Growing CRTC cost awards delays ‘problem for everybody’

Increases in how long the CRTC takes to pay public interest groups to participate in proceedings not only represent an existential crisis for the Public Interest Advocacy Centre (PIAC) but also a wider problem that could harm the involvement of other consumer organizations, groups are warning. “I think we’re going to see — starting with PIAC, who is one of the most involved groups — a difficulty in being able to participate,” OpenMedia executive director Laura Tribe said. She added the public needs groups like these to represent them, given that "these are incredibly complex issues, and the CRTC processes are not user-friendly." Earlier this month, PIAC executive director John Lawford wrote to both Innovation Minister Navdeep Bains and Heritage Minister Pablo Rodriguez, saying the group is waiting on “costs claims in excess of $150,000, the oldest of which was filed with the CRTC in July 2017, one and a half years ago.” Lawford said he has yet to hear from either minister’s office. This isn’t the first time PIAC has warned that waiting on the CRTC’s cost awards process could lead the group to shut its doors, but according to Lawford, its situation is now even more dire. The cost awards regime allows groups that contributed to a CRTC process to be compensated for their time, if they meet criteria specified by the regulator’s Rules of Practice and Procedure. That funding comes from the telecoms. “It’s far worse” than a year ago, he said in a phone interview, explaining the group had to lay off two staff members and move offices, and has a larger funding shortfall than last year. “The issue of shutting down or not shutting down is still on the table, whereas by this time last year we had enough to go on,” adding if the CRTC slows down, PIAC risks "starving to death." The issue isn’t exclusive to PIAC. An analysis earlier this month by the Forum for Research and Policy in Communications (FRPC) found that the CRTC is taking significantly longer to issue cost awards in general than it used to. The group looked at how long it has taken to issue the 182 cost awards for 98 telecom proceedings between Jan. 1, 2018 and Nov. 28, 2018. “It’s a problem for everybody,” Lawford said. The FRPC found that in 2013, “the CRTC issued costs orders an average of 3.7 months after applicants submitted their costs applications; in 2018, orders were issued an average of 9.6 months after the applications were filed.” While in 2013, no awards took longer than six months to be issued, in the first 11 months of 2018, 81 per cent took more time than that, with 19 per cent taking more a year. In an emailed response, CRTC spokeswoman Patricia Valladao said that the “time it takes for the Commission to analyze these factors and publish a decision on whether to award costs, depends on the complexity of the issues in each cost application, as well as the number of applications received, and the length of the proceeding itself.” When asked whether that means the CRTC is saying proceedings or cost awards have gotten more complex over the past five years, and if so, in what ways they have gotten more complex that would explain the increased delays, Valladao said she had no information to provide. The FRPC said in a follow up note Tuesday that when it looked at potential factors related to “complexity” of proceeding, such as the cost amounts or the number of interveners in a proceeding, it found no clear correlation over the past four years between those factors and the amount of time it took the CRTC to issue cost awards. Both PIAC and the FRPC are among a number of public interest groups who said they won't be participating in the CRTC's proceeding to establish an internet code of conduct. Beside a tight timeframe for submissions, part of the reason PIAC said it's "boycotting" the process is for this reason -- the CRTC has been slow to deliver on cost awards. PIAC is strongly affected by the delays because much of its revenue comes from CRTC cost awards. FRPC data also showed that the group seems to be waiting longer for its awards, with the research note pointing out that “in 10 of the 13 proceedings from 2013 to 2015, the CRTC issued cost orders for PIAC in the same or less time than for other orders; in 8 of the 12 proceedings from 2016 to 2018, the CRTC issued costs orders for PIAC more slowly than for other orders.” In smaller proceedings, such as the ongoing proceeding over access to telecom wires inside buildings, PIAC is often the only consumer group to participate. FRPC executive director Monica Auer said it’s “one of Canada’s key public interest groups in telecom.” The research note numbers also show that the time FRPC itself was waiting on awards nearly doubled from 2016, when it was at 4.4 months, to 2017, when the wait extended to eight months. Auer said the delays limit the FRPC’s ability to participate on an effective basis, such as when it comes to hiring outside consultants. “It’s difficult for us to have business relationships when we have to say to people, by the way, a) there’s a chance we won’t be able to pay you at all, and b) we don’t know when we’ll be able to pay you and we hope it’s within a year.” In comparison, if a phone bill isn’t paid for a certain number of months, interest is charged and then the service can be disconnected, she said. OpenMedia’s Tribe said in a phone interview that though the group doesn’t rely on cost awards for the majority of its funding, it’s still been affected by delays. “That’s definitely a challenge for us, and it influences how much we’re able to participate at the CRTC,” she said. Participating in a proceeding can take months or over a year, and that means groups have to ensure they can front those costs over that time, and then wait for the costs,” Tribe said. “You have to be able to estimate that you have enough cash on hand,” she said, which influences a number of decisions including how involved groups get, and how many proceedings they participate in. Lisa Anderson-Kellett, chairwoman of the the Deaf Wireless Canada Committee (DWCC), said that the group has also been waiting longer for its cost awards to be issued. She said in an email the increase from five months in 2013 to 11 months now means “persons involved in our group don’t actually get reimbursed or their payment at least a year later after having been involved,” and it is causing financial strain on the individuals involved. Anderson suggested one way to speed up the process might be to split it in two, with groups submitting their receipts and invoices for reimbursements as early as possible, and then submitting the total hours worked on the proceeding when it wraps up. CRTC proceedings are complex, and require specialized knowledge and legal expertise, the FPRC research note pointed out. The public interest needs to be represented at the CRTC by groups like PIAC because members of the public “generally are not lawyers and do not know (nor should they) how to argue against telco lawyers,” Lawford said in an email. “It’s like saying why doesn’t the public just operate on their fellow members of the public so we can get rid of these expensive doctors.” He added that when the cost awards process was first set up in 1978, the CRTC itself concluded that the “complexity and importance of the issues which come before the Commission often demand that expert resources be available for their adequate treatment.” Auer noted in a follow-up email that the forum’s concern is that if the delays continue, groups that currently participate might shut down and other will be discouraged from participating. “In the longer term this may lead the CRTC to rely to a growing degree on evidence and arguments from those it regulates,” she said. The groups who use the cost awards process also say that there are other problems with how the process works. Auer added the policy governing cost awards is now eight years old, and the rates in that policy haven’t risen to keep pace with inflation. In comparison, she said, the regulator usually likes to review other policies every five years. The CRTC has made changes to the policy, but through information bulletins, which is a process that involves no public consultation. “An information bulletin is issued by fiat by the CRTC. It just pops into thin air, no explanation, no rationale,” she said. In other cases, the regulator has made changes to its policy in the cost awards themselves, sometimes retroactively. Tribe also pointed out there is no one central website where applicants can go to learn how it works, given the policy is amended through information bulletins and cost awards themselves. “If you’re not following the process that closely, it’s very hard to ensure you’re actually following the procedures that have been set by the CRTC,” she said. Lawford also said that over the past three or four years, companies have increased their challenges of cost awards. He added a regular review of the cost award policy would be helpful. Another option would be to ask potential interveners for a regulatory cost budget, so groups can be participate “knowing they’re going to be eligible for costs,” he suggested. When it comes to broadcasting proceedings, one way that PIAC gets money to appear is through the Broadcast Participation Fund (BPF). Last last year, the BPF registered to lobby the regulator following a proposal, subsequently rejected by the CRTC, from Sirius XM Canada Holdings Inc. to shift money away from the fund. Lawford told the Wire Report at the time that if the fund runs out of money, it will cease to do broadcasting work. Another avenue for the problem to be solved is through the ongoing review of the broadcast and telecom acts, or through Parliament, which set up the cost awards process in the first place, Auer said. One option is to petition cabinet to direct the CRTC to be more timely. She said the commission has often spoken about the need to ensure certainty and predictability for those it regulates, “and yet this is what public interest groups face daily.” “If it is indifferent to the financial circumstances of public interest groups, what does that say about whether it is indifferent to the interest of the public in general?” she asked. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Ahmad Hathout at ahathout@thewirereport.ca

Growing CRTC cost awards delays ‘problem for everybody’

Broadcast | December 18, 2018

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Growing CRTC cost awards delays ‘problem for everybody’

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