Broadband construction in rural Canada delayed further by court and urban groups
From http://www.theglobeandmail.com/servlet/story/LAC.20060926.RTELCO26/TPStory/Business
POSTED ON 26/09/06
Groups can appeal CRTC phone overpayment decision - SIMON TUCK
OTTAWA -- Consumers scored a legal win yesterday when the Federal Court of Appeal granted permission to appeal a CRTC decision to not return $652.7-million in overpayments to telephone customers.
The federal telecommunications regulator ruled in February that the telephone companies would be allowed to use the money for specific projects, such as new high-speed Internet services in rural and remote communities, that are deemed to be in the public's interest.
But just a few weeks after the ruling, consumer groups such as the National Anti-Poverty Organization and the Consumers Association of Canada sought leave to appeal the CRTC decision. With their win today, the consumer groups will now file the appeal documents with the Federal Court of Appeal. A hearing and decision are expected next year.
"We are pleased to have a chance to convince the court the money should be returned to consumers," said Michael Janigan, general counsel for the Public Interest Advocacy Centre, which represented the consumer groups in the proceeding.
The overpayments, which amount to about $50 per telephone customer, are the result of a 2002 effort by the Canadian Radio-television and Telecommunications Commission to encourage competition in the local phone services market by making rates high enough to attract new entrants. In effect, a cushion was built into the rates and the companies were told to put some of the money into so-called deferral accounts.
Despite that effort, however, the incumbents continue to dominate local service.
The expansion of high-speed Internet services has been a federal government priority for at least five years, although Ottawa has yet to allocate enough money to provide access in most rural and remote communities. As of last year, Canada had fallen to sixth among the 30 countries in the Organization for Economic Co-operation and Development in the provision of broadband access, down from second place just a few years earlier.
Most urban residents have a choice of broadband providers, with most high-speed customers choosing a telephone or cable company. Most remote communities, however, do not yet have access to the service, which many analysts and government officials argue is quickly becoming essential.
Some consumer groups say that does not change their view that overcharged customers should get a refund. They argued that none of the money belongs to the phone companies -- or the regulator -- and that most subscribers will not benefit from the expansion of services they already get.