The Supreme Court of Canada has ruled that the CRTC made the right decision when it gave Bell Canada BCE-T and Telus Corp. T-T specific direction on how to use $650-million in surplus money it collected from urban telephone customers.
In a decision handed down Friday morning, the Supreme Court said the Canadian Radio-television and Telecommunications Commission “did exactly what it was mandated to do under the Telecommunications Act.”
The commission had the authority to direct the disposal of surplus funds, which were built up when the phone companies charged more for telephone services to urban clients than they were supposed to.
The CRTC said the funds were to be used to roll out improvements to rural broadband coverage and improved service to disabled customers. The balance was to be repaid to existing customers.
Consumer and anti-poverty groups had challenged the CRTC decision, saying all the money should have gone back to phone customers.
The phone companies themselves also asked for a reversal of the CRTC ruling, because they had earmarked the funds for other purposes.
The surpluses, the accumulation of about four years of customer overpayments, followed a 2002 effort by the CRTC to encourage competition in the local phone services market by making monthly rates high enough to attract new entrants. In effect, a cushion was built into the rates, but in return, the country's phone companies were told to park some of the extra money in deferral accounts.
In 2006 the CRTC announced that it would allow the phone companies to submit plans to use most of the money to expand high-speed Internet services in rural and remote communities. At least 5 per cent of the money was also earmarked to expand services to disabled customers.
With files from The Canadian Press
