Decision CRTC 2001-23, released January 25, 2001, reaffirms broad constitutional authority for the CRTC to supercede municipalities in the regulation of telecommunications carriers and their access to municipal rights of way. Repeatedly in the Decision, the CRTC rejected limitations on the Commission’s jurisdiction under the Telecom Act and, in doing so, the CRTC is blocking the ability of municipalities to collect so-called “market-based” fees for access to municipal rights of way.
Background
In March of 1999, Ledcor Industries (now 360 Networks) asked the CRTC to intervene in a dispute it was having with the City of Vancouver over the ability to install, operate and maintain fiber optic cables on municipal rights of way. Vancouver had sought fees that exceeded the cost of providing access, an ongoing percentage of revenues, and a donation of four fiber strands to the City among other requirements. The regulatory proceeding grew to include other municipalities and all of Canada’s national carriers as well as building owner and manager associations believing that the Decision could have implications on other property access agreements.
Municipal Implications
The CRTC re-affirmed that carriers should be negotiating access with municipalities, while clarifying the terms that it considered to be reasonable. Among others, the CRTC will permit cost based allocations of direct costs with a factor to account for indirect costs. The CRTC rejected an allocation toward fixed costs, because of the nature of municipal governments being completely paid for by a tax base.
Building Owner Implications
In rejecting Vancouver’s “market based pricing” with recurring fees, the Commission rejected this scheme because there is no free-market for municipal land. The CRTC expressly contrasted this with private property, which seems to indicate the Commission would look more favourably upon private landlords charging market-based fees.
Summary
Certain statements in the Decision could be interpreted to imply that the Commission will not permit interference with its authority to exercise jurisdiction over telecommunications services. At the same time, the Commission stated clearly that it is not, at this time, prescribing terms and conditions related to further construction by other carriers applicable in Vancouver or elsewhere. However, the principles used are expected to be helpful in negotiating future access agreements and resolving disputes.
The Commission explicitly rejected the populist claim that taxpayers have been subsidizing carriers by providing free access to rights of way. The Commission noted that much of the value of adjacent land derives from the fact that the land is serviced by utilities such as telecommunications carriers. “The benefits of a competitive telecommunications market and greater access to modern high-speed networks… provide generalized benefits throughout the municipality, attracting industry, creating jobs [and] increasing tax revenue.” Carriers, cities and building owners alike will mutually benefit as they begin to view telecom infrastructure deployment as a partnership.