By Ahmad Hathout
The CRTC did not establish that it has jurisdiction over long-distance calls from correctional facilities when it ruled it doesn’t regulate those rates, opening the door for provincial courts to make conflicting determinations on proper charges in civil actions, according to applications filed by the province of Ontario and Bell.
The regulator released a decision in December clarifying that it has not regulated inmate long-distance calls since 1997, and that it does not have the authority to adjust rates that were charged by Bell on a retroactive basis.
The decision followed an application that asked the regulator to clarify certain issues, including that it has forborne from regulating those rates between 2013 and 2021 and whether it can provide retroactive financial relief for applicants who are suing Bell and Ontario for $152 million in a class action lawsuit claiming the telco – since replaced as the service provider for Ontario correctional facilities – charged “unconscionable” long-distance rates between those years. (Bell and Ontario argue that these rates were set appropriately to match those charged to customers in the local community.)
The class action lawsuit was paused until the CRTC made a determination on those questions. But the answer to one central question was left out of that decision, allege review-and-vary (RV) applications filed by Ontario and Bell: Is forbearance – that is, the absence of regulation – itself a form of regulation? The commission only said in its decision that it has the power to regulate if further action is needed.
Without an answer to that question, according to Ontario and Bell, provincial courts could make conflicting determinations as to what proper rates should have looked like between the period raised in the class action.
“If the Commission will not clarify that forbearance is a proactive use of regulatory power, it will undermine forbearance as an effective regulatory tool,” Bell said in its RV application. “Civil proceedings (such as the class proceeding underlying the Decision) will arise that question the reasonableness of forborne rates.
“This is inconsistent with the CRTC’s regulatory framework. In addition, by failing to send a clear message to courts that forbearance is the proactive use of regulatory power, the Commission risks undermining this power all together. For example, allowing courts to assess whether forborne rates are reasonable means that market forces are no longer setting rates; justices of the various superior courts across the country would. This in turn undermines the business certainty that carriers require to make the capital investments required to improve telecommunications.”
Bell said the proper action would be for the parties to apply to the CRTC to remove forbearance.
A lower Ontario court ruled – and the Court of Appeal upheld – that the rates issue falls within the scope of the CRTC’s ambit, and it was there that the aforementioned questions would need to be placed. As such, the Court of Appeal put a temporary stay on the class action until those questions were addressed.
In Janaury 2024, Bell filed a Part 1 application also requesting the CRTC determine that it did not forbear from its power to pre-approve rates when — in 1996, the year before its forbearance decision — it approved Bell’s general tariff, GT 292, which spelled out that inmate calls would be charged similarly to those charged to the general public in the local community: “Inmate service calls are rated in the same manner as calls originating from other public telephones except that payment options may be limited based on the requirements of the institution, technological limitations and Company collection policies.”
Bell also asked in that application that if the CRTC determines it did forbear, it confirm that “forbearance does not result in the Commission abdicating its jurisdiction,” and that it should “clarify that forbearance is a regulatory tool used to obtain a regulatory objective and that its use does not provide civil courts with free reign to interfere with telecommunications policy.”
Bell said, had the CRTC simply determined that forbearance is a regulatory mechanism – instead of simply saying in its conclusion that rates are forborne “from regulation” – then “the Commission has already ‘adjudicated’ the issue of just and reasonable rates when it first decided, and continued, a policy of forbearance.”
Bell is asking for the commission to vary the decision. Alternatively, if the commission finds no error, the telco is asking that the CRTC provide guidance about whether it exercising its forbearance power was an exercise of jurisdiction over telecom rates.
Ontario is similarly asking the commission to “vary its decision under s.62 to correct these errors by (1) confirming that in 97-19, it exercised jurisdiction over the rates in question by determining the s.7 policy objectives and interests of users were best-served by subjecting rates to competition in the marketplace to ensure they were just and reasonable consistent with its obligations in s.47(a) of the [Telecommunications Act], and (2) adopting an interpretation of s.34 that accords with the modern principle and acknowledges there is no gap in the Commission’s national oversight of telephone rates.”
Bell had initially filed an application to the Federal Court of Appeal challenging the CRTC’s alleged oversight, but later asked and was granted a suspension of its application after Ontario filed its RV application to the CRTC.
