A-466-83
CNCP Telecommunications (Appellant)
v.
Canadian Business Equipment Manufacturers
Association, Canadian Coordinating Council on
Deafness, Canadian Federation of Communica
tions Workers, Canadian Hearing Society,
Canadian Industrial Communications Assembly,
Canadian Manufacturers Association, Canadian
Office Employees Union, Canadian Petroleum
Association, Canadian Radio Common Carriers
Association, Canadian Telecommunications
Group, Canadian Trans-Lux Corporation, Con
sumers' Association of Canada, Director of Inves
tigation and Research, Combines Investigation
Act, Executone Limited, Government of Ontario,
Government of British Columbia, Hard of Hear
ing Club of Ottawa, ITT Industries of Canada,
National Anti-Poverty Organization, National
Interconnect Association of Canada, Ontario Hos
pital Association, Retail Council of Canada,
ROLM Corporation of Canada Limited, Telecen-
ter, Telephone Answering Association of Canada,
TRW Data Systems and Telecommunications
Workers Union (Respondents)
Court of Appeal, Heald, Mahoney and Mac-
Guigan JJ.—Ottawa, June 4 and 11, 1985.
Telecommunications — Powers of CRTC to regulate sale
price of terminal equipment — Order prohibiting sale of new
terminal equipment below cost, ensuring carriers not cross-
subsidize market with revenues from monopoly services —
Railway Act authorizing CRTC to regulate telegraph and
telephone tolls — Appellant alleging sale price of terminals
not toll — Respondents relying on CRTC's power pursuant to
s. 321(2) to forbid practicing of undue or unreasonable prefer
ence or advantage over competitors — Whether terminals are
'facilities" falling within scope of s. 321(2) — According to
definitions, telephone and telegraph terminals qualifying as
'facilities" — National Transportation Act indicating legisla
tive intention to confer broad powers on CRTC — No limit in
s. 321(2) restricting prospective action — CRTC reasonably
exercising power in regulating sale price of terminals —
Railway Act, R.S.C. 1970, c. R-2, ss. 2 (as am. by R.S.C. 1970
(1st Supp.), c. 35, s. 1), 320(2) (as am. by R.S.C. 1970 (1st
Supp.), c. 35, s. 2), (12) (as am. by R.S.C. 1970 (2nd Supp.), c.
10, s. 65; S.C. 1974-75-76, c. 41, s. 1), 321(2) (as am. by
R.S.C. 1970 (1st Supp.), c. 35, s. 3), (5) — National Transpor
tation Act, R.S.C. 1970, c. N-17, ss. 45(2) (as am. by S.C.
1977-78, c. 22, s. 18), 46(1), 57(1), 64(2) (as am. by R.S.C.
1970 (1st Supp.), c. 44, s. 10; (2nd Supp.), c. 10, s. 65), (7) (as
am. by R.S.C. 1970 (2nd Supp.), c. 10, s. 65) — Federal Court
Rules, C.R.C., c. 663, R. 1101.
Practice — Costs — Notice of motion pursuant to R. 1305
seeking exemption from producing other documents, for pur
pose of appeal, than CRTC decision — Respondents requiring
further documents — Appeal Book running to 7172 pages —
Cost to Courts $19,788.85 — Apparent at hearing that 200
pages sufficient to dispose of issue — Blatant irresponsibility
and squandering of public funds — Jurisdiction of Court as to
costs expressed in Rules — No basis for requiring parties to
reimburse Registry — Proceedings neither frivolous or unwar
ranted but 7000-page Appeal Book unnecessary — Federal
Court Rules, C.R.C., c. 663, RR. 324, 1108, 1305.
Attaching equipment to the Bell system not provided by that
company had long been prohibited. In a decision, part of which
is the subject of this appeal, the CRTC made a final determina
tion that a liberalized attachment policy would be in the public
interest. The balance of the Commission's decision covered the
extent of liberalization authorized, technical standards and the
conditions under which carriers might participate in the termi
nal equipment market. The portion of the decision under appeal
is that requiring carriers not to sell their equipment below cost
price in order to ensure that revenues from monopoly services
are not used to cross-subsidize sales of new terminals. The
appellant and respondents Bell Canada and British Columbia
Telephone Company are united in disputing the order on the
ground that the CRTC lacked jurisdiction to regulate the sale
price of telecommunications terminal equipment.
Held, the appeal should be dismissed.
Per MacGuigan J.: The CRTC's basic power to regulate tolls
is found in subsection 320(2) of the Railway Act. The appellant
and its allies, relying on the definition of tolls found in the Act
argue that the sale price of terminal equipment is not a toll for
the lease of telecommunications equipment within the meaning
of subsection 320(2), as the transaction involves an absolute
transfer of property.
In fact, the respondents rely primarily on subsection 32l (2)
of the Act forbidding, in respect of tolls, services or facilities
provided by the company as a telegraph or telephone company,
the granting of any undue or unreasonable preference or advan
tage to a person or company. It is argued by the appellant that
the terminals to be sold are not "facilities" within the meaning
of subsection 321(2) because the word connotes a network of
fixed assets and not a single terminal. However, as the defini
tions in various French and English dictionnaries express,
"facilities" has a very broad meaning that does not necessarily
imply a system but can also include a single appliance designed
for a specific function. The term "facilities" cannot be limited
to the meaning set forth by the appellant and must be con
strued to include telephone and telegraph terminals.
Furthermore, the argument put forward by the appellant
that in providing facilities it is not acting as a telephone and
telegraph company cannot be sustained in light of the broad
powers conferred upon the CRTC by the Railway Act and the
National Transportation Act. The definition of "company" in
subsection 320(12) extends the powers of the CRTC to all
business carried on by companies dealing in telephone and
telegraph systems, within the legislative authority of the Parlia
ment of Canada. Therefore, subsection 321(2) must be inter
preted to apply to facilities provided in any part of the business
of telegraph or telephone companies.
It is also alleged that subsection 321(2) cannot have a
prospective application, that in order to decide that a prefer
ence or advantage is undue or unreasonable, the CRTC must
evaluate the situation at the time of its occurrence. In the
present case, the appellant has not yet entered the market.
However, the Railway Act and the National Transportation
Act provide the CRTC with sufficient powers to prevent the
granting of undue or unreasonable preference or advantage by
any means it sees fit. The CRTC's regulatory scheme for the
sale of new telecommunications terminal equipment is a reason
able and proper exercise of these powers.
Per Mahoney J.: A notice of motion pursuant to Rule 1305
was filed by the appellant requesting the authorization to
produce only the CRTC decision as being the only relevant
document for the purposes of the appeal. The respondents filed
affidavits accompanied by a schedule listing further documents
they considered necessary. Following consideration of the
motion the Judge ordered that all documents listed in the
schedule be included in the Appeal Book. The resulting Appeal
Book contained 7172 pages and was produced in eleven copies
at a cost to the Court of $19,788.85. At the hearing, it became
apparent that an Appeal Book of fewer than 200 pages would
have been sufficient for disposition of the appeal. Although all
documents produced were within the scope of Rule 1305, it was
blatantly irresponsible to have sqandered public funds by pro
ducing such an Appeal Book. The jurisdiction of the Court
being set out in the Rules, there exists no basis upon which a
party could be required to reimburse the Registry for unjusti
fied and excessive costs. Although the appeal was not frivolous,
a 7000-page Appeal Book was unnecessary.
CASES JUDICIALLY CONSIDERED
APPLIED:
Ward v. Mayor of Borough of Portsmouth, [1898] 2 Ch.
191.
CONSIDERED:
R. v. McLaughlin, [1980] 2 S.C.R. 331; Greater Win-
nipeg Cablevision Ltd. v. Public Utilities Bd., [1979] 2
W.W.R. 82 (Man. C.A.).
COUNSEL:
M. H. Ryan and Michael Wand for appellant.
C. C. Johnston, Q.C. for British Columbia
Telephone Company.
Peter J. Knowlton and D. E. Henry for Bell
Canada.
C. L. Campbell, Q.C. and P. R. Jervis for
respondents Canadian Industrial Communica
tions Assembly, Canadian Trans-Lux Corpo
ration, Executone Limited, Ontario Hospital
Association, Telephone Answering Associa
tion of Canada.
Gordon E. Kaiser for Director of Investiga
tion and Research, Bureau of Competition
Policy.
Gregory A. Van Koughnett and Sheridan E.
Scott for Canadian Radio-television and Tele
communications Commission.
SOLICITORS:
Law Department Canadian Pacific, Toronto,
for appellant.
Johnston & Buchan, Ottawa, for British
Columbia Telephone Company.
Law Department Bell Canada, Hull, for Bell
Canada.
McCarthy & McCarthy, Toronto, for
respondents Canadian Industrial Communica
tions Assembly, Canadian Trans-Lux Corpo
ration, Executone Limited, Ontario Hospital
Association, Telephone Answering Associa
tion of Canada.
Gowling & Henderson, Ottawa, for Director
of Investigation and Research, Bureau of
Competition Policy.
Avrum Cohen, Ottawa, for Canadian Radio-
television and Telecommunications Commis
sion.
Deputy Attorney General of Canada for
Attorney General of Canada.
The following are the reasons for judgment
rendered in English by
MAHONEY J.: I concur in the reasons for judg
ment of Mr. Justice MacGuigan. My own reasons
are directed only to the question of costs which I
raised at the conclusion of the hearing of this
appeal.
By application filed December 20, 1982, the
appellant, hereinafter "CNCP", sought leave to
appeal the subject decision of the Canadian Radio-
television and Telecommunications Commission,
hereinafter "CRTC" on the following grounds:
1. The CRTC erred in holding that it had authority to regulate
the price at which CNCP Telecommunications sells terminal
equipment; and
2. Such further and other grounds as counsel may advise and
this Honourable Court permit.
By order made March 21, 1983, the Court
ordered:
This application for leave to appeal is granted.
The grounds of appeal were never added to.
Consequently, the only ground of appeal argued
was that stated in paragraph 1 above.
The notice of appeal was filed April 7, 1983,
and with it a notice of motion, pursuant to Rule
1305 [Federal Court Rules, C.R.C., c. 663], for
an order:
... directing that, for the purposes of the Appeal, the Appeal
case shall consist of Telecom. Decision CRTC 82-14 of the
Canadian Radio-television and Telecommunications Commis
sion dated November 23, 1982 and that the other material
referred to in Rule 1305 shall be dispensed with, or such other
order as seems just.
That application was supported by an affidavit
describing the extent and nature of the CRTC's
hearings and deposing that the appellant did not
intend to rely on any of the documentation pre
sented to or generated during or as a result of the
hearings except the decision itself and expressing
the opinion that "none of the documents apart
from that decision would assist this Court in the
disposition of the present appeal".
Bell Canada, British Columbia Telephone Com
pany, hereinafter "B.C. Tel."; the Director of
Investigation and Research, Combines Investiga
tion Act [R.S.C. 1970, c. C-23], hereinafter "the
Director", and the following other respondents,
hereinafter collectively "the users": Canadian
Industrial Communications Assembly, Canadian
Trans-Lux Corporation, Executone Limited,
Ontario Hospital Association and Telephone
Answering Association of Canada, as well as the
CRTC duly filed notices of intention to partici
pate. The users were represented by the same
counsel and participated as a group. Bell Canada
and B.C. Tel. supported CNCP's application. The
CRTC, the Director and the users opposed it, the
CRTC and the Director by representations, the
users by affidavit, to each of which was appended
a very similar schedule listing the documents, in
addition to the decision, which they considered
necessary for the proper determination of the
appeal.
The Judge considering the motion, which was
dealt with under Rule 324 or written representa
tions without personal appearances, had no real
option at that stage, but to accept the appreciation
of the CRTC, the Director and the users as to
what was necessary to be included in the Appeal
Book for the proper determination of the appeal.
He ordered that, eliminating duplications, every
thing in the schedules to the users' affidavit and
the Director's and CRTC's representations be
included as well as a copy of Bell Canada's
application which had given rise to the hearing and
which was not mentioned in any of the schedules.
The Bell application runs to about 70 pages, the
decision to 83.
In the result, a 56-volume Appeal Book, running
to 7172 pages was produced in 11 copies: one for
each of the six parties, one for each of the three
Judges, one for the record and one for the Court's
Toronto District Office because that is where the
proceedings were commenced. The cost to the
Court was $19,788.85.
It is apparent from a perusal of the factums
submitted by the parties and was apparent at the
hearing that CNCP was entirely correct in its
appreciation of what was necessary to be contained
in the Appeal Book for a proper disposition of the
appeal. It ought to have contained fewer than 200
pages.
So far as I can see, nothing is included in the
Appeal Book that is not within the contemplation
of Rule 1305. However, I regret that this Court
must stand idly by and acquiesce in the squander
ing of public funds manifested in this appeal. If I
could find a basis in law for doing so, I would
order the users to reimburse the Registry $6,000. I
see no point in shuffling public money from one
emanation of the Crown to another and so would
not order the Director or the CRTC to make a
similar reimbursement notwithstanding their
manifest irresponsibility as to the expenditure of
public monies. The latter may, in any case, be
exempted by subsection 64(7) of the National
Transportation Act [R.S.C. 1970, c. N-17 (as am.
by R.S.C. 1970 (2nd Supp.), c. 10, s. 65)].
The jurisdiction as to costs, vested in this Court
by Parliament, must be expressed by Rules, made
by the Judges and approved by the Governor in
Council. Aside from the reimbursement contem
plated by the Rule 1108, there appears no basis
upon which a party can be required to compensate
the Registry for waste occasioned by his
irresponsibility.
Rule 1108. Where, in the opinion of the Court, a proceeding in
the Court is frivolous, unwarranted or otherwise not brought in
good faith, the Court may, by its judgment disposing of the
matter, order the party by whom the proceeding was instituted
or carried on to pay to the Registry an amount in respect of the
work done and expenses incurred by the Registry in connection
with the matter under Rule 1206, Rule 1306 or Rule 1402 or
otherwise, which amount shall be fixed by the judgment.
The proceeding here was neither frivolous or
unwarranted even if the insistence by the users, the
CRTC and the Director on over 7000 unnecessary
pages of Appeal Book was.
* * *
The following are the reasons for judgment
rendered in English by
MACGUIGAN J.: Despite the passage of more
than four years from the first notice dealing with
the subject-matter of this appeal, and the 56
volumes in the record before us, the issue before
this Court is one of narrow statutory interpreta
tion.
This is an appeal from a decision (Decision
82-14) of the respondent Canadian Radio-televi
sion and Telecommunications Commission
("CRTC") of November 23, 1982, pursuant to
subsection 64(2) of the National Transportation
Act [as am. by R.S.C. 1970 (1st Supp.), c. 44,
s. 10; (2nd Supp.), c. 10, s. 65], according to which
an appeal lies from the Commission to this Court
"upon a question of law, or a question of jurisdic
tion, upon leave therefor being obtained ...".
Leave to appeal was granted by this Court on
March 21, 1983.
For many years the attachment to Bell Canada's
network of terminal equipment not provided by
Bell was forbidden, but Decision 80-13 [6 C.R.T.
203] and 81-19 prescribed a policy of liberalized
terminal attachment on an interim basis. In the
present decision the CRTC made a final determi
nation that such a liberalized policy is in the public
interest, and then proceeded in the remainder of its
decision to deal with the consequent issues of the
degree of liberalization to be allowed, the technical
standards to be applied, and the terms and condi
tions under which the carriers should participate in
the terminal equipment market.
The only part of the decision which is in dispute
is that dealing with the sale of new terminal
equipment:
Regulatory Treatment of sale prices
Sale of new terminal equipment
With regard to the sale by carriers of new terminal equipment
the following requirements will apply:
1. For the purposes of these requirements, new terminal equip
ment shall include all terminal equipment which has not previ
ously been in service and is not from an inventory line which
the carrier is no longer replenishing.
2. Sales of each model type of new terminal equipment shall be
at a price that shall not be less than a floor price to be filed in
confidence with the Commission.
3. Floor prices for new terminal equipment must be shown to
the Commission to be not less than the associated costs.
4. Prices for the sale of new terminal equipment shall be quoted
separately from prices for the sale of inside wire.
5. Carriers shall be required to submit a report to the Commis
sion, on a semi-annual basis, showing, for each model type, the
number of units sold, the associated revenues and costs, and an
assessment of the continuing validity of the floor prices.
The effect of this order is that carriers may not sell
any type of new terminal equipment below its cost
so as to ensure that the tolls of the carriers for
their monopoly services do not cross-subsidize any
of the costs of the new terminal equipment that
these companies sell in _ the newly competitive
market. The appellant, along with the respondents
Bell Canada and British Columbia Telephone
Company, are classed as carriers and are united in
opposing this part of the order on the ground that
the respondent CRTC lacked jurisdiction to regu
late the sale prices of telecommunications terminal
equipment.
The CRTC's basic power in this area is to
regulate tolls under subsection 320(2) of the Rail
way Act [R.S.C. 1970, c. R-2 (as am. by R.S.C.
1970 (1st Supp.), c. 35, s. 2)]: "all telegraph and
telephone tolls to be charged by a company ... are
subject to the approval of the Commission, and
may be revised by the Commission from time to
time". The appellant and its allies argue that the
sale price of a terminal is not a toll for the use or
lease of a telecommunications instrument or
apparatus because it involves the absolute transfer
of property from seller to buyer.
The appellant and its allies further submit that
the sale price of terminals is not a "service inciden
tal to" a telecommunications business and so is not
caught by the definitions of telegraph tolls or
telephone tolls in the definitions section (section 2
[as am. by R.S.C. 1970 (1st Supp.), c. 35, s. 1]) of
the Railway Act because "service" connotes an
ongoing relationship between the parties rather
than a one-time transaction.
But in fact the respondents rely, not on the
definitions of tolls in section 2, but on the provi
sions of subsection 321(2) [as am. by R.S.0 1970
(1st Supp.), c. 35, s. 3] relating to "facilities":
321....
(2) A company shall not, in respect of tolls or any services or
facilities provided by the company as a telegraph or telephone
company,
(a) make any unjust discrimination against any person or
company;
(b) make or give any undue or unreasonable preference or
advantage to or in favour of any particular person or com
pany or any particular description of traffic, in any respect
whatever; or
(c) subject any particular person or company or any particu
lar description of traffic to any undue or unreasonable preju
dice or disadvantage, in any respect whatever;
and where it is shown that the company makes any discrimina
tion or gives any preference or advantage, the burden of
proving that the discrimination is not unjust or that the prefer
ence is not undue or unreasonable lies upon the company.
The powers of the CRTC to act in respect of
subsection 321(2) are strengthened by subsections
45(2) [as am by S.C. 1977-78, c. 22, s. 18] and
46(1) of the National Transportation Act:
45....
(2) The Commission may order and require any company or
person to do forthwith, or within or at any specified time, and
in any manner prescribed by the Commission, so far as is not
inconsistent with the Railway Act, any act, matter or thing that
such company or person is or may be required to do under the
Railway Act, or the Special Act, and may forbid the doing or
continuing of any act, matter or thing that is contrary to the
Railway Act, or the Special Act; and for the purposes of this
Part and the Railway Act has full jurisdiction to hear and
determine all matters whether of law or of fact.
46. (1) The Commission may make orders or regulations
(a) with respect to any matter, act or thing that by the
Railway Act or the Special Act is sanctioned, required to be
done or prohibited;
(b) generally for carrying the Railway Act into effect; ...
The appellant and its allies argue that telecom
munications terminals are not "facilities" under
subsection 321(2) essentially because that word
connotes a network in the nature of fixed assets
rather than a separate unit that can be sold.
This point was not resolved by R. v. McLaugh-
lin, [1980] 2 S.C.R. 331 where the Supreme Court
of Canada held that a computer was a "facility",
but not a "telecommunications facility" within the
meaning of the Criminal Code [R.S.C. 1970, c.
C-34] because it was not employed in the trans
mission of signals. This decision does not weaken
the appellant's contention as to the meaning of
"facilities" in this statute because the computer in
question there was a whole system, consisting of a
central processing unit, the memory, the printers
and about 300 connected terminals.
The appellant says its interpretation is strength
ened by the immediately following word, "provid-
ed", which must be taken to exclude a sale. How
ever, "provided" is clearly wide enough to include
a purchase and sale as was said by the English
Court of Appeal in Ward v. Mayor of Borough of
Portsmouth, [1898] 2 Ch. 191, at page 200.
Whether it does is determined by the context, in
this case by its linkage with "facilities".
The interpretation of that word is indeed not
free from difficulty because the statutory context
provides little assistance. The word in the relevant
sense does not appear at all in the Oxford English
Dictionary (1933), but it is recognized in the
Supplement to the Oxford English Dictionary
(1972) as follows:
Also, the physical means for doing something; freq. with quali
fying word, e.g. educational, postal, retail facilities. Also in
sing. of a specified amenity, service, etc., orig. U.S.
Given that the developing usage of the word
apparently comes from relatively contemporary
American English, it becomes advisable to utilize
American sources. Funk and Wagnell's Standard
Dictionary of the English Language
(Encyclopaedia Britannica Inc. ed., 1958) defines
it as:
... pl. Any aid, or convenience: facilities for travel.
The Random House Dictionary of the English
Language (1966) has:
... something designed, built, installed, etc., to serve a specific
function affording a convenience or service: transportation
facilities.
Finally, the College Edition, New Webster's Dic
tionary (1975), says:
... often pl. something built and activated to serve a particular
purpose: as, the school's luncheon facilities.
It seems clear from these sources that "facilities"
has a very broad meaning, and that, even if it
could be said to be used more often of a system, it
can also mean a single plug-in appliance: some
thing designed to serve a specific function afford
ing a convenience or service.
The meaning of the corresponding word, instal
lations, in the French text, seems equally broad.
Here are some definitions:
Grand Larousse de la langue française
(1975)
Ensemble des objets, des appareils mis en place, des locaux
aménagés en vue d'un certain usage: Une installation frigori-
fique, thermique. Une installation sanitaire défectueuse.
Dictionnaire Quillet de la langue française
(1975)
Mise en place, montage d'un ensemble d'appareils, de matéri-
els. Un tel ensemble mis en place. Installation électrique.
Le Robert méthodique
(1983)
... ensemble des objets, dispositifs, bâtiments . .. installés en
vue d'un usage déterminé. V. Equipement. Les installations
sanitaires.
Although each definition uses the word ensemble,
which usually connotes a plurality or collectivity,
most of the examples refer to separate appliances:
an installation frigorifique is nothing more than a
refrigerator, an installation thermique a stove,
installations sanitaires a toilet. It is therefore
clear from the words used in both languages that
the statutory language cannot reasonably be lim
ited according to the appellant's contention, and
that telephone and telegraph terminals do qualify
as "facilities". I am strengthened in my interpreta
tion by the subsections set out above from the
National Transportation Act, which indicate a
legislative intention to confer a great breadth of
power on the CRTC.
The appellant also contends that, even if it could
be said to provide facilities, it would not be provid
ing them "as a telegraph or telephone company,"
and relies on Greater Winnipeg Cablevision Ltd. v.
Public Utilities Bd., [1979] 2 W.W.R. 82 (Man.
C.A.), at page 87, where Matas J.A. said:
It does not necessarily follow that everything done by MTS is
subject to the regulatory supervision of the board. It is possible
for an undertaking to be a public utility as defined in the Act
for some purposes and not for others.
This argument is not without textual plausibility in
its immediate context, but it nevertheless runs
afoul of the broad powers bestowed on the CRTC
by section 320. "Company" is defined in subsec
tion 320(1) to include "telegraph and telephone
companies" and subsection 320(12) [as am. by
R.S.C. 1970 (2nd Supp.), c. 10, s. 65; S.C. 1974-
75-76, c. 41, s. 1] extends the jurisdiction of the
CRTC under subsection 321(2), inter alia, to "all
... business of such companies within the legisla
tive authority of the Parliament of Canada":
320... .
(12) Without limitation of the generality of this subsection
by anything contained in the preceding subsections or in section
321, the jurisdiction and powers of the Commission, and, in so
far as reasonably applicable and not inconsistent with this
section, section 321 or the Special Act, the provisions of this
Act respecting such jurisdiction and powers, and respecting
proceedings before the Commission and appeals to the Federal
Court of Appeal or Governor in Council from the Commission,
and respecting offences and penalties, and the other provisions
of this Act except sections 11 to 210, 212 to 222, 227 to 264,
266, 267, 269, 271, 272, 275 to 283, 294 to 300, 304 to 311,
331.1 to 331.4, 337 and 338, 341, 345 to 375, 383 to 387, 393,
400 to 408, extend and apply to all companies as in this section
defined, and to all telegraph and telephone systems, lines and
business of such companies within the legislative authority of
the Parliament of Canada; and in and for the purposes of such
application
"company" or "railway company" means a company as defined
in subsection (1); [Emphasis added.]
This subsection applies to and sets the context of
section 321. Subsection 321(2) must therefore be
interpreted to apply to facilities provided in any
part of the business of telegraph or telephone
companies and in every respect. (I should add
here, parenthetically, that no proceedings were
taken under Rule 1101 in this case and no consti
tutional issues were raised before this Court.)
The appellant and its allies advance a final
argument with respect to subsection 321(2). They
say that it cannot have a prospective application,
because in order to judge that a discrimination is
unjust, or a preference or advantage undue or
unreasonable, or a prejudice or disadvantage
undue or unreasonable, the CRTC has a manifest
obligation to look at the circumstances of each
case, and it cannot do so before the circumstances
have occurred. Here the appellant, for example,
has not yet even made a decision whether to
compete in the terminal equipment market.
It is conceded that, if the carriers actually
attempted to cross-subsidize sales of terminals in
the competitive terminals market from revenues in
their regulated activities, this would be an undue
or unreasonable preference or advantage over its
competitors, as well as an unjust discrimination
against its customers as a carrier, but it is argued
that this danger can be prevented without a gener
al prohibition by the CRTC against selling below
cost on any unit. In other words, it is said that the
CRTC does not have jurisdiction to impose the
specific regulatory scheme set out in Decision
82-14.
But subsections 45(2) and 46(1) of the National
Transportation Act set out above, as well as sub
section 57(1) of that Act and subsection 321(5) of
the Railway Act bestow a plenitude of powers on
the CRTC to prevent unjust discrimination or
undue or unreasonable preference or advantage by
any means it sees fit. Moreover, there is no limita
tion in subsection 321(2) with respect to prospec
tive action.
In fact, the CRTC has in Decision 82-14 made
only an interim decision:
The Commission is also mindful of the fact that the question of
appropriate service costing methods and related information
requirements for competitive services, including terminal ser
vices, is currently under consideration in Inquiry into Telecom
munications Carriers' Costing and Accounting Procedures:
Phase III—Costing of Existing Services (Phase III of the Cost
Inquiry). Depending on the costing methodology adopted, the
Commission's decision in Phase III of the Cost Inquiry may
alleviate some of the concerns raised by parties in this proceed
ing relating to potential cross-subsidization of terminal offer
ings of carriers with revenues from their monopoly operations.
Once Phase III of the Cost Inquiry is complete,
the filing of floor prices for specific model types
may no longer be seen to be the most efficient
means of ensuring that tolls from monopoly ser
vices are not used to cross-subsidize competitive
activities. However, pending the implementation of
new costing methods pursuant to the Phase III
Inquiry, where a company chooses to conduct both
competitive and monopoly business within the
same business structure, in my view it is a reason
able and proper exercise of the CRTC's power to
set a level of compensation to the company suffi
cient to cover all of its costs for the sale of its
competitive products. In this way it can ensure
that the tolls from monopoly services are not used
to cross-subsidize a carrier's competitive business
and that the objectives of the Railway Act are
achieved.
I would therefore dismiss the appeal.
HEALD J.: I concur.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.