OTTAWA – The CRTC on Thursday rejected an application by TerreStar to reduce its regulatory fee obligations by deducting its spectrum leasing revenues.
The Montreal-based mobile satellite and cell services provider filed an application in November asking the CRTC to make a determination that the sale or leasing of spectrum did not qualify as a telecommunications-related expense, which would have reduced its obligation to the National Contribution Fund. The NCF goes to fund broadband infrastructure in the country.
In March 2022, TerreStar filed its annual revenue report and deducted its spectrum leasing revenues. The CRTC said it couldn’t do that. So, the company filed an application challenging the CRTC’s reasoning in November. No one intervened in the matter.
TerreStar’s arguments rest on the fact the licences are regulated by Innovation Canada, which already requires annual licence fees, and because spectrum is not a “facility or apparatus” as required by the Telecommunications Act to be categorized as a telecom service.
On Thursday, the CRTC – which noted that TerreStar is the only company to actually attempt such a maneuver – reaffirmed its decision that spectrum is, indeed, a telecommunications service.
“The Commission stated in Order 2001-288 that for the purposes of calculating contribution eligible revenues pursuant to Decision 2000-745, services that are incidental to the business of providing telecommunications services are services that the Commission has treated as or determined to be telecommunications services, in accordance with section 23 of the Act,” the CRTC said in its decision.
“TerreStar took a narrow view when constructing its argument and relied solely on subsection 2(1) of the Act for the definition of telecommunications service,” the CRTC added. “This definition does not account for the inclusion in section 23 of “[…] any service that is incidental to the business of providing telecommunications services.”
While the question of whether wireless signals constitute telecommunication facilities was not fully considered in this decision, Telus has filed an application this week asking the Supreme Court of Canada to determine whether a “transmission line” under the Telecommunications Act includes wireless infrastructure.
