Incumbents wanted to postpone until it can be done in person
By Ahmad Hathout
OTTAWA – The Federal Court of Appeal will hear the wholesale rate appeal via online videoconference in June, the court said Monday, after the appellants sought last week to have the hearing held in person – even if that meant delaying the proceeding.
Eastlink, Rogers, Cogeco, Shaw, and Videotron as well as Bell sent letters to the court last week requesting the delay because they argued the complexity of the case could not be hashed-out over videoconference. The arguments were challenged by TekSavvy and the Canadian Network Operators Consortium (CNOC), which said the relatively new technology was an effective method to hear cases.
On Monday, Judge David Stratas agreed with the latter two organizations, reasoning that the parties agreed throughout the process that the matter — the CRTC’s August decision to slash the wholesale internet rate smaller carriers pay bigger ones for network space — needed to be resolved on an expedited basis, which led the court to exempt it from the suspended cases claimed by the Covid-19 pandemic; that throughout this time, videoconference wasn’t in dispute until recently; and, in any case, the court’s experience with videoconferences is that it “worked well and provide a viable means of hearing appeals.”
The hearing will, therefore, take place over videoconference on June 25 and 26.
In mid-March, due to the spread of the Covid-19 virus, the Federal Court pushed back in-person hearings to April 17. Then, earlier this month, the court extended the suspension of in-person hearings until the end of this month, while scheduling a number of deliberations over videoconference.
The uncertainty surrounding the resumption of in-person hearings led counsel to the cable carriers and Bell to issue letters to the court on Wednesday asking it to ensure the unique nature of the appeal not be held by any method other than in-person — even if that meant postponing it.
“The Consolidated Appeal is complex and concerns numerous errors of law and jurisdiction which occurred during a multi-year rate setting exercise, in which 18 separate issues were considered by the CRTC,” the letter said, pointing to the vast trove of documents that the appeal will handle, including confidential material.
“During the hearing… the Parties may need to direct the Court to a number of portions of this Confidential Appeal Book,” the letter said. “Over video-conference, it may well be awkward, time consuming and difficult to ensure the correct portions of the confidential materials are before the Panel, without compromising the confidentiality of these commercially sensitive documents.”
The letter also said if done remotely, it will be “difficult to address efficiently and effectively” questions related to the complex technical material, the understanding of which will be critical for millions of dollars and the “future of internet infrastructure investment in Canada.”
This issue is compounded by the high number of parties involved in the hearing, which would require them to stream all at the same time, the letter said. “Video-conferencing platforms such as Zoom or WebEx are not ideal in such circumstances,” the letter said, “and may become unwieldy, rendering the hearing difficult to proceed with and to follow.”
The appeal will deal with whether the CRTC erred in law when, in August, it cut the rate at which internet resellers pay to use parts of the incumbents’ networks by between 15% and 43% and 3% and 82% for certain kinds of rates, while ordering the incumbents to pay the difference between the interim rate in 2016 and the final rate in retroactive payments to the resellers — a total of around $325 million that Bell has called an “unconstitutional tax.” CNOC has a different point of view, of course.
“A delay this long would have serious consequences for the respondents and the Canadian public.” – CNOC
Bell agreed with the cable companies in a responding letter on Wednesday. “It would be technically impractical, unfair to the parties, and a disservice to the Court to attempt to conduct a remote videoconference hearing of this complex appeal,” it said.
Bell argued in previous court documents that the CRTC wholesale decision does not comply with section 47 of the Telecommunications Act to develop a telecommunications system throughout Canada, extend reliable communications to rural areas, enhance international competitiveness, allow for increased reliance on market forces, encourage innovation, use measures that are proportionate to their purpose and ensure competitive neutrality and not artificially favour resellers.
Respondents CNOC and TekSavvy said in response to the letters on Thursday that they disagree on the need for an in-person hearing and believe that the appeal should be held in June via teleconference.
In its own letter Thursday, CNOC noted, with TekSavvy agreement, that videoconferencing “has emerged as an efficient and effective alternative to an in-person hearing,” citing a number of complex cases that the Federal Court has and will hear over that method, including in the patent infringement case of Rovi Guides versus Videotron. They said that the profession should adapt to these new technologies, anyway.
Addressing confidential and logistical concerns, CNOC said confidential material is “unlikely” to feature in oral argument and, even if it does, the court will have mechanisms to safeguard that information in any setting. The organization also said videoconferencing technology is capable of handling a high number of users at the same time without trouble, again referencing court hearings that have successfully used the technology. With the hearing still more than a month away, CNOC said solutions can be found within that time to ensure that the system isn’t overwhelmed, “for example, by giving all counsel access to the video feed but limiting participation via webcam and microphone only to those presenting oral argument.”
CNOC said it is ultimately concerned that the court’s stay on the new wholesale rates have already been lengthy — the stay was based on undertakings that were intended to have an expeditious process — and any delay would just bely those undertakings. Even with governments now easing restrictions on gatherings, “it is reasonable to expect that a full in-person hearing may only be possible sometime in late 2020 or even 2021, with judgment to follow sometime thereafter. A delay this long would have serious consequences for the respondents and the Canadian public.”
The organization, which represents smaller internet service providers, and TekSavvy suggested that if the court felt an in-person hearing is required and there’s a delay, then the incumbents should justify why the stay should remain until it can be heard in person. In the meantime, CNOC said the new rates should be allowed to take effect if a delay was required.
