By Ahmad Hathout
The city of Ottawa is arguing before the CRTC that Videotron is relying on the wrong agreement in its request for the regulator to force the city to reimburse the carrier for having to move its transmission lines for the construction of city projects.
Videotron filed a Part 1 application last month alleging the city has refused to compensate it $300,000 for the move to make way for projects at Montreal Road and Woodroffe Avenue because it was made at the request of its subsidiary Hydro Ottawa, which the telecom argued doesn’t make sense because the utility is owned by the city and it was the city that required it to attach its equipment on the hydro poles.
But the city said in its reply to the application dated Friday that this argument is moot because the governing municipal access agreement (MAA) in the case of the transmission lines in question included an explicit proviso that if a request to relocate equipment is made for municipal purposes, all relocation costs must be borne by the carrier. Put another way, the 2008 Videotron MAA on which the carrier relies on for this application is not the one that applies to these particular lines, the city alleges.
That’s so, the city argues, because a different carrier installed the lines and initiated the correct MAA with that explicit provision; Videotron, at some point, absorbed the lines from said carrier through an acquisition, therefore adopting the correct MAA.
The city is now urging the CRTC not to grant Videotron’s application because then it would set a dangerous precedent of allowing a carrier to pick and choose which MAA would be most favourable to it.
“Granting the Order sought by Québecor Média would, in essence, allow a carrier to circumvent the terms of consent that were applicable to telecommunications assets at the time these assets were installed,” the city said in its reply to Videotron’s application.
“If one follows the rationale underlying this Application, a carrier could, through paper asset transfers, render established MAAs pointless by bringing certain assets under the purview of a MAA the carrier deems more favourable in any given circumstances,” it added.
“Invoking the more favourable terms of the asset-purchasing carrier’s MAA, and thereby disregarding the terms under which the assets were actually installed in the first place, runs counter to the very purpose of the municipal consent framework as set out in the Telecommunications Act and as it has been developed by the Commission over time,” the city further argues. “The order sought by Québecor Média would eliminate all predictability and its reliability of MAAs over time.”
The correct MAA, according to the city, was signed on February 20, 2008 by the original lines owner, SRDP Telecommunication Inc. In the section under “relocation of equipment,” it explicitly states the following:
“SRDP’s relocation or adjustment shall be at its own expense if the City’s request is for municipal purposes. Any relocation or adjustment made at the request of a party other than the City shall be at that third party’s expense.”
Further stipulations in the February 20 MAA include that the SRDP “may transfer all or part of this Agreement to an Affiliate of SRDP,” which includes the parent company; “any transferee or assignee shall be bound by the provisions of this Agreement as they relate to the interest transferred or assigned”; and that the agreement is binding on “their successors and assigns.”
In October 2013, several entities merged and took over the assets in question, including the accompanying MAA. Fibrenoire Inc. and a subsidiary called Canadian P2P Fibre Systems Ltd came into possession of the assets in question. Videotron parent company Quebecor then acquires Fibrenoire.
But the city is taking it a step further, asking the commission to force Videotron to pay it $45,000 for costs it incurred to install new ducts “specifically redesigned by Videotron to accommodate the transmission lines that are now apparently owned by Videotron” at the Montreal Road project.
Rogers and Telus both separately submitted supporting arguments in Videotron’s favour, but it’s not clear if they were privy to Ottawa’s arguments as all their submissions are dated around the same time. Both rely on and reference Videotron’s original application.
Rogers and Telus said Videotron’s interpretation of how the CRTC handles cost allocation when it comes to reallocations on municipal-owned structures is the correct one, according to separate submissions to the regulator this past week.
The CRTC’s determination as to cost-sharing on such a reallocation comes down to who requests the move and the reason for it.
“The facts remain that the relocation is initiated by the City, is at the request of the City, and is required to accommodate a City project,” Rogers said in its submission, noting Videotron was contractually obligated to attach to third-party structures where technically and economically possible. “The support structure owner is not relocating its structures for its own purposes; it is doing so to accommodate a City request and a City requirement.”
Rogers, a non-incumbent cable company that relies on these structures to expand 5G technology, also said it is especially “offensive” that the city would argue that it could avoid reimbursing the attacher because the request was made by a third-party structure owner.
“More generally, shared use of support structures is in the public interest and should not be penalized,” Rogers added. “Non-incumbent competitive carriers and cable companies have traditionally not been permitted to erect, and have not erected, their own poles for their transmission lines. Instead, they have utilized poles owned by third parties, such as Hydro Ottawa, as much as possible. This is an efficient use of existing resources. It is also in the public interest, as it avoids the installation of duplicate pole lines that would result in increased infrastructure clutter on ROWs.
Telus agreed, saying not reimbursing the attacher in this case would “artificially incent carriers to deploy their own structures, not to mention clutter rights-of-way, instead of sharing where it was otherwise feasible.
“The Commission, under its powers, is able to set conditions of access, including relocation terms, with public authorities,” Telus said. “Since the City has initiated the relocations and granted consent, they are obligated to reimburse Videotron for its share of the relocation costs incurred as a result of the projects, subject to any agreements between the parties to the contrary.”
