By Ahmad Hathout
OTTAWA – Telus is accusing the CRTC of deviating from precedent when it argues that spectrum sale and leasing revenues count toward the telecoms’ total operating revenues for the purposes of calculating what fees are owed to the commission.
The Vancouver-based telecom argued in a submission Thursday that those revenues have traditionally not been filed under total operating revenues when using the generally accepted accounting principles (GAAP) for financial reporting, which has been used by the CRTC to calculate contributions owed to the commission.
Telus was backing a point made by mobile satellite and cell services provider TerreStar, which filed an application to the regulator asking that it exclude those spectrum revenues from what the telecoms owe to the National Contribution Fund, which uses the pooled money to support broadband infrastructure across the country.
“The implications of the Commission’s Decision is that the quality and usefulness of contribution-specific financial information will be diminished,” Telus said in its application. “It will be difficult to review multiple companies’ contribution financials side-by-side, or the same company’s contribution statements year-over-year, because there is no guarantee that accounting principles have been followed to the same set of standards.
“The Decision may also create confusion among stakeholders since there will be discrepancies in the total operating revenues reported by large, publicly accountable TSPs in their contribution statements versus their other financial statements,” Telus said.
It added telecoms will need to create new reporting just for the CRTC’s contribution regime, which would not be auditable for accuracy or monitored for compliance in the way regular financial disclosures are.
Telus said deviating from GAAP for the purposes of contribution reporting rubs against the Telecommunications Act’s objective of facilitating the orderly development, efficiency and proportionality of the telecom system.
It also said including spectrum revenues into the contribution regime would provide no benefits because the purchaser of the spectrum would just deduct the cost from their end.
The CRTC rejected TerreStar’s initial application, to which the Montreal-based company filed an appeal late last month.
In the appeal application, TerreStar argued that the CRTC made its decision based on unsupported evidence that all providers actually report their spectrum sale proceeds to the regulator. If the providers are not providing those figures, it argues, then how would the CRTC know it should factor them into the regulatory calculation?
