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January 26, 2001
CRTC Decision Negatively Impacts Toronto Taxpayers
  
A major decision released today by the Canadian Radio-television Commission
(CRTC) will impact on every municipal taxpayer and everyone who's ever
complained about traffic disruption caused by road construction as
telecommunications carriers lay cable.

This decision has resulted in municipalities' inability to recover compensation
from telecommunications carriers. In the City of Toronto, it amounts to a
subsidy from taxpayers which is estimated be in excess of $20 million per
annum, based upon the amounts which would have been payable by these companies
under agreements entered into with the City in exchange for right to construct
and operate commercial telecommunications networks.

For more than a year, the Federation of Canadian Municipalities (FCM) and
Canadian municipalities, including the City of Toronto, have been carefully
monitoring an issue brought before the CRTC by the city of Vancouver regarding
telecommunications carriers' access to municipal rights-of-way. Vancouver
objected to Ledcor Industries Ltd. placing telecommunications lines under city
streets without compensating the city.

This decision has seriously compromised the City of Toronto's right to manage
and coordinate our own roads. The telecommunications carriers now have access
to city roads at will, at the expense of all users of the rights-of-way and the
Toronto taxpayers. While the CRTC has recognized a municipality's right to
recover the causal costs incurred from the use and occupation of municipal
property by "for profit" telecommunications carriers, it is unfortunate that
the CRTC has not seen fit to include the universally accepted principle that an
owner of land, in this case the municipality, is entitled to be compensated for
the use of public property by "for profit" companies.

This compensation would have aided municipalities in reconstructing roads and
sidewalks that will age prematurely due to ongoing cutting and digging activity
by the telecommunications carriers. These costs will now need to be absorbed by
the municipal taxpayer.

Given the importance of this decision to local taxpayers, the FCM , Toronto and
all Canadian municipalities will be appealing this decision.

Backgrounder

January 25, 2001

FCM's Action Plan On Telecommunications Access To Municipal Right-Of-Ways

In 1993 the newly passed federal Telecommunications Act significantly changed
the face of the telecommunications industry. Competition and deregulation has
resulted in an increase in demand for access to municipal rights of way. Some
municipalities, like Vancouver, anticipated the effect of this change and have
already adopted appropriate policies and are acting on those policies.

The City of Toronto has been an active participant in the work of the
Federation of Canadian Municipalities (FCM) Sub-committee on Telecommunications
since its inception in 1993. The work of this committee includes the
development of suggested telecommunications policies for member municipalities
to adopt as well as a Model Access Agreement for users of public rights-of-way.
The model agreement sets out the following five principals that address the
concerns of municipalities:

1. In pursuance of bona fide municipal purposes, municipal governments must
have the ability to manage the occupancy and uses of rights-of-way, including
the establishment of the number, type and location of telecommunications and
broadcasting facilities, while taking into account applicable technical
constraints.

2. Municipal governments must recover all costs associated with occupancy and
use of rights-of-way by telecommunications service providers and broadcasting
undertakings.

3. Municipal governments must not be responsible for the costs of relocating
telecommunications and broadcasting facilities if relocation is required for
bona fide municipal purposes.

4. Municipal governments must not be liable for losses associated with the
disruption of telecommunications or broadcasting services or with damage to the
property of telecommunications service providers or broadcasting
undertakings as a result of usual municipal activities or the activities of
other parties.

5. Recognizing that rights-of-way have value, municipal governments must
receive full compensation for the occupancy and use of municipal rights-of-way
by telecommunications service providers and broadcasting
undertakings.

However, some Canadian municipalities have found that in dealing with these
national and sometimes international telecommunications companies, there is
much pressure to back down from these positions and a regional and even
national municipal strategy became imperative. Moreover, the CRTC has, up to
now, choose not to address the issues of compensation for the use of municipal
rights of way.

With enough conflicts now between the industry and Canadian municipalities, it
was only a matter of time before these issues were resolved either in front of
the CRTC or in the Courts. The FCM drafted action plan dealt with these issues
with the following steps:

1. Awareness and solidarity amongst member municipalities;
2. Fund raising to support the action plan;
3. Research on legal position and valuation principals;
4. Negotiations with the CCTA and the Federal Government; and
5. Hearings of the CRTC

FCM member municipalities were asked to contribute on the basis of $0.03 per
capita to a municipal rights-of-way defense fund that was dedicated to the
issue of telecommunications and access to municipal rights-of-way. It was used
for research, legal and other costs regarding interventions before the CRTC.

Working together through the FCM was the most effective and economical means to
protect fundamental rights respecting control of rights-of-way and to recover
the substantial costs imposed on municipalities by telecommunications companies
using those rights- of-way.


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