OTTAWA – TerreStar this week filed a review and vary application challenging the CRTC’s decision in June to deny its application to reduce its regulatory fee obligations by deducting its spectrum leasing revenues.
The regulator had rejected the Montreal-based mobile satellite and cell services provider’s argument that the revenues generated from 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.
TerreStar argues that the CRTC made a decision that is inconsistent with previous determinations in 2000 and 2019, despite the commission arguing it is in-line with previous rulings. In those decisions, TerreStar alleges that the regulator determined that regulatory fees would be based on “total operating revenues.” Because TerreStar argues that one-time or infrequent spectrum leases are not part of a business’s “normal daily operations of a business,” it cannot be captured by the regulatory fee arrangement.
The company also said the decision was made with unsupported evidence that all providers actually report their spectrum sale proceeds to the regulator, which is required for the CRTC to determine how much the providers owe to the central fund. If the providers are not providing those figures, then how would the CRTC know it should factor them into the regulatory calculation, it argues.
The company is also arguing the decision wasn’t fair because the CRTC did not alert it to the fact it would use section 23 of the Telecommunications Act to ground its ruling.
“TerreStar had no notice of the fact that the Commission, or its staff, considered s. 23 of the Act to be relevant to determining whether spectrum subordination was a telecommunications service,” it said in the review and vary application.
It also said that it wasn’t fair that the CRTC determined that the sale of spectrum was also subject to regulatory fees even though TerreStar was only requesting a determination on spectrum leases, thus it’s unfair that no provider had the opportunity to make submissions on that.
