Telecom fee changes would lead to “significant increases” in financial contributions, Cogeco tells CRTC

Cogeco Inc. is raising concern with the CRTC that proposed changes to its Telecom Fees Regulations“would lead to a significant increase” in annual telecommunications fees collected from Canadian carriers, and could double Cogeco’s own contributions. Cogeco made the comments in an April 19 intervention responding to the regulator’s proposal to change the definition of “contribution-eligible revenue” to align the telecommunications fees calculation with the calculation used for the telecommunications contribution regime, “thereby streamlining annual reporting” for TSPs. The CRTC’s regulatory costs are related to its responsibilities under the Telecommunications Act which are paid for by telecommunications service providers (TSPs). Under its fee regulation, TSPs that are required to pay under the contribution regime are also required to pay telecommunications fees for the recovery of costs attributable to the CRTC. The amount that each TSP owes is prorated based on its share of the total contribution-eligible revenues of all TSPs that have to pay telecom fees. In February, the commission launched its consultations. Under the streamlined process, retail internet revenues and retail paging revenues would no longer be deductible when determining contribution-eligible revenues under the proposed amendments. Cogeco said it supports, in principle, the CRTC’s proposed amendments because it would introduce consistency, efficiency and transparency in methods of calculating various financial obligations undertaken by Canadian carriers. “However, without any further changes to the existing calculation method… specifically in Cogeco’s case, and based on the application of Cogeco’s contribution eligible revenues, total industry contribution eligible revenues and the latest CRTC costs related to regulation of telecommunications activities, the company would see a doubling of its telecommunications fees, year over year,” Cogeco argued. Cogeco noted that the commission has collected fees that correspond to the actual costs incurred by the CRTC “and no more” on a prorated basis. If the commission collects an excess of fees, or an insufficient amount, an adjustment is performed to complete the amount required. “With the commission’s proposals … both the numerator and denominator will increase, but the total costs incurred by the commission are expected to continue to follow their past trajectory, i.e., modest increases on an annual basis,” Cogeco wrote. Cogeco argued that without any changes to the calculation formula, the CRTC will be collecting fees “far in excess” of the costs that would need to be covered. The company said that goes against the Treasury Board guidelines which state “that fee levels should not be designed to exceed estimated full costs.” “With the current amendments proposed by the commission, it is not clear that this principle will be respected once the Telecom Fees Regulations have been changed,” the company wrote. Cogeco is recommending that the CRTC update its proposal to ensure that it continues to only recover fees from Canadian carriers adequate to cover its actual costs of regulating the telecommunications industry. Saskatchewan Telecommunications Holding Corp., Telus Corp. and BCE Inc., all submitted interventions supporting the CRTC’s proposal. – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Paul Park at ppark@thewirereport.ca

Telecom fee changes would lead to “significant increases” in financial contributions, Cogeco tells CRTC

News | April 21, 2022

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Telecom fee changes would lead to “significant increases” in financial contributions, Cogeco tells CRTC

News | April 21, 2022

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