CRTC tells Bell and PWGSC to reach to DND contract arrangement

The CRTC warned both Bell Canada and Public Works Government Services Canada that if they don't reach an agreement on the Department of National Defence's network impasse by January 27, it will impose one. Commission chair Konrad von Finckenstein made the statement in his closing remarks to the public hearing, held last week. "If you do not settle it one of you is going to lose everything because the effect of our judgment will be that it will be one or the other bookend," he told both parties, referring to the respective offers on the table. "You know what they are, I don't have to mention the figures publicly because it would be betraying confidential, but you know them full well down to the dollar," von Finckenstein added. The January 22 hearing, some of which was public while another was held behind closed doors, revealed that both parties are far apart when it comes to settling on a dollar figure for DND's continued use of Bell's network. Despite this, the commission believes the two sides can come to an arrangement. "It strikes all three of us that this is an eminently settleable case having had the benefit of today's hearing, having all the facts on both sides," said von Finckentstein, referring to the panel's other two members, telecommunications vice-chair Len Katz and Ontario region commissioner Rita Cugini. Bell and the government faced off before the CRTC last week with the telco arguing that the regulator shouldn't get involved in what is strictly a commercial contract dispute. On the other hand, PWGCS contested this assertion, noting that the commission has the authority to intervene in the matter. The public hearing stems from a PWGSC Part VII application seeking an order from the commission establishing just and reasonable rates for telecom services provided by Bell to DND during a short-term while DND transitions its services to Telus. The CRTC was hearing the case to first of all determine if it had the jurisdiction to intervene in the matter and then, if so, set the terms of a contract between Bell and DND. Arguments on the jurisdiction aspect were open, while the confidential aspects of Bells' deal and its impact on DND were debated in secret. With the commission threatening to impose a solution on both parties, it seems as the CRTC has already settled the issue of whether it has the authority to intervene. This is a blow to Bell, which argued vehemently that the commission didn't have the right to get involved in this matter. Throughout the hearing though, Bell was steadfast in its opinion that the commission should stay out of commercial contract matters. "It's not the commission's role, and I say this respectfully, to impose a compromise solution which DND or its current network supplier Telus may consider to be more fair, more just or more reasonable," Mirko Bibic, senior VP of regulatory and government affairs, told the three commissioners. "The real issue on jurisdiction is there is no binding obligation or regulatory rule that would require us to offer any arrangement we do not want to offer other than that five-year CSA." Bell also warned the commission of the potential negative impact a ruling in favour of Public Works would cause. "If the application were granted it would set a rather unfortunate precedent and would send the wrong signals to customers in the future as well as suppliers in the future," Bibic said. PWGSC counsel Leslie Milton told the commission panel that it certainly has the authority to intervene in this case. "If the commission has the jurisdiction to approve an increase in the rates set out in the approved CSA then Public Works submits that the commission must have jurisdiction to amend those terms where it determines that they are not compliant with section 27 of the Telecommunications Act," she said. Milton later added under questioning that it's an all or nothing scenario when it comes to the CRTC's authority in this matter. "I don't think your jurisdiction is half way. Either you have jurisdiction over the services or you don't," she said. Network Letter will follow up on this issue after the two parties appear before the commission on January 27.

CRTC tells Bell and PWGSC to reach to DND contract arrangement

News | 01/26/2009 5:21 pm EST

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