In rendering its determination in Teksavvy’s appeal of the CRTC’s 2021 reversal of its original 2019 wholesale internet rates, the Federal Court of Appeal delivered a sound rejection, with costs. The decision is quite readable and I encourage you to take a look.
For newcomers to this lengthy saga, there were major problems with the 2019 decision as I wrote at the time. The CRTC’s 2021 corrections to its flawed 2019 rate setting rekindled a wave of investment.
The final rates triggered a brutal Teksavvy response, including personal attacks on the CRTC Chair and a judicial appeal of the CRTC decision. I had a blog post in 2022 that looked at “Misquotes and mischaracterizations” that were part of the appeal.
The Court writes it has limited powers for its review of a CRTC determination.
Rate-setting and how to go about rate-setting are matters of discretion and policy founded on industry appreciation and specialized technical study—matters resting at the very core of the CRTC’s exclusive jurisdiction under the Telecommunications Act. They are something very much in the wheelhouse of the CRTC and are alien to us. For the most part, as an appeal court, we mainly handle matters of law and related matters such as procedural fairness. For the most part, we do not decide the merits of matters, especially those that draw on industry appreciation and specialized technical study.
The Court noted that ‘“Skilful pleaders” who are “armed with sophisticated wordsmithing tools and cunning minds” can express grounds in such a way as to make them sound like legal questions “when they are nothing of the sort”’.
In this appeal, Teksavvy gamely offers a number of grounds for setting aside the CRTC’s rates decision and phrases them as legal issues to get past the limitation in subsection 64(1). However, in my view, Teksavvy’s real concern is disagreement with the policy adopted by the CRTC and the discretion it exercised in setting the rates, matters that we are powerless to address.
On the issue of the CRTC Chair bias, the Court had much to say. Teksavvy complained that the CRTC Chair had publicly stated a preference for facilities-based competition. Further, Teksavvy filed evidence of the CRTC Chair having drinks at an Ottawa bar with the head of regulatory affairs for Bell during the review of the 2019 rates decision.
As to the facilities-based preference, as I have written before, the Court declared “this complaint has no merit”:
The Chair was doing nothing more than setting out the longstanding and frequently expressed policy position of the CRTC in general terms. As the Chair of a high-profile regulatory body, it was appropriate for him to communicate the policies of the regulator, as had been adopted in CRTC decisions and notices. Such communication can be constructive and in the public interest
In respect of the drinks, the Court says “that on different facts and circumstances could indeed be problematic.” However, the Court said “For a number of reasons, this allegation of bias fails.”
Teksavvy knew about the drinks at the bar but did nothing about it until after the decision went against it.
Knowing about the Chair’s meeting with the senior officer of Bell Canada while the rates applications were pending, Teksavvy did not raise the issue with the CRTC. Instead, it kept the issue to itself until the CRTC released its decision, a decision that went against it.
It is trite law that a party that knows of a procedural flaw, defect or irregularity with an administrative process must raise it with the administrative decision-maker as soon as reasonably possible. Failure to do so constitutes waiver of the flaw, defect or irregularity. It cannot be raised in a judicial review or a statutory appeal of the administrative decision.
The judicial decision says:
it is unseemly for a party to notice that a mistake or oversight has been made and then hide in the weeds, ready to pounce should the case go against it. Such a party has no real interest in correcting the mistake or oversight but rather wishes, for tactical reasons, to take out some insurance against an adverse result. Our administrative law never rewards purely tactical behaviour that benefits a party to the detriment of the larger public interest or the proper administration of justice.
Thus, as Teksavvy did not raise the issue of this meeting while the CRTC was still considering its rates decision, it cannot raise the issue in this appeal.
That isn’t to say that the Court ignored the bar room meeting. The Court acknowledged that CRTC policy suggests that a senior Commission staff person likely should have been present. CRTC policy recognizes the benefits of the regulator meeting with those companies it regulates, but it also offers some ways the risks can be mitigated.
Three years later, all of the appeals of the 2021 wholesale internet access rates have been exhausted, with the Federal Court of Appeal delivering a sound rejection to Teksavvy.
We reached closure on this chapter, just in time to trigger a new wave as the CRTC prepares to release its final determination on disaggregated wholesale high-speed access services including fibre to the home.