MTS confused by two CRTC MAA rulings, considering appeal alternatives

MTS Allstream Inc. says it is confused by two recent CRTC decisions that deny the aligning of municipal access arrangements (MAAs) the company has with the cities of Toronto and Calgary with principles set out in the landmark Ledcor ruling (Decision 2001-23). Describing the recent rulings as "kind of barren of logic," Chris Peirce, executive VP of government and regulatory affairs at MTS Allstream, can’t understand why the commission is ignoring the Ledcor principles. In two applications filed in May 2001 and June 2002, AT&T Canada Corp., predecessor to MTS Allstream, requested the commission align the Toronto and Calgary MAAs with principles set out in Ledcor. That decision set out the CRTC’s jurisdiction regarding rights-of-way issues and ruled that cities aren’t allowed to charge an "economic rent" or make profits from rates charged to telecom providers. Decision 2001-23 only allowed cities to collect casual costs associated with telecommunications infrastructure builds (NL, Jan. 29/01). This, according to Peirce, means that other municipal access arrangements should be aligned with the principles set out in Ledcor. But the CRTC noted in two decisions (Telecom Decision 2005-46 and Telecom Decision 2005-47) that MetroNet, another predecessor to MTS Allstream, understood the terms of the MAAs with the two cities, ruling that the terms and conditions of the original agreement would stand. Citing the lack of action on MetroNet’s part objecting to terms of the MAAs, the commission noted this demonstrated the company’s acceptance of the MAAs. As a result, the CRTC concluded that it didn’t need to exercise its authority and intervene in the two cases. "The commission is of the view that, given the expertise and experience of its negotiating team, which included lawyers, expert consultants and its management team, MetroNet knew or ought to have known of the extent and the scope of the agreement and its potential impact on MetroNet and its successors," reads the decision denying the Toronto application. The statement echoes a similar assessment made in the Calgary decision. Peirce, however, doesn’t buy the commission’s analysis and says MetroNet had little or no choice but to accept the Toronto MAA or risk losing potentially important market share in the then-recently opened local telephone market. "I think it is untenable, frankly, to say that a company like MetroNet entering the market in 1997 or 1998 would have had the ability to put its facilities construction on hold for three or four years while it fought a CRTC ruling on access…It’s ridiculous," he tells Network Letter. If operating in a facilities-based paradigm is going to continue, then there has to be allowance for competitors to gain access to municipal property and rights-of-way to build facilities as set out by Ledcor, explains Peirce. MTS Allstream has existing MAAs with several cities across the country, covering all potential future network builds or infrastructure deployments within the city. "We want the ability to be able to forge an agreement with a city that gives us the ability to do builds whenever and wherever that works in terms of the business," states Peirce. Problems surrounding MAAs can be boiled down to two key issues: competitive providers want general agreements giving them access to municipal rights-of-way and property when and where they need, while cities want to proceed on a case-by-case basis for specific locations; and telecom providers will pay cities’ costs for digging up streets for example, while cities want to collect an economic rent or rates they deem to be appropriate. Municipalities have, since the Ledcor decision more than four years ago, continued to fight for the right to set their own rates for access to rights-of-way. After the Supreme Court of Canada refused to hear an appeal by the Federation of Canadian Municipalities regarding Ledcor, cities have recently started to negotiate agreements for specific locations, bogging down the process. MTS proposes solutions Peirce also believes there could be a political element to the municipal access arrangement issue right now given the municipal funding issue front and centre lately, and the fact that the Telecommunications Policy Review Panel is studying a future role for the CRTC. "They’re worried about what the government is going to do with their authority; they’re worried about the noise around municipalities generally…and what it might mean for their future if they stick a finger in there at this point," he says. As a potential solution to the ongoing municipal rights-of-way issue, the company, along with a group of other competitive providers under the guise of the Coalition for Better Competition, proposed to reconfirm the CRTC’s jurisdiction with respect to rights-of-way and municipal property by amending portions of section 43 of the Telecommunications Act. Peirce believes the commission to already have the authority under the Telecommunications Act, but "if the CRTC is concerned about the clarity of its jurisdiction to do so then certainly we think that’s a pretty easy amendment to the Act." MTS Allstream is currently considering its next move in wake of the decisions, Peirce says. "We’re going to review what our options might be in terms of an appeal, but certainly disappointed in the unwillingness of the commission to take what think is pretty clearly the next logical step to a series of decisions," he states.

MTS confused by two CRTC MAA rulings, considering appeal alternatives

News | September 1, 2005

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