Vidéotron seeks $25 million in damages from two Toronto property firms

Vidéotron Télécom ltée (VTL) is suing two Toronto property managers for charging fees to access their buildings and is seeking $25 million in damages. The Quebecor Media Inc. subsidiary filed the claim two weeks ago against Oxford Properties and Cadillac Fairview Corp. The issue arises out of the purchase of the assets of Stream Intelligent Networks Corp. (NL, Apr. 9/02), which had a fibre-optic network passing through approximately 100 buildings in Toronto. Oxford Properties, a division of OPGI Management LP, owns or manages 19 of those units, while another 14 are under the jurisdiction of Cadillac Fairview. "In contrast to VTL’s dealings with other landlords, Oxford and Cadillac Fairview have refused to negotiate reasonably, or at all, with VTL in respect of the terms upon which the VTL Toronto Network may access the Oxford Properties and the Cadillac Fairview Properties," VTL’s February 12 Statement of Claim reads. "Each of Oxford and Cadillac Fairview have demanded, amongst other charges, that VTL pay an access fee of $0.03 per square foot of rentable space in the entire building or complex that the VTL Toronto Network passes through (the ‘Set Access Fee’) – regardless of the nature and extent of VTL’s presence or whether it has any customers in the building." The CLEC is asking the Ontario Superior Court of Justice to order access to the buildings, award $25 million in damages, treble damages under the Statute of Monopolies, and legal costs. It also wants $1 million in punitive damages and "such other relief as this Honourable Court considers just." VTL points out that the companies do not charge similar access fees to ILECs. "Landlords do not charge ILECs fees for space occupied or for hydro usage nor any other fees or charges for access to tenants located in their buildings. Nor do landlords charge access fees to any other service providers who enter their buildings to provide services to their tenants." The topic of fees has long been a bugbear in the telecom market. Metronet Communications Inc., a predecessor company of AT&T Canada Corp., used to pay access fees. Landlords, having gotten used to the extra revenue, decided to get as much as they could from other telcos. Those familiar with the case tell Network Letter that Oxford and Cadillac have remained intransigent throughout the negotiations with VTL. Only when discussions appeared to be going nowhere did the Quebec firm launch legal action. Some were surprised that VTL was willing to reveal as many details about its business as it did in the court filing. It mentions that it paid no access fees to landlords before March of last year. At that time, the costs of VTL’s presence in a building never exceeded $250 per month. "To date, VTL has, under protest, paid the amounts demanded to preserve the VTL Toronto Network pending its efforts to negotiate with Oxford and Cadillac Fairview," the Statement of Claim explains. "However, such negotiations have been terminated and VTL cannot continue to make such payments." Others counter that the lawsuit is entirely in character with the litigious record of Quebecor and its operating subsidiaries. On February 19, the Federal Court of Appeal refused to overturn a CRTC decision capping the rate Quebecor’s cable division can charge its competitors for access to its wiring in multiple-unit dwellings. Quebecor currently has an appeal before Cabinet accusing BCE Inc. of cross-subsidizing satellite TV operator Bell ExpressVu LP. A Part VII application filed last March by VTL, accusing Bell Canada and Bell Nexxia of not providing access to fibre-optic private networks, is still subject to much discussion before the CRTC. "I’m surprised they haven’t sued you yet," one telecom observer joked to Network Letter. Representatives of VTL and Cadillac Fairview did not return phone calls seeking comment on the suit.

Vidéotron seeks $25 million in damages from two Toronto property firms

News | 02/24/2003 5:00 am EST

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