TekSavvy wants to take fight over 2021 wholesale rate decision to Supreme Court

TekSavvy Solutions Inc. is looking to the Supreme Court of Canada for an assist in its efforts to fight the CRTC’s reversal of a decision that would have slashed wholesale access rates for competitor internet providers. The dispute began in 2019 with a CRTC decision that significantly lowered the rates that large telecoms could charge smaller competitors like TekSavvy for access to their networks. The move was meant to foster competition and reduce prices for consumers, but major telecom companies — including BCE Inc. — challenged the decision, arguing that the rates were unsustainable. The CRTC issued a new decision in 2021, reversing the 2019 order and permanently setting wholesale rates to a higher interim rate established in 2016. TekSavvy, negatively affected by the reversal, took the CRTC to court arguing that its decision was legally flawed and procedurally unfair. The company also accused then-CRTC chair Ian Scott of being biased towards Bell, citing a controversial private meeting between him and the telecom’s CEO Mirko Bibic. In its 2021 appeal, TekSavvy said it had “legitimate expectation” that the CRTC would conduct a new costing exercise in establishing the revised rates. But the Federal Court of Appeal backed up the CRTC’s approach in a July 2024 decision, when Justice David Stratas found that the CRTC is empowered to set rates using any method or technique it considers appropriate. Now, TekSavvy is renewing its argument that in making its 2021 decision, the CRTC did not use a discernible method or technique — “instead, the CRTC reverted to admittedly flawed interim rates from 2016, which were adopted temporarily prior to a review and rate-setting process, to set the new final rates,” the company states in its application for leave to appeal to the Supreme Court. TekSavvy hinges its request to the Supreme Court, in part, on its argument that there needs to be a determination on the meaning of the words “any method or technique” in the Telecommunications Act. The section of the act in question orders that the CRTC must set “just and reasonable” rates for telecommunications services, and to determine those rates it can use “any method or technique it considers appropriate.” In evaluating TekSavvy’s arguments, Justice Stratas “endorsed the CRTC’s approach, interpreting ‘method or technique’ in a virtually meaningless manner that effectively removes the statutory guardrails on the CRTC’s rate-setting obligation,” TekSavvy argues. More specifically, Stratas found that a “method” is “just a way of doing something” and a “technique” is nothing more than a “particular way of doing something,” TekSavvy notes. In its application to the Supreme Court, TekSavvy alleges that such a “broad, limitless interpretation” of the two words “casts the telecommunications industry into a state of regulatory uncertainty.” The telecom believes the higher court’s determination on their meaning and scope is necessary to make sure the CRTC and other decision-makers are setting just and reasonable rates. The company also argues that guidance from the Supreme Court is necessary to determine whether the CRTC’s discretion to set rates “truly extends” to doing so without a set-out, “articulable” method or technique in coming to its decisions. Without getting clarity from Canada’s highest court, it would be impossible for the telecommunications industry to decide where to spend money and invest, or how to present that work to the CRTC for review, TekSavvy argues in its application. “This compromises the ability of to provide internet services to Canadians. It also frustrates the objectives of the , which are overwhelmingly geared toward developing more reliable, affordable and accessible telecommunications services across Canada,” TekSavvy alleges. The company points to another case in which the Federal Court of Appeal granted Rogers Communications Inc. leave to appeal the CRTC’s decision setting rates for mobile virtual network operators, in which it notes Rogers “decried” the “policy ‘black box’” of the CRTC’s rate setting, arguing the process had become a “purely policy-driven exercise.” TekSavvy is also once again raising its accusations against former CRTC chair Ian Scott, alleging he was biased towards Bell during the CRTC’s decision to revert the rates, citing a controversial private meeting between him and the telecom’s CEO Mirko Bibic. The Federal Court of Appeal had dismissed TekSavvy’s allegations of bias against Scott. Public comments made by Scott, cited by TekSavvy, were general expressions of the CRTC’s policy position, not personal bias — even if they were, the comments were made before the CRTC issued its 2021 decision and TekSavvy failed to object to them in a timely manner, which further undermined its claims, the judge found. Stratas noted again that, even if the meeting was a concern for TekSavvy, it should have raised the issue during the regulatory proceeding and not kept it to itself until the CRTC released its decision, a decision that negatively affected TekSavvy. “If the issue matters to a party—and is not merely trivial—and if it has arguable merit, one would expect that a party would raise it as soon as reasonably possible,” he wrote. But TekSavvy tells the Supreme Court that it brought up its allegations of bias as soon as it could have. The company concludes it is appropriate for the Supreme Court to step in to determine what Canadian law means in stating that allegations of bias should be raised at the “earliest practical opportunity,” as it is “not clear what that phrase means in these circumstances.” “The decision encourages parties to advance allegations of bias before confirming all the facts. Parties should be encouraged — not discouraged — to ensure adequate proof exists to support an allegation of bias,” TekSavvy argues. When asked for comment on the matter, a spokesperson for the regulator said: “as this matter is before the Supreme Court, it would be inappropriate for the CRTC to comment.” hdaley@thewirereport.ca With files from Phalen Tynes-MacDonald

TekSavvy wants to take fight over 2021 wholesale rate decision to Supreme Court

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By Hannah Daley
| October 10, 2024

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