Last night’s Cabinet directive on the CRTC’s wholesale fibre decision (2023-358) may show signs of tangled up regulatory processes.
Ted Woodhead has a good review of the issues that were under review and the likely resolution. As an aside, if you don’t already subscribe to his blog, you should.
As Ted writes,
In an after hours announcement Minister Champagne directed the CRTC to reconsider its earlier decision to mandate High Speed Access resale allowing the large incumbents Bell, Rogers and Telus to resell each others’ FTTH services in Ontario and Quebec.
Of course the Minister couldn’t just say that, he first had to deny the Bell Petition that would have rescinded the wholesale decision altogether or vary it on his motion. Rather than do that himself, the Minister referred it back to the CRTC to *ahem* reconsider.
Ted’s blog post discusses the issues motivating the review, so I won’t get into that aspect of the Cabinet determination.
I want to focus on the process. Why couldn’t the Minister make the changes that are implicit in Minister Champagne’s statement and the Order by the Governor-in-Council itself?
The answer may be found in certain government processes that create challenges under the timelines set out in the Telecom Act. I have written before about the various channels of appeals of a CRTC decision. In this particular case, Bell appealed to Cabinet, which engaged the timelines set out in Section 12(1) of the Act.
12(1) Within one year after a decision by the Commission, the Governor in Council may, on petition in writing presented to the Governor in Council within ninety days after the decision, or on the Governor in Council’s own motion, by order, vary or rescind the decision or refer it back to the Commission for reconsideration of all or a portion of it.
Unpacking that complicated sentence, this means that you have 90 days to file an appeal (a written “petition”) following a CRTC decision you don’t like. If Cabinet wants to act, it has until one year after the CRTC decision to make changes to the decision (“vary”), rescind the decision, or refer it back to the Commission for them to do the dirty work. Note that Cabinet can act on its “own motion”, meaning that it doesn’t need to wait for a “petition” to come it. Cabinet can also simply allow the calendar to run out and do nothing.
Let’s look at the timetable for last night’s Cabinet Order. The CRTC issued Telecom Decision CRTC 2023-358 on November 6, 2023. As stated in the Order, Bell filed its petition on February 2, 2024 (88 days after the Decision). Cabinet released its Order on November 6, 2024, exactly one year after the Decision.
The language of the Order implicitly tells the CRTC the expected outcome from its “reconsideration”. So why didn’t Cabinet use its powers to vary the Decision itself? After all, the CRTC already has such a jammed up schedule that its strategic plan calls for “addressing backlogs”.
Could it be that the Treasury Board’s regulatory impact analysis requirements have created so much red tape that Cabinet cannot complete the required impact analysis and still conform to the one-year review deadline set out in the Telecom Act?
As a result, asking the CRTC to “reconsider” allows Cabinet to bypass the impact process, but its add more work to a Commission already tangled up with its own work schedule.
It is also worth noting that the CRTC’s decision from last year (2023-358) has been superseded by the CRTC’s release a couple weeks ago of rates for the broader competition policy framework set out in August.
Last night’s Order in Council includes an explicit reference to the August decision, but it does not reference the CRTC’s October 25 interim rates order. At paragraph 9, doesn’t that CRTC order explicitly address the competitive and investment issues contained in the Cabinet reconsideration directive?
9. The interim rates will allow competitors to better serve Canadians using the latest available technology. The rates will provide competitors with the opportunity to innovate and to attract customers by selling a range of communications services over FTTP, including Internet, television, home phone, and smart home solutions. The rates will also ensure that those who build Internet networks will continue to invest in high-quality Internet access across Canada.
Will the CRTC respond to the Cabinet reconsideration with finalizing the interim rates set in October, or will more substantive changes be made?
The clock is ticking on the CRTC’s August 13, “Competition in Canada’s Internet service markets” framework. If a petition to Cabinet is going to be filed, the 90-day deadline is coming up early next week.
(Today’s blog post title is a nod to Bob Dylan’s Tangled Up in Blue, with apologies)