Bell Decision on Broadband From SCC

This is a stub posting on this morning’s Bell decision from the Supreme Court (with the headnote) until we can figure out what its implications are: Bell Canada v. Bell Aliant Regional Communications, 2009 SCC 40,
Summary:

The CRTC’s creation and use of the deferral accounts for broadband expansion and consumer credits was authorized by the provisions of the Telecommunications Act which lays out the basic legislative framework of the Canadian telecommunications industry. In particular, s. 7 of the Act sets out certain broad telecommunications policy objectives and s. 47(a) directs the CRTC to implement them when exercising its statutory authority, balancing the interests of consumers, carriers and competitors. A central responsibility of the CRTC is to determine and approve just and reasonable rates to be charged for telecommunications services. Pursuing policy objectives through the exercise of its rate-setting power is precisely what s. 47 requires the CRTC to do in setting just and reasonable rates. [1] [28] [36]

The issues raised in these appeals go to the very heart of the CRTC’s specialized expertise. The core of the quarrel in effect is with the methodology for setting rates and the allocation of certain proceeds derived from those rates, a polycentric exercise with which the CRTC is statutorily charged and which it is uniquely qualified to undertake. The standard of review is therefore reasonableness. [38]

In ordering subscriber credits and approving the use of funds for broadband expansion, the CRTC acted reasonably and in accordance with the policy objectives of the Telecommunications Act. In the Price Caps Decision, the CRTC indicated that the amounts in the deferral accounts would help achieve the CRTC’s objectives. When the CRTC approved the rates derived from the Price Caps Decision, the portion of the revenues that went into the deferral accounts remained subject to the CRTC’s further directions. The deferral accounts, and the fact that they were encumbered by the possibility of the CRTC’s future directions, were therefore an integral part of the rate-setting exercise. The allocation of deferral account funds to consumers was neither a variation of a final rate nor, strictly speaking, a rebate. From the Price Caps Decision onwards, it was understood that the disposition of the deferral account funds might include an eventual credit to subscribers once the CRTC determined the appropriate allocation. [64‑65] [77]

There was no inappropriate cross-subsidization between residential telephone services and broadband expansion. The Telecommunications Act contemplates a comprehensive national telecommunications framework. The policy objectives that the CRTC is always obliged to consider demonstrate that it need not limit itself to considering solely the service at issue in determining whether rates are just and reasonable. It properly treated the statutory objectives as guiding principles in the exercise of its rate‑setting authority, and came to a reasonable conclusion. [73] [75] [77]