Court rejects TekSavvy appeal of CRTC decision to revert wholesale rates

TekSavvy Solutions Inc.’s appeal of the CRTC’s reversal of a 2019 decision that would have slashed wholesale access rates for competitor internet providers has been rejected. The Federal Court of Appeal dismissed TekSavvy’s arguments in a decision issued Monday, almost three years after TekSavvy first filed with the court. The dispute began with a 2019 CRTC decision, which significantly lowered the rates that large telecoms could charge smaller competitors like TekSavvy for access to their networks. This move was intended to foster competition and reduce prices for consumers. However, major telecom companies, including BCE Inc., challenged the decision, arguing that the rates were unsustainable. The CRTC issued a new decision in 2021, reversing the 2019 order and permanently setting wholesale rates to a higher interim rate established in 2016. TekSavvy, negatively affected by the reversal, took the CRTC to court arguing that its decision was legally flawed and procedurally unfair. The company also accused then-CRTC chair Ian Scott of being biased towards Bell, citing a controversial private meeting between him and the telecom’s CEO Mirko Bibic. Justice David Stratas explained in his decision Monday that the court’s role is limited to addressing legal questions of jurisdiction, not re-evaluating policy decisions or the rates themselves. “Teksavvy’s real concern is disagreement with the policy adopted by the CRTC and the discretion it exercised in setting the rates, matters that we are powerless to address,” he wrote. Stratas said that the CRTC is empowered to set rates using any method or technique it considers appropriate and that TekSavvy's arguments sought to constrain those powers. In its appeal, TekSavvy said it had “legitimate expectation” that the CRTC would conduct a new costing exercise in establishing the revised rates. However, the CRTC’s statement that final rates would be based on a “full assessment and review of costing inputs and costing methodologies” – which TekSavvy cited in its appeal – was not a promise that the CRTC would follow any particular process, the court explained. Although the CRTC did not conduct another costing analysis of the wholesale regime before issuing its 2021 decision, the commission did rely on interim rates established in 2016, which were set using usual costing methods and analysis. “The CRTC did not pluck figures from the air or throw darts at a dartboard,” said the judge. Only procedural expectations are protected by law, not substantive ones, the decision explained. Because the CRTC had already engaged in a costing exercise from 2016 to 2019, which did not need to be repeated, and TekSavvy had the opportunity to participate in the full regulatory process, its procedural expectations were met. The court also dismissed TekSavvy’s allegations of bias against Scott. Public comments made by Scott, cited by TekSavvy, were general expressions of the CRTC’s policy position, not personal bias. Even if they were, the comments were made before the CRTC issued its 2021 decision and TekSavvy failed to object to them in a timely manner, which further undermined its claims, the judge found. While Stratas noted that private meetings between regulators and lobbyists “can be a recipe for trouble,” the court found no evidence of impartiality. The documented purpose of the meeting between Scott and Bibic was to discuss “broadcasting” and not “telecommunications,” evidence that shows wholesale rates were not being discussed, the judge wrote. Stratas noted again that, even if the meeting was a concern for TekSavvy, it should have raised the issue during the regulatory proceeding and not kept it to itself until the CRTC released its decision, a decision that negatively affected TekSavvy. “If the issue matters to a party—and is not merely trivial—and if it has arguable merit, one would expect that a party would raise it as soon as reasonably possible,” he wrote. – Reporting by Phalen Tynes-MacDonald at pcreed@thewirereport.ca

Court rejects TekSavvy appeal of CRTC decision to revert wholesale rates

Court |
By Phalen Tynes-MacDonald
| July 24, 2024

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Court rejects TekSavvy appeal of CRTC decision to revert wholesale rates

Court | By Phalen Tynes-MacDonald | July 24, 2024

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By Phalen Tynes-MacDonald
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