ARCHIVED - Telecom Costs Order CRTC 2002-3

Telecom Costs Order CRTC 2002-3

Ottawa, 13 March 2002

Manitoba Keewatinowi Okimakanak application for costs - Price cap review proceeding

Reference: 8678-C12-11/01 and 4754-196

Background

1.

By letter dated 26 November 2001, Manitoba Keewatinowi Okimakanak (MKO) applied for costs associated with its participation in the proceeding initiated by Public Notice CRTC 2001-37, Price cap review and related issues, dated 13 March 2001 (PN 2001-37).

Position of parties

2.

MKO submitted that it had satisfied the necessary criteria for the award of costs set out in section 44 of the CRTC Telecommunications Rules of Procedure (the Rules). MKO stated that it represents almost 50,000 First Nations people living on- and off-reserve in Manitoba. MKO submitted that the First Nations people it represents had a substantial interest in the outcome of the proceeding, given the importance of improving the quality of service to their communities in northern Manitoba.

3.

MKO noted that it had worked in cooperation with consumer groups to address the issues before the Commission in this proceeding, while minimizing duplication. MKO submitted that through its interrogatories, evidence, cross-examination and argument, it had made a substantial contribution to the Commission's understanding of the issues related to service quality in northern Manitoba.

4.

MKO suggested that MTS Communications Inc. (MTS) was the appropriate respondent for the costs award.

5.

On 7 December 2001, MTS provided a response to MKO's application. MTS stated that it opposed MKO's application for a number of reasons.

6.

First, MTS argued that MKO had not demonstrated that it was eligible for or required an award of costs in order to have participated in the proceeding. MTS submitted that MKO was not a consumer group, but was more akin to the Federation of Canadian Municipalities, in that it "is funded by its member First Nation governments, has an operating budget and sources of funds."

7.

Secondly, MTS claimed that MKO had not participated significantly or contributed through its interrogatories, evidence or argument to a better understanding of the complex issues in the proceeding.

8.

According to MTS, the issues in the proceeding were:

· whether the current form of price caps continues to represent the most appropriate form of regulation;

· proposals on what determinations should be made with regard to the elements of the new price regulation regime;

· proposals on any changes to the current treatment of Utility segment competitor service rates;

· the appropriate treatment of Competitive segment service rates;

· issues related to the calculation of the Total Subsidy Requirement and appropriate treatment of rates in High Cost Service Areas;

· review of Service improvement plans (SIPs) to ensure that the telephone companies meet the basic service objectives including the use of least-cost technology;

· whether the five conditions for forbearance in respect of basic toll services, set out in Telecom Decision CRTC 97-19, Forebearance - Regulation of toll services provided by incumbent telephone companies, dated 18 December 1997, should be modified;

· the appropriateness of including a quality of service component in the price regulation regime, or of other methods such as targeted refunds to customers, to address inadequate service quality;

· the extent to which the telephone companies' adherence to other benchmarks for consumer service, if any (e.g. billing policies, consumer bill of rights), should be linked to the price regulation regime and what form any such benchmarks might take; and

· proposals to revise financial monitoring and information reporting requirements.

9.

In MTS' view, MKO had provided no comment, evidence or arguments that contributed to a better understanding of these complex issues that warrant any costs award in the proceeding.

10.

MTS submitted that MKO's real objective had been to redefine the Commission's basic service objective to include broadband capabilities, which was not an issue within the scope of the proceeding.

11.

MTS claimed that MKO's participation consisted of:

· nine interrogatories to MTS;

· a very limited survey;

· a limited cross-examination of MTS;

· oral and written arguments that were largely identical, and largely emotive; and

· a limited reply argument that included submissions that were not filed in its evidence during the PN 2001-37 proceeding.

12.

On 21 December 2001, MKO filed a response to MTS' arguments. MKO began by noting that it had previously been awarded costs in Commission proceedings and that in those cases, MTS had not raised any concerns regarding MKO's eligibility for costs. MKO submitted that if the Commission found that it was not eligible for an award of costs, MKO would effectively be unable to participate meaningfully in future Commission proceedings.

13.

MKO submitted that it is an association comprised of the elected leadership of 27 First Nations in northern Manitoba. Affiliation with the MKO organization is voluntary. No mandatory fee is required or assessed by MKO as a consequence of affiliation.

14.

According to MKO, its funding is project driven. Under various agreements with specific funders, it delivers services in areas such as health, justice, natural resources and social services. Each project agreement specifies a scope of work and the expected outputs and deliverables. These agreements restrict expenditures and activities to the scope of the funded project.

15.

MKO submitted that the question of whether or not it is a "consumer group" is irrelevant to a determination of whether it is representative of a class of subscribers with a substantial interest in the outcome of the proceedings. According to MKO, it represents the interests of almost 50,000 First Nations people, who have a fundamental interest in improving the quality of telecommunications services in northern Manitoba.

16.

MKO submitted that the fact that it has an operating budget and a source of funds is irrelevant as most groups in receipt of a CRTC cost award would have an operating budget and a source of funds as well as a structure to provide management, operations and accountability in respect of the expenditures of those funds.

17.

In MKO's view, the real question is whether it has sufficient funds to properly prosecute its case. MKO submitted that, since it operates on a razor-thin financial margin and is funded through a series of contribution agreements that strictly limit the use of those funds, it clearly does not have sufficient funds to fully participate absent an award of costs.

18.

MKO dismissed MTS' analogy between it and the Federation of Canadian Municipalities. MKO pointed out that its members do not have the taxing powers or resources of municipalities.

19.

MKO argued that the Commission's findings in Decision CRTC 2001-767, dated

19 December 2001, reflected a number of points raised by MKO in the proceeding.

20.

MKO concluded from this that its intervention was carefully targeted, diligently advanced and largely successful.

21.

A further letter from MTS, dated 23 January 2002, attempted to reply to some aspects of MKO's reply comments. The Commission considers that this letter was out of process and has not considered it in coming to its determinations with respect to this cost application.

Commission determinations

22.

The Commission finds that MKO represents the interests of a class of subscribers - First Nations people living in Manitoba. In the Commission's view, MKO is akin to a consumer group and not a municipality or a municipal association as alleged by MTS.

23.

The Commission notes MKO's submissions regarding its financial position and funding. In the Commission's view, there is no evidence that establishes that part of MKO's budget is allocated or should be deemed allocated toward regulatory activities. The evidence does disclose that MKO's budget is, in the vast majority of cases, contractually required to be spent on specific projects.

24.

Finally, the Commission notes that, while not a definitive factor, the fact that MKO has been awarded costs in two previous Commission proceedings without objection from MTS is significant. These two proceedings concluded with Telecom Costs Order CRTC 96-21, In re: Local service pricing options - Telecom Public Notices CRTC 95-49 and 95-56, dated 14 November 1996, and Telecom Costs Order CRTC 99-11, In re: Service to high-cost serving areas proceeding - Telecom Public Notice CRTC 97-42, dated 1 December 1999. At the very least, the Commission would have expected MTS to provide some rationale for why it has apparently changed its position regarding MKO's eligibility for costs in Commission proceedings.

25.

With respect to MKO's participation in the PN 2001-37 proceeding, the Commission finds that MKO's participation did enhance the Commission's understanding with respect to a number of concerns regarding MTS' SIP and telecommunications service in northern Manitoba, which would not otherwise have been raised. The Commission notes that MKO's participation was of value not only to the First Nations people it represents, but also raised issues of concern to all subscribers in northern Manitoba.

26.

The Commission finds, based on the above, that MKO meets the criteria set out in section 44 of the Rules.

27.

In the Commission's view, given that MKO's submissions were directed exclusively at issues relating to MTS' service in northern Manitoba, MTS is the appropriate respondent to this costs application.

Direction as to costs

28.

The Commission approves MKO's application for costs in this proceeding.

29.

For the reasons set out above, the award of costs shall be paid by MTS.

30.

The costs awarded herein shall be subject to taxation in accordance with the Rules.

31.

The costs awarded herein shall be taxed by Natalie Turmel.

32.

MKO shall, within 30 days of the issuance of this order, submit a Bill of Costs and an affidavit of disbursements directly to the taxing officer, serving a copy on the respondent for costs.

33.

The respondent for costs may, within two weeks of receipt of those documents, file comments directly with the taxing officer in response to the claim for costs, serving a copy on MKO.

34.

MKO may, within two weeks of receipt of any comments submitted by the respondent for costs, file a reply to such comments, serving a copy on the respondent.

35.

All documents to be filed or served by a specific date must actually be received, and not merely sent by that date.

Secretary General

This document is available in alternative format upon request and may also be examined at the following Internet site: http://www.crtc.gc.ca