By Ahmad Hathout
The attorney general, on behalf of Innovation, Science and Economic Development (ISED), is asking the Federal Court of Appeal to intervene in SaskTel’s challenge to the CRTC’s fibre access mandate, arguing the outcome could impact the ability of the federal government to shape telecom policy and impair its cabinet direction power broadly.
Late last week, the AG filed a motion for leave to intervene in SaskTel’s challenge to the CRTC’s decision to force the legacy telcos to open their bundled fibre networks to competitors. SaskTel is arguing there is an inherent conflict between section 10 of the 2023 cabinet direction, which orders the regulator to specifically mandate aggregated fibre access, and section 8 of the Telecommunications Act, which, it argues, only gives cabinet the power to issue directions of “general application on broad policy matters.”
“Section 10 of the Cabinet Direction is, in effect, a substitution of a decision by cabinet for the jurisdiction of the CRTC,” SaskTel is arguing.
If granted intervenor status, the AG intends to argue that the bundled fibre access direction is consistent with the overall objectives of the Telecommunications Act as outlined by section 7 of the law — which lays out the broad policy objectives for Canadian telecommunications, such as enhancing competitiveness and improving the lives of Canadians — and is within the scope of section 8.
“A provision about the general content of a regulatory framework or a policy stance on how to address the competitive imbalance in the telecommunications industry is ‘a broad policy matter of general application’ that relates to the Canadian telecommunications policy objectives,” the AG argues.
To get to that level of understanding, the AG says it wants to provide “necessary context” about the interplay between policy directions and the overall telecommunications regulatory scheme.
The AG is warning that, without a full understanding of this dynamic, the court is at risk of adopting a “narrow interpretation” of section 8, which could “significantly hamper the achievement of the government’s telecommunications policy goals” by effectively cutting off cabinet’s ability to “proactively direct the CRTC.” The risk, according to the AG, is that “decisions taken by the regulator would be inconsistent with, or contrary to the government’s broad policy objectives,” which could lead to inefficiency, regulatory uncertainty for the industry, and impairment when it comes to spectrum management, it said.
“The direction power is an integral element of the structural relationship intended by Parliament to govern the relationship between the executive and the arm’s length telecommunications regulator,” the AG argues. “It gives effect to how that intended relationship is supposed to function, facilitating a transparent approach to the interactions between the executive branch of the government and CRTC as regards to advancing the achievement of broad public policy goals.”
The AG argues that Parliament, through section 8, provided for direct political supervision of the CRTC – both proactively through policy directions and reactively through the ability to petition cabinet on CRTC decisions.
“If the power to direct policy through s. 8 is given too narrow an interpretation, governments could be effectively left only a reactive mechanism (i.e. variance of CRTC decisions by the Governor in Council, or appeals on questions of law or jurisdiction) to try to correct course,” Andre Arbour, director general of the telecommunications policy branch of ISED, said in a supporting affidavit. “These reactive mechanisms are less efficient or effective tools for government to shape telecommunications policy.”
Arbour describes the specific fibre direction at issue as a “high-level course of action that the government has considered to be appropriate to fulfil what it has identified as public policy goals and priorities.
“Prior to issuing the 2023 Policy Direction, the Government pursued and considered other avenues to address the public policy issues it had identified, but ultimately determined that a policy direction would be the most appropriate and effective tool,” Arbour continued.
The court’s decision, the AG further argues, could have far-reaching implications beyond these sections, including on section 7 of the Broadcasting Act, which, similar to section 8 of the Telecommunications Act, gives the government the power to make directions of “general application on broad policy matters.”
“The Court’s interpretation of s. 8 will have a significant impact upon the government’s ability to use the direction power going forward and, specifically, its ability to direct the regulator in implementing Canadian telecommunications policy, and to influence the achievement of the policy objectives set out in s. 7 of the Telecommunications Act,”the AG said.
As the only one of the three largest telecommunications companies that supports the CRTC policy of allowing the national incumbents to use the wholesale internet regime, Telus had filed an intervention asking the court to throw out SaskTel’s 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. The AG, which called this an important argument, said it can also speak to this matter.
Last week, the CRTC set the final rates for access to those bundled fibre facilities.
