Arguments in utility pole access appeal filed with Supreme Court of Canada

Utility companies and telcos and cablecos are gearing up for a tough fight over pole access rates as the Supreme Court of Canada prepares to hear the appeal in the utility pole decision. Each accuses the other of distorting the facts to suit their own personal interests. The situation arose out of last year’s ruling by the Federal Court of Appeal that the CRTC did not have the jurisdiction to set the rates utility companies charge telcos and cablecos for access to their poles (NL, July 30/01). Utilities are regulated by the provinces; telephone and cable firms fall under federal control. The utilities maintained the federal regulator overstepped its authority by setting rates at $15.89 per pole rather than the $40.53 they had been seeking. The appeal court unanimously agreed. The Canadian Cable Television Association (CCTA) sought leave to appeal the decision to the Supreme Court. That was granted last spring (NL, May 21/02). In an affidavit supporting the utilities, John Brooks, president/CEO of Toronto Hydro-Electric System Ltd., says many support structure agreements are in place across the country. He scoffs at the notion the situation is as dire as the CCTA says. "There is no crisis in Canada with regard to the joint use by telecom companies of power support structures," he states. "Until the applicant made application to the CRTC in1997, no dispute had ever arisen before the CRTC, or any federal regulator, with regard to the joint use of power poles by telecom companies. In fact, subsection 43(5) of the Telecommunications Act, the provision central to this proceeding, had never been invoked by any party until this proceeding arose." The director of utility practices for the Municipal Electric Association (now called the Electricity Distributors Association) continues to raise doubts about the hurt the cablecos say they would suffer if the appellate court ruling were allowed to stand. "The only harm that may be inflicted on the CCTA’s members is financial damage," Wassim Hassan said in a 1997 affidavit submitted as background to the Supreme Court. The CCTA, in its response, accuses the utilities of trying to re-argue many of the findings of the CRTC. The issues raised in the application underline the public importance of the topic.The utilities assert that battles between the owners of the poles and those who wish to use them are "rare" and are "almost invariably" settled by negotiation. Nothing could be further from the truth, the association responds. "These assertions are directly contrary to factual findings by the CRTC," the reply states. "The commission found that the parties negotiated for a new pole rental rate from early 1996 until June 1998. Negotiations were unsuccessful as a result of the MEA’s position that the rate should be increased almost 400 per cent. One month after existing agreements expired, municipal power utilities began to deny access to their support structures." The document was prepared by two Toronto law firms acting on behalf of the CCTA. Thomas Heintzman and Susan Gratton are McCarthy Tétrault LLP’s representatives on the team, while Neil Finkelstein and Seumas Woods of Blake, Cassels & Graydon LLP also worked on the submission. Backing the CCTA in the battle is Peter Nielsen, VP government and industry relations for Shaw Communications Inc. He presents figures showing the vast majority of poles supporting telephone and cable wires are owned by the utilities. In Ontario, 74 per cent of the poles are fully or partially owned by the power companies, while all the poles in Newfoundland are held by Newfoundland Power Inc."The business of cable and telecommunications companies is inherently national in scope," he attests. "The broadcasting distribution industry is an essential ingredient of the delivery of television signals to Canadians across the country, thereby contributing to the implementation of national cultural policy objectives." He also warns that high-speed Internet services could be affected if the power companies cut off access for telcos and cablecos. Businesses and individuals rely on the services as part of everyday life, Nielsen adds. The Ontario public utilities that are respondents to the action say the CCTA and its supporters are exaggerating the effect of the court of appeal ruling. Peter Ruby and Alan Mark of Goodmans LLP stress that the underlying principle is jurisdictional. "Contrary to the assertion of the application, nothing in this case will have a vital impact on the achievement of Canada’s tele-communications and broadcasting policy objectives. For many decades, the users of utility poles have developed consensual agreements for the stringing of multiple sets of wires on poles," the utilities write. "This case deals with the narrow question of whether Parliament, in subsection 43(5) of the Act, intended to give to the CRTC, rather than leave with the provinces, the power to regulate access to provincially owned poles in the rare event of a dispute over the terms of that access." The CCTA says the utilities are too narrow in the terms they employ. "The respondents rely only on the interpretation of the phrase ‘transmission line’. It is submitted that both the respondents and the Federal Court of Appeal overlook the significance of the phrase ‘person who provides services to the public’," the association avers. The Supreme Court has not set a date for hearing the appeal. Given the heavy case load before them, the justices will likely not get to consider the matter until late fall or early next year.

Arguments in utility pole access appeal filed with Supreme Court of Canada

News | July 15, 2002

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