Canada: MTS Allstream Inc. v. TELUS Communications Company: Further Confirmation of the Exclusive Jurisdiction of the CRTC

The recent Alberta Court of Appeal decision in MTS Allstream Inc. v. TELUS Communications Company affirmed the exclusive jurisdiction of the Canadian Radio-television and Telecommunications Commission (CRTC) to regulate telecommunications services in Canada, including setting the rates and tariffs for such services. Efforts to litigate disputes over such matters in Canadian courts have routinely been referred back to the CRTC in recognition of the CRTC's broad policy mandate and specialized expertise.

In MTS v. TELUS, MTS Allstream applied to Alberta's superior court, the Court of Queen's Bench, for a declaration that the Alberta Limitations Act does not apply to refunds that the respondent, TELUS, was required to pay to MTS pursuant to CRTC Decision 2007-10. That decision had resolved a dispute about the rates for one particular element (BSEF) of a service (CDN) provided by telecommunications carriers known as incumbent local exchange carriers (ILECs) to their competitors.

McCarthy Tétrault, as counsel for TELUS, sought an order staying or dismissing MTS's application on the basis that the subject-matter of the application fell within the exclusive jurisdiction of the CRTC. Alternatively, TELUS argued, if there was concurrent jurisdiction, the Alberta Courts should defer to the specialized expertise of the CRTC. The Chambers judge characterized the dispute as one involving the interpretation and application of the Alberta Limitations Act to a claim for payment of a debt, over which the Alberta courts and the CRTC had concurrent jurisdiction. The Chambers judge declined to defer to the CRTC. TELUS appealed this decision to the Court of Appeal.

In determining whether an administrative tribunal has exclusive jurisdiction over a dispute, the courts are required first to review the tribunal's governing legislation to determine the matters over which the legislation intended the tribunal to have jurisdiction. Next, the courts must determine the essential nature of the parties' dispute and decide whether it falls within the tribunal's exclusive jurisdiction.

Although the MTS application was framed as a request for interpretation of the Alberta Limitations Act, TELUS argued that MTS's application, in substance, asked the Alberta court to interpret Decision 2007-10. In this decision, the CRTC had found that the ILECs were incorrectly billing competitors for the BSEF service, and directed the ILECs to refund competitors for those charges "back to the date of the error, subject to the applicable limitations periods provided by law." This decision formed part of a series of decisions by the CRTC that expanded the range of services to be provided by ILECs to competitors and set the rates, terms and conditions for those services.

MTS argued that the words "subject to the applicable limitations periods provided by law" were a reference to the Alberta Limitations Act. TELUS argued that it was not at all clear what limitations period the CRTC was referring to. Agreeing with TELUS, the Court of Appeal held that resolution of the dispute involved the interpretation and implementation of both the CRTC-approved Terms of Service and Decision 2007-10. To the extent that such a task involved the consideration of telecommunications policy, it would fall within the exclusive jurisdiction of the CRTC. Further, even if it had determined that there was concurrent jurisdiction in this case, the Court of Appeal would still have deferred to the CRTC in light of the comprehensive dispute resolution scheme provided by the Telecommunications Act and the fact that resolution of the dispute would require the court to rule on the CRTC's intentions.

MTS Allstream's application to the Supreme Court of Canada for leave to appeal the Court of Appeal's decision was dismissed with costs. The CRTC subsequently clarified the meaning of "subject to the applicable limitations period provided by law" in CRTC Decision 2010-462.

McCarthy Tétrault Notes

This decision is notable as there are few reported cases dealing with exclusive jurisdiction of the CRTC. Further, MTS v. TELUS was the first case in which the general principles of exclusive jurisdiction set out in existing case law from the Federal courts and Supreme Court of Canada were applied to the interpretation of a CRTC decision.

This decision also provides further guidance regarding what courts will characterize as private law matters (over which courts have concurrent jurisdiction), and matters that fall within the exclusive jurisdiction of the CRTC. Although the facts in this instance were unique, the Court of Appeal's reasoning highlights the broad jurisdiction of the CRTC and the consequent difficulties faced by a party seeking adjudication of telecommunications disputes in provincial courts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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