Jurisdiction looms as key point in rights of way dispute between telcos and cities

Should Canadian cities be able to turn a profit on telcos' access to public land? The cities say ‘yes', the telcos say ‘no' and the laws are subject to varied interpretations. Papers presented at a recent telecom conference raised questions but provided few answers. In mid-April the Law Society of Upper Canada hosted New Developments in Communications Law and Policy in Ottawa. One session was entitled "The Rights (and Wrongs) of Way: Legal and policy issues relating to access by communications companies to install facilities on municipal property". Participants hashed over the topic, all with their own spin on it. Toronto lawyer Hank Intven tabled a paper authored by him and Susan Gratton. The pair cited sections 42 to 44 of the Telecommunications Act to bolster their argument that municipalities are restricted to granting approval for construction of transmission lines. According to their reading of the Act, section 43 (2) permits access to municipal lines. But all other provisions severely limit the powers of the municipalities to control use or to demand payment. The first section cited states "A Canadian carrier or distribution undertaking may enter on and break up any highway or other public place for the purpose of constructing, maintaining or operating its transmission lines and may remain there for as long as is necessary for that purpose, but shall not unduly interfere with the public use and enjoyment of the highway or other public place." Sections 43 (3) and 43 (4) refer specifically to construction of the lines. By this reading, say Intven and Gratton, no additional charges may be levied. In presenting the paper to the conference, Intven said laws permit cost reimbursement for disruptions caused by construction. But the courts had rejected the concept of paying rents or dividends on public lands. That wasn't how the Federation of Canadian Municipalities (FCM) saw the situation. Jena Cameron, a policy analyst with the FCM, maintains Intven and Gratton are splitting hairs. All of the provisions concerning right of way are lumped together under one segment. The individual sections are necessary to delineate certain rights, but the intent is to consider the issue as a whole, she maintains. Part of the problem is jurisdictional, Cameron stated. Telecommunications is clearly a federal responsibility while control of property falls under provincial jurisdiction and the municipalities are provincial creations. The courts have ruled that federal laws will override provincial legislation only when the two are in direct conflict; otherwise both have equal effect. This was not always the case but the statutory framework has shifted. Cameron used the example of a dispute between the Law Society of Upper Canada and the city of Barrie to illustrate her point. The Ontario community had wanted to impose a $50 fee on businesses operating in the city. Local lawyers argued they should be exempt from the charges since they were governed by the LSUC. The society took up their cause but was rebuffed by the courts, which ruled nothing in current case law prevented the city from acting as it did. The situation is analogous with telecom rights of way, the FCM argues. Cameron maintains the fees sought by the municipalities are fair, that the value of the land is as much a cost as any other. The type of remuneration received from the carriers is irrelevant, she suggests, adding that payment in kind is acceptable. It is not acceptable to Canada's largest telco. Bell Canada presented a paper written by David Elder, its senior counsel, regulatory. The Bell document states, "we're being squeezed for a fee for access and free dark fibre." The dark fibre is a tariffed service for Bell but commercially available for others, the telecom giant claimed. "What happens to all that fibre from all rights of way users?" the paper questions. Elder scoffed at the position taken by several communities that their residents are owners of the land and are thus entitled to a return on a fixed asset. "That's akin to a homeowner charging a telco or cable for access to a house," he writes. "Who pays for that?" He added that rights of way were never meant to be money-generating investments for the municipalities. Rather, they were intended to ensure ease of access to utilities by residents. The Bell document dismisses the FCM position on shared federal/provincial jurisdiction. Provincial rights, including the rights of private property owners, must not be allowed to stand in the way of the provision of an upgraded infrastructure for the new century. "The framers of the constitution recognized that key nation-building undertakings could not be left to the vagaries of local preferences and politics," Elder writes on behalf of the telco. Bell says carriers and municipalities should work together to negotiate deals that work for all parties. The company acknowledges that some progress has been made by the carriers, the FCM and cities like Richmond Hill ON to resolve outstanding disputes and to develop standards. The CRTC could assist the process by providing guidance on topics such as access fees, the limitation of costs to direct, out of pocket expenses not consequential or opportunity costs, and a general indication of what approach will be taken on balancing issues. Both Cameron and Intven concurred with Elder's view. "The CRTC shouldn't intervene unless there is an impasse," the FCM's Cameron told the conference. In their paper, Intven and Gratton write, "Nothing in the statutory provisions governing municipal access to carriers authorizes municipalities to charge or the CRTC to order the payment of rent by carriers to locate their transmission lines on municipal or other private property." They continue the argument in later paragraphs. "Carriers must seek the consent of municipalities to construct transmission lines on municipal property, or, if municipalities do not grant construction approvals on terms acceptable to the carriers, may ask the CRTC to grant construction approval," the pair writes. " Bell's Elder concludes his paper by stating that the information highway and electronic commerce are the key drivers for the service-based Canadian economy of the future. "Surely this is not to be compromised because of the desire of some to simply extract money from the system, or of others to achieve some aesthetic ideal."

Jurisdiction looms as key point in rights of way dispute between telcos and cities

News | April 25, 2000

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