Telus, Iristel, say administrative monetary penalties don’t apply in 867 dispute

The CRTC cannot impose fines on either Iristel Inc. and Telus Corp. after the regulator found the companies have violated the Telecommunications Act in a long-running dispute over calls to the 867 area code, according to arguments from both companies filed with the commission last week. The replies, dated Jan. 17, are a response to a call for comments issued by the commission in Aug. 2020, asking the public whether a financial penalty was appropriate for the companies. In its filing, Telus argued that because it "exercised due diligence in taking action to protect itself" against Iristel's traffic stimulation, the company is therefore not liable for an administrative monetary penalty (AMP). “Telus’ actions… were taken to protect Telus from harms flowing from another carrier’s contravention of the act,” the incumbent wrote in its reply submitted last Monday. “In protecting itself, Telus employed limited, measured actions, designed to have minimal impact on third parties.” Even though the regulator found that Telus violated the act by reducing trunk capacity between it and Iristel customers – which caused some calls to drop – the company's efforts at mitigation and due diligence makes it immune from the fine, Telus maintains. "The defence of due diligence is available even when the actus reus of the violation has occurred," Telus wrote in last week's filing, pointing to Sec. 72.15(1) of the Telecommunications Act. “It is common, and indeed required, for parties to disputes to take reasonable action to mitigate their losses while disputes are in the process of being resolved by courts or tribunals. It is well established that a plaintiff will not be able to recover for losses that could have been avoided,” it argued. Telus suggested that the commission should instead require the company to submit periodic reports pertaining to its compliance with the Telecommunication Act or that it make financial commitments. Telus further argued that, should the commission decide to impose a penalty, its AMP should be minimal because it was a single instance of non-compliance. “Not all contraventions are the same, and Telus’ contravention in this case is not the kind of deliberate malfeasance that might properly attract an AMP,” it wrote. The commission issued the consultation concurrently with a decision in which it found Iristel granted itself an undue advantage by allowing the use of 867 numbering plan area (NPA) telephone numbers by certain customers based in distant locations, thus increasing the connection costs for other carriers. The 867 area code covers Canada’s three northern territories. In its 2020 decision, the company also found that Telus “deliberately” discriminated against Iristel and its subsidiary Ice Wireless, their customers, and Telus’ own customers, by reducing the capacity of certain toll circuits, and the ability to complete calls in the 867 NPA. The CRTC’s preliminary view is to fine both companies in the range of $750,000 to $1.25 million. Meanwhile, Iristel is arguing that imposing AMPs would be “unlawful because there is no statutory authority for it.” Iristel noted that the commission’s own AMP rules, under 72.003 of the Telecommunications Act, stipulate that the CRTC may impose the monetary penalty through the issuance of a Notice of Violation, as part of an undertaking, or in the course of a proceeding. “In other words, this language makes it unequivocally clear that the imposition of a penalty must occur in the same decision in which the contravention giving rise to the penalty is found. That is not what the commission is proposing to do in this proceeding,” Iristel argued. The company argued that the commission is now functus officio, a term used when officers no longer have authority over a previous proceeding because their duties are accomplished. Iristel further argued that even if the commission had statutory jurisdiction it would still be “a fundamental breach of the duty of fairness” that the commission owes to Iristel. Section 72.004 of the Telecommunications Act stipulates that the commission “may designate a person, or class of persons, that is authorized to issue notices of violation or accept an undertaking,” which Iristel said the commission has not designated for its general AMP regime which has been in effect for seven years. “Had such designations existed during the period , there would have been opportunities for Iristel to engage with designated individuals to attempt to reach a resolution of the commission’s concerns regarding Iristel’s use of 867 NPA numbers without escalation to consideration of the levying of an AMP,” it argued. Finally, Irsitel noted that AMPs are meant to enforce compliance and not meant to punish carriers. In a separate intervention, dated Jan. 17, the Public Interest Advocacy Centre (PIAC) made a similar argument to the CRTC saying AMPs “would unnecessarily cause fear and regulatory uncertainty in the industry and not serve any effective purpose, either for general or specific deterrence.” The 867 dispute began in Nov. 2016 when Rogers Communications Inc. accused Iristel of engaging in traffic stimulation by driving up the volume of phone calls to the Northwest Territories in order to benefit from the area’s high traffic termination rates. A year later, the regulator ordered Iristel to cease the use of 867 area code numbers to connect callers to a Toronto-area radio station audio stream. In Aug. 2018, Telus and Iristel filed a pair of Part 1 applications with the former alleging that Iristel had resumed stimulating traffic shortly after the Dec. 2017 decision. Iristel, a few days later, alleged that Telus was deliberately causing some calls from Telus users to Iristel end users to fail. The regulator issued an interim decision in Nov. 2018, requiring Telus to ensure calls between both companies were completed. It also set an interim rate for calls to and from Iristel’s operating territory at $0.038 per minute. In its final 2020 decision the commission cut Iristel’s long-distance termination rate retroactively – dating back to Nov. 23, 2018 – by 74 per cent, from $0.038 per minute to $0.0098125 per minute. Both Iristel and Telus opposed the CRTC’S final Aug. 2020 decision for different reasons – in a pair of review and vary applications – which the regulator ultimately upheld in Dec. 2021. It also reopened the consultation on what level of fine the two companies should pay, if any. The latest development in the long-running dispute is that Iristel is now asking the Federal Court of Appeal to overturn the regulator’s decision in an application for leave to appeal filed last month. — With reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca.

Telus, Iristel, say administrative monetary penalties don’t apply in 867 dispute

News | 01/24/2022 7:05 pm EST

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