subordination is a telecommunications service as defined in section 23 of the Act.
The Commission determines the annual amounts to be collected by the NCF, which provides funding to both the Broadband Fund and the national video relay service. These funds are vital in supporting the Commission’s mandate to support continuing access by Canadians to reliable, accessible and high-quality telecommunications services.
The Commission deniesTerreStar’s request for a stay with respect to Telecom Decision 2023-182. A decision regarding the review and vary application will be issued later this year.
The Applicable Test
The criteria generally applied by the Commission to assess applications for a stay are those set out by the Supreme Court of Canada in RJR-MacDonald Inc. v. Canada (Attorney General) [1994] 1 S.C.R. 311 (RJR-MacDonald):
- there is a serious issue to be determined;
- the party seeking the stay will incur irreparable harm if the stay is not granted; and,
- the balance of convenience, taking into account the public interest, favours granting the stay.
To be granted a stay, an applicant must demonstrate that its application meets all three criteria.
TerreStar submitted that a stay should be granted because its application satisfies each element of the RJR-MacDonald test. For the first criterion, TerreStar argued that there were several serious issues outlined in its review and vary application, including several errors of fact and law in the Commission’s decision. For the second criterion, TerreStar stated that the task of revising, recalculating, refunding and reclaiming contribution charges would be a significant undertaking that could not be compensated. Furthermore, TerreStar submitted that it would lose the forward-looking competitive value of the investment that could be made to its networks that would otherwise go to the unnecessary payment of contribution charges if its review and vary application is successful. Lastly, with respect to the balance of convenience, TerreStar generally reiterated the arguments it made relating to the second criterion.
Commission analysis and determination
Is there a serious issue to be determined?
If an application for a stay is not clearly frivolous, it will generally meet the first criterion of whether there is a serious issue to be determined. In assessing whether TerreStar has satisfied the first part of the test, the Commission considers that TerreStar’s review and vary application is neither frivolous nor vexatious. It raises legitimate questions to be determined. Accordingly, the Commission finds that the application meets the first criterion.
Will TerreStar suffer irreparable harm if the stay is not granted?
In RJR-MacDonald, the Supreme Court of Canada clarified that in assessing irreparable harm, it is the nature of the harm that is to be considered and not its magnitude. The issue of magnitude is, however, relevant when assessing the balance of convenience. Irreparable harm is harm which either cannot be quantified in monetary terms, or which cannot be cured.
TerreStar submitted that it would suffer irreparable harm if the stay is not granted on the basis that the task of revising, recalculating, refunding and reclaiming the contributions would likely be a significant undertaking. Given that these tasks are done jointly by Commission staff and the CFA, not TerreStar, it is not clear how the completion of these tasks would result in irreparable harm to TerreStar. Furthermore, consideration of the work needed to recalculate and process refunds, if necessary, is more properly considered when assessing the balance of convenience.
With respect to TerreStar’s argument that it would lose the forward-looking competitive value of the investment that could be made to its networks, the NCF rate charge is below 0.5% of revenues for the years in question. This amount is minimal and thus unlikely to impact forward looking competitive value in such a way as to give rise to irreparable harm. The company is still in business, and it has not provided evidence in its application that it would not otherwise still make investments should it have to provide its contributions.
In addition, in the event that the relief in TerreStar’s review and vary application is granted, any funds paid to the NCF would be returned. Consequently, any alleged harm suffered would be temporary in nature and compensated for. The amount at stake can be quantified and, if necessary, the situation can be remedied. The Commission therefore finds that TerreStar has not demonstrated that it would suffer irreparable harm if the stay is not granted.
Does the balance of convenience favour granting the stay?
To meet the last criterion, the applicant must demonstrate that the balance of convenience, taking into account the public interest, favours granting the relief sought until the Commission has disposed of the issues. In RJR-MacDonald, the Supreme Court of Canada stated that the factors which must be considered in assessing this part of the test are many and will change in each individual case.
TerreStar generally repeated the same arguments it made with respect to irreparable harm as it does in this part of the test. Regarding the work required, any recalculation and refund, should the review and vary be successful in the absence of a stay, could straightforwardly be processed and would not disrupt the day-to-day workload of the CFA. However, if the stay were granted, the CFA would then have an additional administrative burden in processing modifications on a provisional basis where the calculations could ultimately have to be re-done if the review and vary application is denied.
In terms of impacts to the company’s ability to continue to make investments in its networks, the amount that TerreStar is required to contribute into the NCF is small and should have minimal impact in this regard. Therefore, even if TerreStar had demonstrated irreparable harm, which it did not, the balance of convenience favours denying the request for a stay.
The Commission determines that TerreStar did not satisfy the RJR-MacDonald test for granting a stay. Therefore, the Commission denies TerreStar’s request for a stay with respect to Telecom Decision 2023-182. TerreStar must respect the requirements for contributions and monthly filings in that decision unless and until the Commission issues its decision on the review and vary application indicating otherwise.
Yours sincerely,
Marc Morin
Secretary General
cc:
Stephen Schmidt, TELUS Communications Inc., Vice-President – Telecom Policy & Chief Regulatory Legal Counsel, stephen.schmidt@telus.com
Leila Wright, CRTC
Ian Baggley, CRTC
Michael Bergeron, CRTC
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