Not of national importance
By Ahmad Hathout
OTTAWA – The Competitive Network Operators Consortium (CNOC) and TekSavvy say the incumbent telecoms have not demonstrated a case of national or public importance to be tried at the Supreme Court of Canada after applying for a review of the wholesale internet rate case.
In September, the incumbents’ appeal to the Federal Court level challenging how the CRTC came to its August 2019 decision to chop the final wholesale rate, which determines how much third-party internet service providers pay to buy space on the incumbents’ networks, was dismissed. Among the incumbents’ complaints was the decision did not provide adequate transparency with respect to how the regulator came to its determination, which the appeal court rejected.
The incumbents are using the Supreme Court’s Vavilov decision from last December as one springboard. The Vavilov decision — one of two that included a review of the CRTC’s decision banning simultaneous substitution for the Super Bowl — gave the courts broader scope when reviewing decisions of an administrative body: it’s not just about interpreting the reasonableness of a decision, but it’s also about the correctness of the decision and its reasoning.
In a three-part argument, the incumbents 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 — which they allege the CRTC did not fully embrace when it made its August 2019 decision.
This month, 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 are asking the court to deny giving the appeal any time.
The independents also argue there’s no need for the SCC to clarify Vavilov because the appeal court already clearly and carefully went through the CRTC’s decision and reasoning and that the regulator had already addressed at least some of the policy objectives.
“The Cable Carriers’ attack on the Federal Court of Appeal’s decision instead consists of general, sweeping criticisms and allegations that the decision upends administrative law,” CNOC’s submission said. “None of these criticisms and allegations withstand any scrutiny under Vavilov.”
Part of the incumbents’ argument hinged on the method the CRTC used to lay-out its reasons and references in the wholesale, as well as other, cases: at the end of its decisions, in breadcrumb-like format, it lists the past policy decisions it drew on in a subsection called “related documents.”
During the appeal court hearing, one judge noted the reasoning and the related documents section would make for a comprehensive record.
CNOC and TekSavvy argue that the appeal court read the CRTC’s decision record as a fulfilment of the Vavilov principles.
The incumbents had 60 days plus a two-day Covid extension to challenge the federal court of appeal’s September 10 decision, and they did on deadline November 12.
The regulator’s decision was already more than three years in the making, after it set interim rates in 2016 with the stated intention to return after it completed an extensive review of the costs to buy network space with the aim to balance competition and investment in networks.
The incumbents raised a number of issues before the Federal Court of Appeal, including allegations the CRTC set new rates based on inadequate and unexpected methods, robbing them of fairness; didn’t consider evidence presented by the incumbents; and ultimately didn’t balance its policy objectives required by a Cabinet direction from 2006 requiring a reliance on market forces to the maximum extent possible. All were denied by the appeal court.
Last year, the Liberal government provided a companion directive that stated the CRTC should also consider all options for enhancing competition, but that directive would not replace the 14-year-old one, just augment it.
In late September, the CRTC granted a stay of the unapplied wholesale rates until it made its final determination on the tariffs.
By then Cabinet, which exclusively looked at the policy side of the issue, had already weighed in. It said it believes that in some instances the lower rates would impact investments, but it did not send back the decision to the CRTC because the latter was already relooking at the case.
There is no word yet when the CRTC might announce a decision the Review and Vary filed by the incumbents over the original decision.
