Telecom companies urging courts for a delay to hearing on rates

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Canada’s large cable and telephone companies say a coming Federal Court of Appeal hearing on wholesale rates for broadband should be delayed if it cannot be held in person, arguing the matter is too complicated to be handled through video conferencing.

The telecom companies are in the midst of appealing an August ruling that lowered the rates they can charge third-party operators and ordered them to make retroactive payments to those providers.

Canadian courts, including the Federal Court of Appeal and the Supreme Court, have begun moving their hearings online in response to the COVID-19 pandemic. However, the phone and cable companies say that such an approach would not be suitable for their case because the facts are “exceedingly complex” and it involves too many lawyers and documents. The hearings are scheduled for June 25 and 26.

“Video-conferencing platforms such as Zoom or Webex are not ideal in such circumstances, and may become unwieldy, rendering the hearing difficult to proceed with and follow,” the cable companies wrote in a letter sent to Justice David Stratas on Wednesday.

Independent internet-service provider (ISP) TekSavvy Solutions Inc., based in Chatham, Ont., called the request a delay tactic.

“It’s very ironic that the largest telecom companies in Canada, who are actively selling video-conferencing solutions that they claim are secure, high quality [and] have lots of capacity ... are now saying they’re not good enough for the court case,” Mike Stanford, vice-president of marketing for TekSavvy, said.

“If we can run Parliament and the government by video conference, I’m not sure why we can’t have this done via video conferencing."

The Canadian Radio-television and Telecommunications Commission requires large telecom companies to sell wholesale access to third-party operators such as TekSavvy and Distributel, which then sell internet services to their own customers. The system is meant to encourage competition in the market.

Last August, the CRTC lowered the final rates for what the larger players are able to charge ISPs and ordered the phone and cable companies to make retroactive payments to compensate for the higher prices that had been charged since the commission set interim rates in 2016. The large telecom companies have estimated the retroactive payments would total $325-million.

The decision was stayed on appeals to the federal court from BCE Inc. and a group of five cable operators: Rogers Communications Inc., Shaw Communications Inc., Quebecor Inc.’s Videotron Ltd., Cogeco Communications Inc. and Eastlink Inc.'s owner Bragg Communications Inc. The companies have said the new rates are so low that they would have to reconsider some of their network-investment plans.

During recent earnings calls and annual shareholder meetings, Canada’s large phone and cable companies have highlighted how critical their networks have been in enabling Canadians to work remotely during the global health crisis.

However, in their letters to Justice Stratas, the companies submit that video conferencing would not be a suitable avenue for their appeal, which will include more than a dozen lawyers and no fewer than 1,500 documents.

“Given that this is a ‘high stakes’ appeal, the disposition of which will affect hundreds of millions of dollars that are directly at issue and significantly impact the future of internet infrastructure investment in Canada, it is vitally important that the court have ready and efficient access to all of the information it requires to address the numerous matters at issue,” Kent Thomson, a lawyer at Davies Ward Phillips & Vineberg LLP, wrote on behalf of the cable companies.

“We respectfully submit that this will only be possible if an in-person hearing is held.”

A lawyer for BCE agreed with the cable companies’ position, saying in a separate letter that a remote hearing would be “technically impractical” and “unfair to the parties.”

Teksavvy’s Mr. Stanford countered that the larger companies are merely looking to drag out the legal process for as long as possible.

“The current status quo tilts the playing field in their favour and stifles competition. I think they’re quite content to see that continue for as long as possible," he said.

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