CCTA to ask Supreme Court to rule on CRTC’s right to regulate utility pole access

The courts will end up replacing the CRTC in resolving disputes between cable operators and utilities unless the Supreme Court of Canada overturns a lower court ruling that effectively puts hydro poles outside the commission’s jurisdiction, the cable industry warns. The Canadian Cable Television Association (CCTA) says it will seek leave to appeal a July 13 decision by the Federal Court of Appeal that struck down a 1999 decision by the CRTC (Telecom Decision 1999-13). The court said the commission overstepped its jurisdiction in setting rates for access to hydro poles. "It was an easy decision for the courts to make. It was evident the CRTC twisted the legislation to justify its decision," says John Wong, planning and operations coordinator at the Municipal Electric Association (MEA), which filed the appeal with the federal court on behalf of a group of utilities. Federal Court ExpressThe only thing more surprising to industry observers than the Federal Court of Appeal decision itself was how quickly it was released. The case was heard in Toronto on June 13 and 14 and the decision was released on July 13. "I think it’s fair to say that pretty much everyone in the industry was surprised about how quickly that decision was released," says the CCTA’s Lori Assheton-Smith. Says Leslie Milton, a lawyer with Johnston & Buchan: "We were surprised and pleased. I know they have been trying to move things along quickly, particularly issuance of a decision. There’s not a lot they can do about scheduling hearing dates if they’re all booked up but they have been trying to turn around decisions really quickly."CCTA general counsel Lori Assheton-Smith says her association may also file a stay application with the Supreme Court asking that the commission’s decision stand until the court issues a final ruling on the matter. The court ruling represents the single biggest setback for the cable industry in its five-year battle with utilities over access rates to poles, and whether poles are classed as an essential facility under the Telecommunications Act, and as such, fall under the jurisdiction of the CRTC. Utilities say such access falls outside the CRTC’s mandate and the Federal Court appears to agree. The court was responding to an appeal by utilities over the 1999 decision by the CRTC in which it granted cablecos access to poles owned by provincially regulated power companies (CCR, Oct. 20/99). It also established a rate of $15.89 per pole, far less than the $40.53 rate requested by utilities. The CCTA has until Oct. 1 to seek leave to appeal to the Supreme Court. If granted, Assheton-Smith anticipates the appeal will drag out for at least a year. She warns that if the CRTC jurisdiction in this area isn’t upheld, cable operators will have "no effective recourse, except perhaps through the courts" if their negotiations with utility companies fail or there’s a dispute on the terms of access or the rate. In its second quarter financial report released July 26, Rogers Communications Inc suggested that no agency would have the authority to set hydro pole rates in Ontario, or alternatively, that the Ontario Energy Board could assume the role. Rogers VP of communications Jan Innes says Rogers plans to fight the court decision through its membership in the CCTA. Power companies would prefer that the issue be left between the negotiating parties. Ironically, the MEA employs an argument the cable industry often uses in reference to carriage negotiations with specialty broadcasters. "It’s solely a matter of commercial negotiations. The hydroelectric industry also has pressure to make a return for its shareholders," Wong told CCR. He says it’s time for utilities to stop subsidizing cable subscribers. In 1997, the MEA set the cost for yearly use of a pole at about $40. Wong says cablecos don’t want to foot any of the cost of the buried part of the poles or the part between the ground and the wires. More-over, Wong points out that cablecos can now provide much more information and services, including Internet access, through its cable lines and are generating more revenue using the lines. The cable industry has options other than negotiating with utilities. Assheton-Smith says it is possible for cablecos to secure their own access to municipal rights-of-way and erect their own poles, but notes "that might not be a satisfactory result for anybody, including the municipalities". Another option is to amend the Telecommunications Act. In its decision, the Federal Court of Appeal ruled that a transmission line, as defined in the act, refers to cable and telephone lines and poles, not utility poles. Justice Marshall Rothstein suggests a literal reading of subsection 43(5) of the Telecom Act would give the CRTC the power to direct that anyone have access to transmission lines, regardless of which level of government regulated the lines. "Such an interpretation would imply that Parliament was purporting to confer jurisdiction on the CRTC, not only outside Parliament’s legislative jurisdiction under the Constitution Act but also, well beyond the mandate of the CRTC to regulate telecommunications and broadcasting … That obviously could not have been the intention of Parliament," he wrote. The court did not expressively deal with the rate issue because it had concluded the commission had no jurisdiction to make the order in the first place. University of Toronto law professor Hudson Janisch suggests the court may have overturned the CRTC decision because of how "transmission line" is defined in dictionaries. "The court said, ‘Well, if it’s just a matter of words, we are just as competent as the CRTC to determine the meaning of the…term transmission line’. …The court did not defer to the expertise of the CRTC because it was not a matter that called on the commission to use any particular knowledge and expertise and familiarity with the telecommunications industry," he notes. Janisch doubts the political will exists to change the definition in the Telecommunications Act, saying it would open the legislation to broader constitutional and jurisdictional challenges. "I think that it would be unlikely that the federal government would be prepared to provoke a constitutional battle with respect to authority over telecommunications matters." Leslie Milton, of the Ottawa law firm Johnston & Buchan, concurs: "I could certainly envision that if the drafting was changed to make it absolutely clear that the section did apply to transmission lines of power utilities, we would again see utilities coming back, but on the basis solely of the constitutional ground." CRTC spokesperson Denis Carmel says the commission is still weighing what it will do with at least two Part VII applications before it regarding pole access disputes between cablecos and utilities. If the court of appeal’s decision is upheld by the Supreme Court, it could have a significant impact on these applications. For more on this story, see the July 30/01 edition of our affiliate publication, Network Letter.

CCTA to ask Supreme Court to rule on CRTC’s right to regulate utility pole access

Broadcast | August 2, 2001

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