Ontario prison long-distance rates case back at the CRTC

BCE Inc. and the Province of Ontario are back at the CRTC looking for clarity in the long-running fight over rates charged, during a span of almost ten years, for long-distance phone services in Ontario prisons. In December, the CRTC looked at issues arising from a proposed class action lawsuit before the Ontario courts. The suit alleges that Bell Canada overcharged on long-distance rates in penitentiaries in Ontario. The lawsuit itself is still working its way through the legal system and was on hold while awaiting the CRTC ruling. During the period Bell held the contract for the telephone systems for people detained in Ontario correctional facilities between 2013 and 2021, the rates Bell charged for collect calls violated provincial consumer protection legislation and were “unconscionable,” the suit alleges. Late last year, the CRTC found that the rates for long-distance calling in Ontario correctional facilities were forborne from regulation in a 1997 decision, “and have not been subject to commission approval since that time.” It also found it would not have the ability to adjust rates retroactively to provide relief to the plaintiffs in the lawsuit. Bell and the Province of Ontario submitted applications to the CRTC in February asking it to review and vary the decision it came to in December. Is forbearance a lack of regulation, or a regulatory tool? At issue, according to Bell and the province, is that the CRTC was not specific enough about the role forbearance plays in its regulatory toolkit, potentially leaving a gap that could allow various levels of courts to jump in on market business where they should not, they allege. According to the Telecommunications Act, when the CRTC believes that market forces will do the work to protect consumer interests on their own, the commission can decide not to use its power of industry regulation to make changes to how something is being done. Bell wants the CRTC to agree to review and vary the December decision to clarify that its finding that the rates are forborne from regulation was in fact the CRTC making a regulatory decision, not the CRTC declining to exercise jurisdiction over the rates. “If the commission will not clarify that forbearance is a proactive use of regulatory power, it will undermine forbearance as an effective regulatory tool,” Bell wrote. The company is concerned that other civil court suits like the class action or suits filed by other businesses will be raised in the future questioning the “reasonableness” of forborne rates if the CRTC does not make its position clear. “By failing to send a clear message to courts that forbearance is the proactive use of regulatory power, the commission risks undermining this power all together ,” Bell wrote. If the courts were allowed to assess whether forborne rates are reasonable, then market forces would no longer be setting rates, Bell argues, but rather “various superior courts across the country would,” undermining the “business certainty” telecoms need. “The proper recourse is not for courts to look at rates retroactively, but for parties to apply to the commission to remove forbearance. The commission not only failed to resolve this question; it failed to discuss the purpose of forbearance, why it makes use of this tool and how it uses this tool to accomplish regulatory objectives,” Bell wrote. “Without a decision from the commission on the issue of its jurisdiction, the parties are left in limbo, the court is left without the guidance that it specifically contemplated receiving from the commission, and superior courts across the country will be left with uncertainty about the scope of the commission’s jurisdiction.” In its own separate application filed around the same time as Bell’s, the Province of Ontario notes that the CRTC would not have to change the findings it came to in its December decision in order to add clarity on the forbearance issue. Lawyers for class members call Bell, Ontario applications ‘collateral attacks’ But the lawyers of Goldblatt Partners LLP representing the proposed class action participants argue in their intervention on the proceeding that the CRTC should not vary its decision. The lawyers call Bell and Ontario’s applications “collateral attacks” on previous court decisions in the matter, “all of which have already held that the civil courts have concurrent jurisdiction over the underlying dispute.” They allege that Bell and Ontario’s filings “seek to immunize” them from “any scrutiny about the alleged illegal profit they have jointly generated from inmates and their families contrary to provincial consumer protection legislation, common law, and equity.” “The court jurisdiction issues pressed by Bell and Ontario (disguised as a question about the commission’s exclusive jurisdiction over forborne matters) are for the courts to decide, as the Court of Appeal did in the underlying proceeding,” they said elsewhere in the intervention. They argue that the CRTC did not fail in considering the central issue at hand in its December decision. They accused Bell of making the same argument “so many times, several of which has been in this proceeding and caused much delay and wasting of resources.” They called the current application “re-arguing the same failed argument … a borderline abuse of process.” When asked for comment on the allegations, a Bell spokesperson said in a statement sent to The Wire Report that the CRTC did not confirm whether it retained jurisdiction over forborne rates, reiterating the company’s argument from its application. “Bell has accordingly requested the CRTC clarify that its forbearance in this matter did not result in the commission abdicating its jurisdiction and does not provide civil courts with free rein to interfere in telecommunications policy,” the spokesperson stated. The spokesperson noted Bell has not provided payphone services in Ontario correctional facilities since 2021. As of December, the contract was held by Synergy Inmate Phone Solutions Inc. Rates have come down in Ontario since the switchover, the December CRTC decision notes. The Wire Report also reached out to the Province of Ontario requesting comment on the allegations in the intervention. A spokesperson for the provincial attorney general's office declined to comment because the matter is still before the commission. In any case, the lawyers argue that nobody is asking the court to set telecommunication rates or “determine anything that is within the commission’s statutory expertise. “The court is asked to adjudicate the breach of provincial laws, and what remedy is available for such a breach,” they wrote. Telus backs up Bell and the province in concerns over jurisdiction Like Bell and the province, Telus Corp. is concerned that by not clearly stating its jurisdiction in the decision, the CRTC leaves the door open for courts to “increasingly intervene” in telecommunications matters, including rates, “that fall squarely within the commission’s exclusive domain.” “Such judicial intervention would not only violate fundamental constitutional and administrative law principles but would also fragment the commission’s ability to maintain coherent national telecommunications policy frameworks,” Telus wrote. “The commission must therefore explicitly affirm its continuing jurisdiction to prevent this erosion of its regulatory authority.” The company argues that forbearance is the CRTC’s way of determining that market forces will effectively regulate rates on their own but forborne services are still under the commission’s oversight. “While the commission may forbear from direct rate-setting, it retains broad authority to regulate these services, address regulatory gaps, and grant remedies where necessary,” Telus observed in its intervention. Telus argued that previous court decisions make clear the intent of Parliament that “the CRTC, not the courts, should have jurisdiction over all disputes related to telecommunications service contracts and rates.” “Courts across Canada require clear direction regarding the scope and nature of the commission's continuing jurisdiction over forborne services. Without such clarity, there is a material risk of inappropriate judicial intervention in matters that Parliament has exclusively delegated to the commission’s expertise,” Telus wrote. hdaley@thewirereport.ca With files from The Wire Report’s archives.

Ontario prison long-distance rates case back at the CRTC

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By Hannah Daley
| April 3, 2025

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