Bell cutting investments does not constitute irreparable harm, court said
By Ahmad Hathout
The Federal Court of Appeal will hear Bell’s arguments challenging a decision by the CRTC to allow competitors to ride on its last mile fibre network, but stopped short of immediately suspending that decision until it deliberates on the matter because it is not convinced that the telco will suffer irreparable harm if a stay is not granted.
The CRTC ordered in November that Bell and Telus provide on a temporary basis access within six months to their last mile fibre facilities in Ontario and Quebec on an aggregated basis, which allows competitors to also bundle the traffic transport mile from the same telcos.
The regulator reasoned that competition to serve the faster speeds provided by a direct fibre line to the premises has diminished in those areas. It said it will reevaluate whether that regime should be a permanent fixture when it completes its wholesale internet review, the hearing of which begins Monday.
Bell claims the CRTC erred both in how it reached that decision, which is the legal basis for its challenge at the Federal Court of Appeal, and in how it will affect its business – namely, that it allegedly will lose customers and revenue, will incur unrecoverable implementation costs, and will have to delay or cancel other projects. It carried the latter argument to cabinet.
While the appeal court did not provide reasons Friday as to why it will hear Bell’s overall challenge, it provided reasons why it won’t immediately suspend the CRTC’s decision until that hearing runs its course: because it “failed to substantiate that these harms are irreparable with the necessary degree of convincing particularity,” the court said, pointing to the “irreparable harm” portion of the three-part legal test – everyone of which must be met to be granted a stay.
“Bell provides no evidence, documentary or otherwise, detailing how or why it is likely to permanently lose customers or revenue,” the court said. “Although the [Senior Vice President of Technology Services Anuja Sheth] affidavit refers in passing to estimated and hypothetical losses, the affiant provides little, if any, basis to support the amounts or effects alleged.”
The court also said that the Sheth affidavit failed to convince it that the CRTC couldn’t just adjust the interim access rates to allow Bell to recoup its costs in the event the regulator does not permanently mandate aggregated last mile access for competitors.
Within hours of the CRTC’s decision to mandate that last mile fibre access, Bell announced it was cutting over $1 billion in fibre spending, citing the decision. It also said it was slowing its fibre rollout in its footprint and capping its top speed offering at 3 Gbps.
But the Federal Court of Appeal argued the decision to cut its investments was a business choice.
“Bell’s own choices to redirect or cut its investment dollars do not constitute irreparable harm, but rather a business choice that it appears that it has chosen to make in light of the Decision,” the court said in denying Bell’s irreparable harm argument.
“In the absence of evidence showing how implementing the temporary mandated access would imperil Bell’s continued existence, I fail to see how making the investments required to implement the Decision instead of others could constitute irreparable harm.”
Bell’s application was challenged by TekSavvy, Quebecor, and the Competitive Network Operators of Canada – a rep for independent telecoms.
Bell will argue that the CRTC made an error when it used its policy authority to grant mandated access to the last mile facilities, allegedly deviating from the standard three-part legal test. The telco also alleges the regulator – which has said it has administrative latitude to make decisions to accomplish telecom policies – did not provide proper notice that it was going to move away from that test.
On its fourth-quarter earnings call Thursday, Bell CEO Mirko Bibic said “unsupportive” government policies factored into why it is cutting 4,800 positions across the company and selling more radio stations.
Bell has also blamed the CRTC for not providing immediate relief to broadcasters’ conditions of licence when it comes to Canadian content spending or how they are allowed to spend their money.
