Date: 20061127
Docket: A-653-05
Citation: 2006 FCA 385
CORAM: LINDEN J.A.
EVANS
J.A.
MALONE
J.A.
BETWEEN:
MTS ALLSTREAM INC.
Appellant
and
THE CITY OF TORONTO
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered from the Bench at Toronto, Ontario, on November 27, 2006)
EVANS J.A.
[1]
This is an
appeal by MTS Allstream Inc. (“Allstream”) pursuant to section 64 of the
Telecommunications Act, S.C. 1993, c. 38, from a decision of the Canadian
Radio-television Telecommunications Commission (“CRTC”), dated September 25,
2005, and issued as Telecom Decision CRTC 2005-46.
[2]
In the decision
under appeal, the CRTC denied Allstream’s application, made in 2001, to set aside
a Municipal Access Agreement (“MAA”) which a corporate predecessor, MetroNet
Communications Group Inc., had originally made with the City of Toronto in 1997,
and to impose terms and conditions more favourable to Allstream, pursuant to
subsection 43(4) of the Telecommunications Act. The MAA contained the
terms and conditions on which the City consented to give Allstream access to
public highways, and other municipal property, to enable it to construct a telecommunications
transmission line below ground.
[3]
Allstream’s
underlying complaint is that its MAA with the City of Toronto subjects it to more onerous terms than the
MAAs which the City made with the incumbent carrier and, later, with other new
market entrants. This places Allstream at a competitive disadvantage. In
particular, Allstream says that, in order to promote competition in
telecommunications, the CRTC has exercised its power under subsection 43(4) in
other cases to impose terms which have been more favourable to the carrier than
the terms in Allstream’s MAA. More favourable terms have made it possible for
subsequent market entrants to compete on a more equal basis with established
carriers. Allstream points especially to the fact that the fees payable to Toronto under the MAA exceed the costs
to the municipality caused by granting access to its highways and other public
places.
[4]
The basis
of Allstream’s appeal is that, in dismissing its application to impose new
terms, the CRTC has allowed an agreement to stand which is contrary to subsection
43(2) of the Act when interpreted in light of the statutory policy of, inter
alia, encouraging competition in telecommunications. Section 47 sets out
the CRTC’s duty in regard to the implementation of statutory policies.
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47.
The Commission shall exercise its powers and perform its duties under this
Act and any special Act
(a)
with a view to implementing the Canadian telecommunications policy objectives
and ensuring that Canadian carriers provide telecommunications services and
charge rates in accordance with section 27;
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47.
Le Conseil doit, en se conformant aux décrets que lui adresse le gouverneur
en conseil au titre de l’article 8 ou aux normes prescrites par arrêté du
ministre au titre de l’article 15, exercer les pouvoirs et fonctions que lui
confèrent la présente loi et toute loi spéciale de manière à réaliser les
objectifs de la politique canadienne de télécommunication et à assurer la
conformité des services et tarifs des entreprises canadiennes avec les
dispositions de l’article 27.
|
[5]
The
Canadian telecommunications policy objectives referred to in section 47 are set
out in section 7.
|
7.
It is hereby affirmed that telecommunications performs an essential role in
the maintenance of Canada’s identity and
sovereignty and that the Canadian telecommunications policy has as its
objectives
(a)
to facilitate the orderly development throughout Canada of a
telecommunications system that serves to safeguard, enrich and strengthen the
social and economic fabric of Canada and its regions;
(b)
to render reliable and affordable telecommunications services of high quality
accessible to Canadians in both urban and rural areas in all regions of Canada;
(c)
to enhance the efficiency and competitiveness, at the national and
international levels, of Canadian telecommunications;
(d)
to promote the ownership and control of Canadian carriers by Canadians;
(e)
to promote the use of Canadian transmission facilities for telecommunications
within Canada and between Canada and points outside Canada;
(f)
to foster increased reliance on market forces for the provision of
telecommunications services and to ensure that regulation, where required, is
efficient and effective;
(g)
to stimulate research and development in Canada in the
field of telecommunications and to encourage innovation in the provision of
telecommunications services;
(h)
to respond to the economic and social requirements of users of
telecommunications services; and
(i)
to contribute to the protection of the privacy of persons.
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7.
La présente loi affirme le caractère essentiel des télécommunications pour
l’identité et la souveraineté canadiennes; la politique canadienne de
télécommunication vise à :
a) favoriser le développement ordonné des
télécommunications partout au Canada en un système qui contribue à
sauvegarder, enrichir et renforcer la structure sociale et économique du Canada et de ses
régions;
b) permettre l’accès aux Canadiens dans toutes
les régions — rurales ou urbaines — du Canada à des services de
télécommunication sûrs, abordables et de qualité;
c) accroître l’efficacité et la compétitivité,
sur les plans national et international, des télécommunications canadiennes;
d) promouvoir l’accession à la propriété des
entreprises canadiennes, et à leur contrôle, par des Canadiens;
e) promouvoir l’utilisation d’installations de
transmission canadiennes pour les télécommunications à l’intérieur du Canada et à
destination ou en provenance de l’étranger;
f) favoriser le libre jeu du marché en ce qui
concerne la fourniture de services de télécommunication et assurer l’efficacité
de la réglementation, dans le cas où celle-ci est nécessaire;
g) stimuler la recherche et le développement au
Canada dans le
domaine des télécommunications ainsi que l’innovation en ce qui touche la
fourniture de services dans ce domaine;
h) satisfaire les exigences économiques et
sociales des usagers des services de télécommunication;
i) contribuer à la protection de la vie privée
des personnes.
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[6]
This
appeal was heard at the same time as another appeal by Allstream in the materially
identical case involving an MAA with the City of Calgary in File No. A-654-05. The reasons for
judgment given in the present appeal are equally applicable to the Calgary appeal, and a copy will be inserted
into both files.
[7]
Subsections
43(2) and (3) of the Telecommunications Act provide that Canadian
carriers have a right of access to public streets and other public property in
order to construct, maintain and operate transmission lines, but shall not
break up a highway to construct a transmission line without the consent of the
municipality or other relevant public authority.
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43(2)
Subject to subsections (3) and (4) and section 44, a Canadian carrier or
distribution undertaking may enter on and break up any highway or other
public place for the purpose of constructing, maintaining or operating its
transmission lines and may remain there for as long as is necessary for that
purpose, but shall not unduly interfere with the public use and enjoyment of
the highway or other public place.
(3)
No Canadian carrier or distribution undertaking shall construct a
transmission line on, over, under or along a highway or other public place
without the consent of the municipality or other public authority having
jurisdiction over the highway or other public place.
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43(2)
Sous réserve des paragraphes (3) et (4) et de l’article 44, l’entreprise
canadienne et l’entreprise de distribution ont accès à toute voie publique ou
tout autre lieu public pour la construction, l’exploitation ou l’entretien de
leurs lignes de transmission, et peuvent y procéder à des travaux, notamment
de creusage, et y demeurer pour la durée nécessaire à ces fins; elles doivent
cependant dans tous les cas veiller à éviter toute entrave abusive à la
jouissance des lieux par le public.
3)
Il est interdit à l’entreprise canadienne et à l’entreprise de distribution
de construire des lignes de transmission sur une voie publique ou dans tout
autre lieu public — ou au-dessus, au-dessous ou aux abords de ceux-ci — sans
l’agrément de l’administration municipale ou autre administration publique
compétente.
|
[8]
The
provision of the Act most immediately relevant to this appeal is subsection
43(4).
|
43(4)
Where a Canadian carrier or distribution undertaking cannot, on terms
acceptable to it, obtain the consent of the municipality or other public
authority to construct a transmission line, the carrier or distribution
undertaking may apply to the Commission for permission to construct it and
the Commission may, having due regard to the use and enjoyment of the highway
or other public place by others, grant the permission subject to any
conditions that the Commission determines.
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43(4)
Dans le cas où l’administration leur refuse l’agrément ou leur impose des
conditions qui leur sont inacceptables, l’entreprise canadienne ou l’entreprise
de distribution peuvent demander au Conseil l’autorisation de construire les
lignes projetées; celui-ci peut, compte tenu de la jouissance que d’autres
ont des lieux, assortir l’autorisation des conditions qu’il juge indiquées.
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[9]
In a
decision made earlier in the course of Allstream’s application (Telecom
Decision CRTC 2003-82), the CRTC took the view that it may exercise its power
under subsection 43(4) in two situations. First, the CRTC can impose terms on
the parties when they have been unable to conclude an MAA. Second, although a
signed MAA will normally be taken as proof that the municipality’s consent was
obtained on terms “acceptable” to the carrier, the CRTC may impose terms under
subsection 43(4) if a party can show that it did not truly consent to the terms
of the MAA, as a result of, for example, a mistake, duress, or the abuse of
unequal bargaining power.
[10]
Like other
municipalities, the City of Toronto maintains that an MAA is
conclusive proof that the consent of the municipality was obtained on “acceptable”
terms and that, consequently, subsection 43(4) does not empower the CRTC to
impose terms different from those in an existing MAA. However, it is not
necessary to decide this issue in order to dispose of this appeal and we express
no view on it.
[11]
The CRTC
concluded in its reasons for the decision under appeal in this case that
Allstream had not proved on the balance of probabilities that it entered into
the MAA with the City of Toronto as a result of a mistake,
duress, or the abuse of unequal bargaining power. When leave to appeal is
granted, an appeal under section 64 is limited to questions of law and
jurisdiction. The above questions are questions of mixed fact and law. In the
absence of an extricable question of law from the CRTC’s application of
subsection 43(4) to the facts found, a question of law can only arise if the
CRTC’s conclusion was unreasonable.
[12]
In our opinion,
there was ample evidence before the CRTC to support its conclusion that, even
after taking into consideration the state of competition when Allstream entered
into the MAA relatively soon after the opening of the telecommunications market
to competition, Allstream had not established that the MAA was vitiated by
duress or abuse of unequal bargaining power. We did not understand counsel for Allstream
to seriously contend to the contrary.
[13]
Allsteam’s
principal argument was that the CRTC failed to consider whether the terms of
the MAA were compatible with the policy of the Act to promote facilities-based competition.
In particular, the CRTC held Allstream to the MAA with the City of Toronto,
even though its terms were onerous and, in their effect, restrictive of
competition, when compared with those imposed by the CRTC in the Ledcor/Vancouver
case (“Ledcor”) (Decision CRTC 2001-23).
[14]
The answer
is that, unlike the present case, no MAA had been concluded in Ledcor,
and it was clear that the parties were unable to agree the terms on which
Ledcor would be granted access to municipal property. Hence, the CRTC in Ledcor
did not have to consider the validity of a prior agreement, but only to
exercise its discretion to design appropriate terms when a carrier could not
obtain municipal consent on terms acceptable to it. The CRTC’s reasons in Ledcor
must be understood as applicable to the facts before it.
[15]
In
dismissing an appeal by the municipality in Ledcor,
this Court emphasized that the principles enunciated by the CRTC in that
decision were “not binding on anyone” and that the decision did not purport to
adopt any model or agreement that could be the starting point for discussions
between municipalities and carriers: Federation of Canadian Municipalities
v. AT &T Canada Corp., [2003] 3 F.C. 379, 2002 FCA 500, at para. 21. Moreover,
the fact that the Court did not regard the principles enunciated by the CRTC in
Ledcor as a basis for the negotiation of other MAAs suggests that it would not have treated a
divergence between the terms of an existing MAA and the Ledcor principles
as invalidating the MAA.
[16]
Although
put in different ways, counsel’s argument ultimately is that the MAA contains
terms that are inconsistent with the qualified right of access afforded to
carriers by subsection 43(2). In particular, counsel says, this right requires
that fees payable by carriers must be based on the causal costs to the
municipality of permitting access, and the Act implicitly renders void the
terms of an MAA which are inconsistent with this and other “Ledcor principles”.
[17]
Even if
the CRTC may review an MAA to ensure that its terms are not inconsistent with
the Act (a question that we need not decide), counsel’s argument requires far
too much to be read into subsection 43(2), which expressly makes a carrier’s qualified
right of access subject to the consent of the municipality. If the municipality
withholds its consent, for whatever reason, the carrier’s remedy is to be found
in the other provision to which subsection 43(2) is expressly made subject,
namely the power in the CRTC under subsection 43(4) to impose terms on the
application of a party. In exercising that power, the CRTC has a broad
discretion to design terms that will best advance the public policies
identified in the Act.
[18]
In our
view, the CRTC was correct to take a relatively narrow view of the scope of the
inquiry under subsection 43(4) once an MAA is in place. It does not call for a
broad examination of the various policy objectives set out in the Act, nor a
balancing of the competing interests of the kind to be undertaken when the
parties have not signed an MAA. The public interest in accessing
telecommunications is also served when the parties to a freely and
expeditiously negotiated agreement are normally able to rely upon it as
governing their commercial relationship.
[19]
Finally,
it is our view that section 32 of the Telecommunications Act, including paragraph
32(d), does not confer independent powers on the CRTC with respect to
MAAs. These particular agreements are governed by the special provisions in
section 43, subject to the general provisions of the Act respecting the factors
to be considered by the CRTC in the exercise of its statutory functions.
[20]
If
Parliament had intended to give the CRTC a broad power to “suspend or disallow”
terms on which municipalities consented to carriers’ access to public highways,
it surely would have said so in section 43. In any event, counsel conceded that
the CRTC could only reopen an MAA when its terms were inconsistent with the Act
or had been negotiated in circumstances that rendered it invalid.
[21]
For these
reasons, the appeal will be dismissed with costs.
“John M. Evans”
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKETS: A-653-05
and
A-654-05
APPEAL FROM THE TELECOM DECISION CRTC
2005-46 DATED AUGUST 25, 2005. (ORDER GRANTING LEAVE TO APPEAL IN DOCKET NO. 05-A-32.)
STYLE OF CAUSE: MTS Allstream Inc. v. The City of Toronto
MTS
Allstream Inc. v. The City of Calgary
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: November 27, 2006
REASONS FOR JUDGMENT OF THE COURT BY: Linden,
Evans & Malone JJ.A.
DELIVERED FROM THE BENCH BY: Evans J.A.
APPEARANCES:
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Michael Koch
Lauren Cappell
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FOR THE APPELLANT
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Andrew
Weretelnyk
Kirsten Franz
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FOR THE RSPONDENT (The City of Toronto)
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Brand Inlow Q.C.
Shawn Swinn
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FOR THE RESPONDENT (The City of Calgary)
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SOLICITORS OF RECORD:
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Goodmans LLP
Toronto, Ontario
|
FOR THE
APPELLANT
|
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City
Solicitor’s Office, City of Toronto
Toronto, Ontario
|
FOR THE
RESPONDENT
(The City of Toronto)
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The City of Calgary Law Department
Calgary, Alberta
|
FOR THE
RESPONDENT
(The City of Calgary)
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Date: 20061127
Docket: A-653-05
Toronto,
Ontario, November 27, 2006
CORAM: LINDEN J.A.
EVANS
J.A.
MALONE J.A.
BETWEEN:
MTS ALLSTREAM INC.
Appellant
and
THE CITY OF TORONTO
Respondent
JUDGMENT
The appeal is dismissed with
costs.
“A.M. Linden”
Date: 20061127
Docket: A-654-05
Toronto, Ontario, November 27, 2006
CORAM: LINDEN J.A.
EVANS
J.A.
MALONE J.A.
BETWEEN:
MTS ALLSTREAM INC.
Appellant
and
THE CITY OF CALGARY
Respondent
JUDGMENT
The appeal is dismissed with
costs.
“A.M. Linden”
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