Rights of way battles continue on two fronts; CRTC likely to arbitrate a settlement

Two of Canada's largest cities are digging in their heels to battle BCT.Telus Communications Inc, other telecom carriers and, if necessary, the CRTC over their right to charge market rents for access to public rights of way. The disputes - which are now before the commission as part of two separate proceedings - escalated in February when the City of Vancouver notified Telus that it will be canceling the telco's right of way and access agreements at the end of this year. The city wants to impose rates that will reflect costs and land value. Telus questions whether the municipality has the legal jurisdiction to do so. The issue will probably end up before the CRTC, which is already in the midst of deciding the terms and conditions of access in a separate dispute between the City of Vancouver and Ledcor Industries Limited (Telecom PN 99-25). Meanwhile, Telus Integrated Communi-cations Inc (the company's central Canadian subsidiary) is fighting a similar battle on its eastern front. In late December, the telco filed a Part VII application against the City of Toronto for refusing it permission to construct a 118 km fibre optic network in the downtown core (File #8690-T50-01/99). Both the Vancouver and Toronto proceedings will have far reaching consequences for municipalities and carriers across Canada. In Toronto, Telus has offered to pay the city one dollar as a temporary measure while it builds the network and negotiates with the local authorities. The one-dollar figure comes from the CRTC Interim Order 4760-357, in which Telus, Bell Canada and Call-Net Enterprises Inc were required to pay that amount to Vancouver (NL, November 8/99). Toronto city council isn't keen on the one dollar solution. "It won't be the same at all," city councillor Howard Moscoe explained to Network Letter. "The dollar was an agreement that was accepted by Vancouver as an interim solution. We haven't accepted it at all. We've basically told Telus to get lost." Toronto is negotiating right of way agreements with several telecom carriers, including Bell, AT&T Canada, Stream Intelligent Networks Corp, 360networks (the former Worldwide Fiber) and Sprint Canada. Those negotiations appear to be going smoothly and Moscoe questions why Telus should have the advantage of having its disputes refereed by the federal regulator. It's an attitude that Moscoe suggests stems from the company's dual status as both an incumbent and a CLEC. "Telus is an incumbent local carrier in BC," the politician said. "It seems to believe that it can behave like an incumbent carrier in Ontario and the fact of the matter is they are not."Moscoe, who chairs the telecom committee for the Federation of Canadian Muni-cipalities, says each city must assert its right to manage rights of way. He has little sympathy for companies looking for handouts from the public purse. "They believe they own the streets. They're looking for social welfare and we're not about to give social welfare to telecoms."The one dollar payment also hasn't found much support in Vancouver. The city is arguing that the token amount comes nowhere close to recovering its costs for the digging up of streets and the detours made for local automotive traffic. Assistant city engineer Peter Judd estimates the extra outlay from the municipality costs taxpayers a million dollars each year. A more equitable fee scale would reduce the effect on taxes. This is the first time a Canadian city has demanded an incumbent telco negotiate a new fee schedule for access. The CRTC will likely institute a full public proceeding to settle the matter once and for all. Until it does, it will be issuing interim rulings on a case-by-case basis. These individual cases have garnered interest from a wide variety of interested parties, including major cities from across Canada, most of which are newcomers to the world of telecom regulation. Moscoe says the municipalities, however, are united on the issue of access. Local representatives from across Canada recently met in Ottawa to discuss their approach to the CRTC rights of way hearings. They will be presenting a united front to the regulator, making similar arguments and offering the same precedence to support their cases. "The greatest achievement we've been able to have in the last year is to get our act together across the country," the committee chairman notes. The question of jurisdiction will be one of the key components in the fight before the CRTC. The major telcos have long argued that the commission has the right to set rates, but only for telecom services. Under the Railway Act and the Telecommunica-tions Act, the reasoning goes, cities also have no right to impose fees or conditions for right of way access. That viewpoint was dealt a blow in October when the CRTC agreed to a one dollar interim fee for access in the Vancouver proceeding. Telco lawyers will be striving hard to overturn that finding. The carriers believe they are providing an essential service for which rental fees are unnecessary. But the cities counter that the costs of their infrastructure should be borne by the firms that want to use it. The possibility that a small surplus could arise from rights of way rates also colours the municipal argument. Municipal restructuring results in one voice on access issueObservers have suggested that some telecom carriers may try to bully communities as they merge into larger units. In the nation's capital, for example, rights of way had to be negotiated with the cities of Ottawa, Gloucester, Nepean and other municipalities. But all of them will unite soon to form one giant city of Ottawa. The situation could have enabled telcos to take advantageous terms and conditions from one municipality and apply them to the new mega city. But Moscoe dismisses this, saying local authorities in recently- or soon-to-be- merged communities have been coordinating their efforts to ensure the benefits accrue to the municipal governments and not the telecom carriers. The result, he adds, is a larger city that has the political clout to stand up to large carriers. Attempts to play one region off against another are likely to come to naught. Moscoe says he's happy with the way negotiations have been going between Toronto and the majority of telecom carriers. As far as he is concerned, only one firm is causing difficulty. "Telus has been extremely arrogant," says Moscoe, who has been a vocal and spirited critic on this issue. With tongue firmly in cheek, he categorizes the telco's view of its status. "There's an order of ascendancy in this country: it's Telus, God, the Queen and the Parliament of Canada."

Rights of way battles continue on two fronts; CRTC likely to arbitrate a settlement

News | March 27, 2000

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