By Ahmad Hathout
OTTAWA – Canada’s largest telecoms are telling the Supreme Court of Canada a lower court fumbled a decision in favour of lower wholesale rates by attributing a line of reasoning that was allegedly never made by the CRTC, abrogating its responsibilities to review the correctness of the regulator’s decision.
That line of reasoning is based on how the CRTC structured its decision in the summer of 2019, when it ordered a lower rate at which smaller telecoms pay for and sell bandwidth from the larger telecoms. At issue in front of the Federal Court of Appeal was whether the CRTC adequately explained how its decision addressed policy objectives outlined in Section 7 of the Telecommunications Act and the 2006 policy directive from cabinet, which requires it to rely on market forces in making decisions. The incumbents have argued that lower wholesale rates would mean less incentive to invest in networks.
TekSavvy and the Competitive Network Operators Consortium (CNOC) argued, and the appeal court agreed, the CRTC made its reasons clear by adopting a holistic method — where its line of thinking can be drawn from a section underneath the decision that includes links to past decisions. Situated in its broader context, the decision addresses the policy objectives and the 2006 policy directive, the third party internet access providers say.
In their response filed on December 14, however, the incumbents, including Rogers, Cogeco, Shaw and Bell, said the term “context” isn’t a “magic word” and allege the CRTC didn’t situate the decision in a broader context. Instead, the appeal court “cobbled together its own policy narrative from a largely disconnected list of prior CRTC orders and decisions in order to purportedly explain why the CRTC adopted specific regulatory measures,” their response read, adding the third-parties have failed to mention another case in which a court upheld a decision on such reasoning.
They allege the CRTC did not “conduct or articulate any such policy-driven analysis…explain why it was appending to its Decision a list of 16 historical documents…or even suggest that that list addressed the manner in which the Decision supposedly advanced the policy objectives [in Section 7 of the act].”
The incumbents also argue the appeal court did not address the correctness of the decision by the CRTC, as required by the Supreme Court’s Vavilov decision, which extends a court’s discretion to review an administrative body’s decision beyond just its reasonableness (as determined by its independence as a administrative body). The incumbents say the lower court’s appeal to context in this case allegedly did not address the CRTC’s statutory obligation under the 2006 policy direction to explain how it fulfilled its telecom policy objectives.
In November, the incumbents filed their Supreme Court request to challenge the appeal court’s September decision. In a three-part argument, they said they want more clarity on the level of transparency required in such decisions as per Vavilov, as well as more guidance on how a reviewing court should be looking at the implementation of policy directives.
In December, lawyers for CNOC and TekSavvy filed a response to the leave to appeal application stating these arguments not only have no merit, but they also don’t rise to the level of national or public importance needed to be tried at the highest court in the land. They said the appeal application should therefore be denied.
In their December 14 response, the incumbents said the issue at hand has broad implications that impacts telecommunications for all Canadians and therefore is a matter of national and public importance.
The large carriers also took a shot at the third-parties’ claim that they make similar investments to the incumbents and that they would cover for any reduced investments on the part of the incumbents, suggesting that the claim “flies in the face” of the “reality” that the the bigger carriers sink “tens of billions of dollars” in Canada’s wireline networks.
