Pay-per-call operators lose fight over 976 regulations as appeal dismissed by court

A longstanding dispute between the operators of entertainment phone lines and Bell Canada came to an end late last month not with a bang but a whimper when the Supreme Court of Canada rejected a leave to appeal. However, a lawyer involved with the case says that the specific case may be closed but larger questions still remain. The fight has been simmering since 1999, when Bell changed its Accounts Receivable Management (ARM) agreement. The new regime more closely aligned 976 services with Bell’s Advantage 900 service (NL, Nov. 22/99). The 976 numbers are most often used by adult entertainment lines, sports tips and psychic hotlines. The changes allowed Bell to collect deposits, institute content guidelines and impose definitions of conduct. One telephone line operator charged that the telco was seeking to censor material. Lawsuit and R&V filedFirst Media Group Inc., which runs several 976 lines, initially filed a review and vary application with the CRTC in October 1999. The commission dismissed the motion in a letter decision in December of that year. (In April 2002, the CRTC launched a proceeding to look at proposed changes to agreements between telcos and service providers that provide information and entertainment services to consumers through 900-service numbers – Telecom Public Notice 2002-2.) At the same time it filed the R&V, First Media launched a lawsuit against Bell for breach of contract. Bell asked that the suit be dismissed on the grounds that the commission was the more appropriate forum to decide such matters. The judge agreed. First Media appealed to higher courts, arguing that CRTC jurisdiction was restricted to telecom service. This was a business dispute and therefore not subject to commission authority, the firm argued. On March 27, the final avenue closed when the Supreme Court dismissed the leave to appeal with costs. "I suspect the Supreme Court of Canada probably didn’t see it as a strong precedence," Leslie Milton of the Ottawa law firm Johnston & Buchan, which acted for First Media, tells Network Letter. "Maybe they don’t see it as the thin edge of the wedge, but certainly it is a concern if that ruling is followed." First Media not only had to prove there had been a judicial error in the lower court rulings; it also had to establish that the matter was of sufficient national importance to warrant review by the high court. The Supreme Court is accepting fewer cases, Milton notes. She isn’t sure why this appeal was dismissed. "Maybe they weren’t interested, maybe they thought they’ve done enough telecom, maybe they don’t think it’s the right test case to move forward," she speculates. "You just have no idea what they thought. Or maybe they just thought the preceding decisions were appropriate and it wasn’t something they should wade into." Milton still believes there are unanswered questions arising from the clash between the telco and telephone line operator. For example, are all disputes between carriers and their customers to be arbitrated by the CRTC? Does the commission have the right to award damages to a wronged client? In cases involving aggrieved customers, the situation is murkier, Milton maintains, noting that the CRTC has settled some disputes between telcos and subscribers to basic telephone service."The commission has in cases ordered retroactive or going-forward rate reductions," she points out. But there is no indication that the regulator can act in cases involving huge losses. Business clients might want to proceed against a telecom carrier over loss of profit from telco negligence. It has not been established that the CRTC can award appropriate damages, Milton says.

Pay-per-call operators lose fight over 976 regulations as appeal dismissed by court

News | 04/07/2003 4:00 am EDT

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