Utilities willing to negotiate pole access as CCTA files leave to appeal application

The association representing Ontario electrical utilities plans to open discussions with Canadian cable operators in an attempt to negotiate reasonable rates for access to utility poles. The move comes as the Electricity Distributors Association (EDA) is preparing a response to the cable industry’s appeal of a federal court ruling on pole access. The EDA, formerly known as the Municipal Electric Association, expects that if the Canadian Cable Television Association (CCTA) is granted leave to appeal a Federal Court of Appeal decision on access to utility poles, the case could drag on for years. Although the EDA will be filing a response to the CCTA’s leave to appeal application by the end of the month, an EDA official says it will attempt to negotiate with cablecos on a fair price for access. "What we plan to do in the meantime is to start some discussions with cable companies to determine a reasonable rate. That’s what we are planning to do," John Wong, the EDA’s planning and operations coordinator, tells CCR. "If they (the CCTA) are successful in getting leave to appeal, it could be in the court for two years. We need to start discussions on an appropriate rate pretty soon to determine a price that could enable us to recover costs and also be affordable to the cable companies." Wong says a response to the CCTA application for leave to appeal is in the works. The EDA is filing on behalf of a consortium of 19 Ontario power companies, which successfully challenged a CRTC decision (Decision 1999-13) that set the annual rate of access to poles at $15.89 per pole. The utilities had argued that the commission does not have jurisdiction over pole access because the companies are provincially regulated (CCR, Aug. 2/01). However, the CCTA wants the federal court’s decision overturned and sought leave to appeal last month on the grounds that it will prevent the CRTC from implementing Canada’s telecommunications and broadcasting policy objectives as expressed in the Telecommunications Act and the Broadcasting Act. "The effect of the decision would be to eliminate, or at best balkanize, regulatory supervision over a vital element of this infrastructure at a time when it is of unparalleled importance to Canada’s future," the CCTA writes in its leave to appeal application. The CCTA also argues that the deregulation of the electrical and telecommunications industries and technological developments have given electric power utilities the ability and incentive to compete in the broadcasting and telecommunications markets. "Absent effective regulatory supervision by the CRTC, many power utilities will have the incentive to increase access rates and possibly deny access to their competitors in the communications industries," the association argues. Cablecos can’t build own poles The CCTA notes that the CRTC, not provincial boards, should be charged with resolving disputes or a "hodgepodge of different rates and access regulations for the members of the same industry" could result. The CCTA points out that cablecos do not really have the option of erecting their own poles because moving existing cables stranded on the support structures of electric power utility poles would result in significant expenditures and possible service disruptions. The association also points out that "Parliament, the CRTC and industry experts have long agreed that cable companies, carriers and others should be required to share existing support structures. This (cablecos constructing their own poles parallel to the utility poles) would cause significant environmental and aesthetic degradation and inconvenience and is not in the public interest," the CCTA states. The issue of the CRTC’s jurisdiction under section 43 (5) of the Telecommunications Act hinges on whether the term "supporting structure of a transmission line" applies to provincially regulated utilities. The Federal Court of Appeal ruled that it didn’t. The CCTA argues in its leave to appeal application that the court’s narrow interpretation of the term "transmission line" was flawed in three respects, each of which raises issues of public importance. First, the CCTA says that the court’s failure to adopt a purposive approach to interpretation resulted in a decision that is divorced from the real-life context of broadcasting and telecommunications regulation. Second, it argues the court should have considered the different contexts in which the term "transmission line" is used. Third, it states that "the court applied the constitutional technique of reading-down ss 43 (5) in an unprecedented and, it is submitted, inappropriate way." These are points the EDA plans to address in its response, but Wong could reveal little of the utility association’s strategy at this time. "I don’t know yet (what our official response will be). We’re still talking to our lawyers and working on it," he says. But Wong notes that according to the Federal Court of Appeal decision, "the CRTC ruling is not operative" and the utilities are now able to "set reasonable rates to recover the cost of providing the service." "I’m sure (the utility companies) will look at upping their rates, because $15.89 is not sufficient to recover their costs," he notes. But the CCTA states in its leave to appeal application that the desire of utility companies to increase the yearly access rate per pole by 400 per cent from the amount of $10.42 under previous contracts to $40.92 per pole is "unacceptable." Although the CCTA has so far not requested a stay of the Federal Court of Appeal’s decision, that option remains open. After the EDA files its response, the CCTA will have seven days to respond. A panel of three judges will then determine whether or not to grant the CCTA leave to appeal. If it does, the actual appeal would proceed sometime in 2002. For more information on the CCTA’s leave to appeal bid, see the Oct. 22/01 edition of CCR affiliate publication, Network Letter.

Utilities willing to negotiate pole access as CCTA files leave to appeal application

Broadcast | October 26, 2001

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Utilities willing to negotiate pole access as CCTA files leave to appeal application

Broadcast | October 26, 2001

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