By Ahmad Hathout
The Federal Court of Appeal will hear a SaskTel challenge that alleges the CRTC’s decision to mandate access its bundled fibre facilities was based on a cabinet direction that conflicts with the Telecommunications Act.
The court approved the telco’s leave to appeal application on Friday, just over a year after it was filed in September 2024.
The gist of the argument is that the CRTC allegedly preordained a decision based on what it was told by the federal government, which, through section 10 of the 2023 cabinet direction, ordered it to adopt a specific policy of mandated access to the bundled fibre facilities of the telcos.
The problem, according to SaskTel, is that section 8 of the Telecommunications Act limits the Governor in Council to issue directions of “general application on broad policy matters” on telecom policy objectives.
In other words, narrowly ordering mandated access to aggregated facilities by competitors is not broad — per what’s required of the Telecommunications Act — but very specific, SaskTel conveyed, creating conflict between the two sections.
Why does SaskTel argue this? Because the CRTC allegedly did not take into consideration that the Crown corporation is a unique telco compared to Bell and Telus: it has a population base of 1.2 million people, has a serving territory with low population density, and has a statutory mandate requiring it to focus on the population of Saskatchewan, while the much larger incumbent telcos are national.
“By completely eliminating the Commission’s discretion in respect to aggregated wholesale high-speed access services, section 10 of the Cabinet Direction conflicts with section 47 of the [Telecommunications Act], which requires the Commission to exercise its powers and perform its statutory duties with a view to implementing the Canadian telecommunications policy objectives of section 7 and in accordance with the Cabinet Direction,” SaskTel said in its leave application.
“Section 10 of the Cabinet Direction is, in effect, a substitution of a decision by cabinet for the jurisdiction of the CRTC,” it added. “The overall regulatory design gives the CRTC broad and discretionary powers to regulate a complex industry at a national level. This regulatory design is incompatible with a broad construction of section 8 of the [Telecommunications Act].”
Having to mandate access to its networks threatens its investment thesis and, therefore, its ability to serve rural and remote communities, SaskTel has argued.
Telus filed an intervention asking the court to throw out the leave application largely for procedural reasons: that SaskTel, it claims, cannot challenge the legality of the cabinet direction through an appeal from a CRTC decision because that would fly in the face of the doctrine of collateral attack.
“This is not an argument about the legality of the CRTC’s Final Decision – it is an attack on a different decision altogether,” Telus argues in its submission. “Contrary to SaskTel’s suggestion, its complaints about the 2023 Cabinet Direction are not a legal question that can be embedded into an appeal of the Final Decision. SaskTel is attempting to challenge the validity of the GIC’s order without seeking judicial review of it. This cannot be done.”
Beside that, Telus argues that the CRTC itself said its decision stands on its own – a decision made independent of the federal government and regardless of any contested sections of the policy direction.
TekSavvy filed a separate submission also asking the court to reject SaskTel’s application. The wholesaler, whose submission was backed by Quebecor, argues that the contested sections of the cabinet direction are consistent with each other.
“The Commission must mandate the provision of an aggregated wholesale high-speed access service — that is additional to any other types of wholesale high-speed access services that are mandated — until it determines that broad, sustainable and meaningful competition will persist even if the provision of an aggregated service is no longer mandated,” section 10 of the cabinet direction reads (underline emphasis added by TekSavvy).
This section, TekSavvy argues, gives the CRTC leeway to determine – in light of its own analysis – whether it should continue to allow for last-mile fibre access, which the regulator determined in the affirmative.
“The latter half of section 10 demonstrates it is not prescriptive or overly specific,” TekSavvy says. “Rather, it gives the CRTC a general direction to determine whether, in light of the state of competition in the internet services industry, any particular aggregated wholesale HSA service should be mandated.”
The appeal court’s decision to hear the matter comes a couple of weeks after it granted Cogeco and Eastlink a hearing on a related matter: that the CRTC allegedly made several errors when it rejected their request to relook at its decision to allow the three largest telecoms wholesale access to their cable networks.
