TORONTO – It’s a years-old Commission file that is over a pretty small amount of money when you consider the size of the companies involved, but Rogers Communications intends on going to court to resolve a six-year old battle over punctuation, contract rights, and paying a million dollars more for renting space on about 100,000 hydro poles in New Brunswick.
This week, the CRTC issued what will probably be its last decision on what’s become known as the “comma case”, effectively dismissing Rogers’ complaint yet again.
With the help of RCI’s EVP regulatory Ken Englehart, we’ll give you the abridged version of events.
Back in 2002, Rogers signed a five-year contract with Bell Aliant to rent space on its utility poles as well as the poles the telco managed for provincial electricity provider NB Power. The contract called for Rogers to pay Aliant the CRTC-regulated rate of $9.60 per pole per year
Then, in 2003, the Supreme Court of Canada (Barrie Public Utilities v. The Canadian Cable Television Association) decided that the Commission did not have the jurisdiction over power poles that it enjoys over telephone poles and that hydro companies were free to do what they wanted.
(Regulation of utility poles was thought of as necessary so that there weren’t three unsightly sets of poles built – one for hydro, one for phone and one for cable, especially since telcos and cablecos sometimes don’t play nice…)
So, in 2004 NB Power did what a lot of hydro companies did and decided to jack up their rates. It terminated its management deal with Bell Aliant and began submitting bills to Rogers for $18.91 per pole in early 2005.
Rogers responded saying it had a contract that didn’t expire until 2007 and that Aliant was bound to honour it.
In response, Bell Aliant went to the CRTC with its grammar textbooks and said thanks to the placement of a certain comma in the contract, that it could be cancelled at any time, with a year’s written notice. The CRTC agreed with that assessment and said the pole contract was over as of February 2006.
Rogers then went back to the Commission with the French language copy of the same deal – where there was no punctuation question – and said that the full five-year contract must be honoured. “We said, ‘no, you can only cancel it at the end of the agreement’,” Englehart told Cartt.ca.
“The comma interpretation made no sense.”
Again the Commission denied Rogers’ review and vary request.
And again, Rogers applied for another R&V, saying that despite the fact it has no say over NB Power, it does regulate Aliant and can set rates, not unlike how the Commission can set rates for cell tower co-locations, irrespective of who owns the land the tower is built on.
“And they said, you’re right, it doesn’t matter who owns the underlying asset, and then they came up with a third completely different legal argument about why we were wrong.”
And that was: As soon as NB Power cancelled their contract with Aliant, then under the terms of the contract “Aliant no longer had a pole, so there was nothing to lease to you,” said Englehart.
“We said, no that’s not true,” and that Bell Aliant could only no longer issue new pole permits. “The existing permits last for the full five years.”
A lease is a lease until the contract is over, said Englehart, “consistent with contractual law.”
So once again Rogers launched a review and vary back to the CRTC. “And once again, I am impressed with their legal department’s interpretations on these various cases… This time they said: ‘we’re not sure we’re wrong, but we think what Rogers is really saying is ‘we want to sue for contractual damages’ – which is what we’re saying – we don’t have jurisdiction but they can go ahead in some court somewhere and sue and that’s fine with us,” explained Englehart.
“It’s not a model of fine legal analysis by the CRTC,” he added, “but we will be suing in court and we will be victorious.”
But why not just pay the bill and walk away, given the amount of money and bother?
“It’s not a huge amount of money for a company our size, but to us it just makes no sense,” insisted Englehart. “The CRTC made an idiotic interpretation with the comma in the first place and every time they reverse themselves and come up with some other equally implausible legal argument.
“The only issue was whether the termination clause allowed them to terminate early. That is now beyond dispute. They were not allowed to terminate early.
“We had a contract that they walked away from. That’s just not right.”
