The cities of Toronto, Vancouver and Halifax, among other Canadian municipalities, are tossing out a red herring to frustrated commuters in their appeal of a recent decision by the CRTC, according to one analyst.
On January 25, the CRTC ruled that the City of Vancouver is not allowed to charge access fees to fibre network builder 360networks’ former parent company, Calgary’s Ledcor Construction. The decision said Vancouver could only charge Ledcor on a cost-recovery basis for repairs of the roads, if the company had to rip them up to lay fibre.
Led by Toronto, various municipalities immediately banded together to appeal the CRTC’s decision.
“The ruling gives large, private fibre companies the right to dig up city streets in Vancouver, lay their cable and just patch the hole they dug through the pavement,” the City of Toronto said in a press release.
“The next day, another company can come back to the same spot and once again dig it up to access the underground to lay their company’s cable,” said Toronto Councillor Howard Moscoe, chair of the National Telecommunications Committee of the Federation of Canadian Municipalities.
Toronto further warned its citizens, “You’re in for slower traffic, lengthier delays and more closed streets.”
However, Mark Quigley, a telecommunications analyst with The Yankee Group in Canada in Brockville, Ont., said the CRTC is not able to dictate a city’s construction schedule.
“Presumably, there are other mechanisms in place for the city to dictate at least when this construction takes place,” said Quigley, citing the issuance of permits and off-duty police officers to direct traffic as some ways Toronto can control ‘who digs where and when.’
“I don’t think I can show up at City Hall and say, ‘Right boys, I’m going to be ripping up the road, starting tomorrow and finishing maybe next year,'” he said.
At least six companies have applications to dig up city streets and lay fibre in the City of Toronto right now, according to James Ridge, executive lead, telecommunications, City of Toronto.
In the recent past, the city has worked with the builders to coordinate schedules so that a few companies all lay fibre ducts in a common trench at the same time.
Ridge said the agreement has worked well, with most of the trenching done at night and then plated over during the daytime to accommodate the city’s traffic.
Both Quigley and the CRTC say they don’t see a reason why this practice can’t continue.
Quigley speculated that the Canadian municipalities are not concerned so much about traffic tie-ups, as they are the loss of a possible revenue stream.
“(The cities) have a valuable asset they never realized before, and that’s right-of-ways,” Quigley said.
The City of Toronto said it expects to lose $20 million a year in access fees it charges private companies to lay fibre on public property. Ridge said the situation might also be exacerbated by the “alarming precedent” the CRTC’s decision holds.
Toronto is in the middle of negotiating access fees for Toronto Hydro, which is now a separate corporation, though its primary shareholder is Toronto council. Ridge is concerned the city may lose this revenue stream, as well as any possible revenue stream the city could gather by charging Toronto Works (which controls the city’s sewers) if it is ever spun off as a private entity.
360networks, not surprisingly, is pleased with the CRTC’s decision.
“It is inappropriate for municipalities to charge us market-based access fees to occupy municipal right-of-ways,” said 360networks spokesperson Michelle Gagne from the company’s head office in Vancouver.
According to Denis Carmel, a spokesperson for the CRTC, the commission did not see a reason for Vancouver to charge extra access fees as “it is a service to the people in the community to have this (fibre) infrastructure.”
He did not know when the CRTC would hear Toronto and the other cities’ appeal. However, he did stress that the Vancouver-Ledcor decision “may or may not apply to other cases (in other municipalities).”
Michael Garret, Toronto’s Chief Administrative Officer, vehemently disagreed with this assertion.
“In the CRTC’s attempt to resolve a dispute between the City of Vancouver and Ledcor…the commission has made some sweeping policy declarations potentially affecting all municipalities,” the CAO said in a statement. “These new policies effectively set taxation and land use policies for municipalities across Canada so as to benefit the shareholders of the telecommunications industry, at the expense of municipal taxpayers, through foregone municipal compensation.”