Telesat should be treated the same as other telecommunications service providers

Canada’s wireless lobby and two incumbent service providers are opposing a broad exemption for Telesat Canada from new contribution rules even though the facilities-based satellite carrier primarily serves the broadcasting market. They argue that since some of Telesat’s customers are providing other "non-programming" services, they fall under the purview of the Telecommunications Act and, as such, revenue gained from those customers is contribution eligible. The arguments are made in submissions filed as part of Gazette Notice DGTP-008-01, a petition to the governor in council requesting that Telesat be exempted from the contribution regime (RoW, Oct. 15/01). In comments on the Cabinet appeal filed by broadcasters and broadcasting satellite users, SaskTel Communications and Telus Corp. state that Telesat is considered a telecom carrier and should not be granted special treatment under the contribution regime. The Canadian Wireless Telecommunications Association says that the contribution regime, which was put into effect on Jan. 1, has had a dramatic impact on the wireless industry, which has seen a 1,200 per cent increase in contribution payments this year from last year. All three agree that Telesat should be subject to the same terms and conditions as all other telecommunications service providers with revenue over $10 million. Telus points out that much of the petitioners’ position was already presented by Telesat and affiliate company TMI Communications in their review and vary application earlier this year (RoW, April 17/01). It was subsequently denied by the CRTC in Order 2001-435 (RoW, June 11/01). The western-based telco recalls the CRTC decision indicating that if Telesat chooses to pass along the extra charges on to its broadcasting customers, they would be affected in the same manner as all other Telesat customers. "Even under those circumstances, there is as much validity to claiming that Decision 2000-745 requires broadcasters to contribute to the provision of residential local telephone service, as there is to saying that the Canadian tax code requires consumers pay corporate income taxes (by virtue of the fact that consumers buy goods and services from corporations that pay taxes)," Telus writes. "Such reductionist logic is clearly without merit." Provincial ILEC SaskTel also indicates that the petitioners’ arguments are essentially a rehash of the Telesat R&V application and that they were already dealt with by the commission. "SaskTel believes that the commission rightly and fully addressed these arguments in its previous considerations and conclusions (and) the new revenue-based charge neither undermines broadcasting policy as set out in the Broadcasting Act, nor discriminates, shows undue preference or disadvantage to any party," the ILEC writes. Claiming financial hardship isn’t an argument that flies with the CWTA, which points out that the wireless industry will collectively pay about $200 million into the contribution pool as compared to the $15 million it paid last year. "The relief requested by the petitioners would further exacerbate that negative impact since the requested relief would reduce the number of carriers paying into the contribution fund, thereby causing a corresponding increase to the payments required of wireless carriers," the CWTA writes. The CWTA also points out that the contribution tax has been passed on to consumers of wireless services and sees no reason why Telesat customers, which happen to be in the broadcasting industry, shouldn’t pay the levy. "… in the context of the significant and relatively larger negative impact on the wireless telecommunications industry, there is a complete void of sound public policy reasons to singularly relieve the petitioners from the requirements of Decision 2000-745 despite what they believe to be unfair to them, in their particular circumstances," the wireless lobby writes.

Telesat should be treated the same as other telecommunications service providers

News | 11/13/2001 5:00 am EST

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