The cable industry began lobbying for legislative changes even before the Supreme Court of Canada ruled last week that the CRTC did not have the authority to set the rate for cable access to utility poles, says the president and CEO of the Canadian Cable Television Association (CCTA). Janet Yale tells Canadian Communications Reports that the cable industry initiated an early push for legislative changes to the Telecommunications Act as a backup in case it was not successful with its appeal, and says Industry Canada officials are receptive to the request. "Absolutely, we were in touch with Industry Canada before the (court) decision. We've been working with officials for some time. You've got to plan for the worst. We need to get the loophole changed in section 43 (5) of the Telecommunications Act," Yale says. In a ruling released May 16, the Supreme Court decided by a 6-1 vote to uphold a Federal Court of Appeal decision (CCR Update, May 16/03). In 2001, the Federal Court of Appeal ruled that the CRTC, a federal institution, did not have the jurisdiction to set the rates charged by provincially regulated utility companies for cablecos and telcos to access their poles (CCR, Aug. 2/01). The court questioned the CRTC's claim that utility poles are transmission lines and subject to federal jurisdiction. Yale calls the Supreme Court decision both good and bad, noting that constitutional issues raised in the case were not ruled on. "What they simply said was the legislation as currently drafted did not allow the CRTC to set rates for access to electricity utility poles. And in fact one of the dissenting opinions gave direction in effect as to the kind of wording changes to the legislation that would pass muster," she says. Yale adds that the CRTC is the body that should be the adjudicator in disputes over fees paid for access to poles for a couple of reasons. "First, pole rates should be set in one place, so a mixture of different rates for different regions doesn't emerge. Second, the CRTC has the expertise to set those rates," she notes. The lone dissenting judge, Justice Michel Bastarache, agreed and stated that the CRTC's expertise in technical matters deserves special attention. "An expert tribunal interpreting a technical provision of its enabling legislation is entitled to some deference," he wrote. He later added, "If a tribunal has been constituted with a particular expertise with respect to achieving the aims of an Act, whether because of the specialized knowledge of its decision-makers, special procedure, or non-judicial means of implementing the Act, then a greater degree of deference will be accorded." That, however, was not the opinion of the majority. Justice Charles Gonthier, writing on behalf of his colleagues, stated, "The CRTC's heavy reliance on the policy objectives of the Telecommunications Act and the Broadcasting Act was in error. The consideration of legislative objectives is one aspect of the modern approach to statutory interpretation. Yet the CRTC relied on policy objectives to set aside Parliament's discernible intent as revealed by the plain meaning of section 43 (5), section 43 generally and the Act as a whole." The utility companies hailed the decision, which states the CRTC had gone beyond its jurisdiction in mandating an annual rate of $15.89 per pole, far less than the $40.53 rate requested by the utilities. The Canadian Electricity Association (CEA) tells CCR that it is electricity distribution companies that are best suited to develop and oversee standards for utility pole attachments, expertise that does not exist within a body such as the CRTC. The Electricity Distributors Association (EDA), which represented a group of Ontario utilities in the case, notes that the rate set by the CRTC did not take into consideration maintenance or fixed costs associated with the poles, nor the costs associated with the attachments. As a result, the EDA argued that the utility companies were subsidizing the cable companies. The group of Ontario utility companies has been without an agreement with local cable companies since Dec. 31, 1996. With the Supreme Court decision, they will no longer have to abide by the rate set by the CRTC, which means cablecos could see the rates they pay to access utility poles skyrocket. A media release issued May 16 by the EDA hints that protracted negotiations lie ahead as utilities seek a higher rate. "The rates imposed by the CRTC simply did not reflect the real costs incurred by LDCs (local electricity distribution companies) to share access to their support structures," EDA CEO Charlie Macaluso says in the release. "In effect, (the) Supreme Court ruling means electricity consumers will not have to subsidize cable companies." EDA chair Ed Houghton adds, "Now that we have this decision, we can move towards rates which are fair to both cable customers and the electricity customers." Yale says it's still too early to say whether the rates that cablecos pay will rise, while adding that small cablecos will likely be hurt the most by the Supreme Court decision. In any case, any legislative changes, if they do come, could be a long ways off as the never-speedy legislative process would likely be further stalled by the upcoming Liberal leadership convention. In the interim, Yale says the cable industry is prepared to turn to provincial regulation boards for guidance if negotiations with any utility company become a stalemate. "That's the last course of action. The best course is to come to agreed terms. But we would consider all options, including going to such boards as the Ontario Energy Board," Yale notes. One of the lawyers working on behalf of the utilities on the case thinks the deference provisions of the decision could be precedent-setting. Peter Ruby of Goodmans LLP says the Supreme Court has decided that the CRTC and other tribunals cannot use policy provisions to infer powers. Jurisdiction must be conferred by legislation. "It doesn't change the powers of the CRTC at all. And it doesn't change the theory of the way the law looks at tribunals," he says. "But I think it'll be interesting going forward because the CRTC does not get overturned by the Supreme Court all that often. So that may have some repercussions down the line." Yale argues that legislative changes are necessary in order to ensure the integrity of the system. "We've always known that the statutory language was at risk. We're hopeful that they'll be able to move very quickly because it's quite a simple legislative amendment that's necessary to close this loophole. And at the end of the day, the federal government and the CRTC, I think, have a big interest in ensuring the integrity of the regulatory scheme."