TELCOS RIP UP STREETS, PROPERTY TAX PAYERS GET THE BILL
Ottawa must amend outdated Telecommunications Act, says municipal federation

:: Report: Federal Telecom Rules Cost Taxpayers and Damage Public Roads

:: Backgrounder: An outdated regime
:: Backgrounder: The CRTC and the Ledcor Decision 
:: Backgrounder: Constitutional Issues  
:: Backgrounder: Spectrum Auctions
 
Toronto, June 18, 2008—Property tax payers in Canadian cities are subsidizing the telecommunications industry by more than $107 million a year says a new report released today by the Federation of Canadian Municipalities (FCM).

The report, “Highway Robbery: How Federal Telecom Rules Cost Taxpayers and Damage Public Roads”, describes a federal regulatory regime that has deprived local governments of the power to recover road management and repair costs from telecom companies that tear up and occupy roadways to expand, upgrade and operate their networks.

“In Canada´s larger cities the current regime has cost property tax payers $646 million since 2001 in indirect subsidies to telecom companies,” said FCM President, Sherbrooke mayor Jean Perrault. “Even as cities struggle to hold the line on property tax increases in the face of a growing infrastructure deficit, federal rules invite telecommunications companies to tear up our streets, install their cable, and leave property tax payers with a running tab.”

The report finds that existing federal rules have undermined the ability of municipal governments to manage public roads in the public interest. According to the report, municipalities are losing the ability to set parameters or recover costs related to the expansion and operation of telecom systems that run through municipally-owned property.

“We've heard very clearly today about the national cost of this broken system, but it´s also taking a major toll right here in Toronto,” said Toronto councillor Howard Moscoe, chair of FCM´s telecommunications committee. “Locally, this busted system has racked up a $134 million telecom subsidy paid for by Toronto's property tax payers. For a family of four that's a $35 property tax hit each and every year.”

The report also says the CRTC has not hesitated to expand its mandate or rewrite local access agreements, despite the fact that it isn´t equipped to understand municipal issues. Its decisions are ad hoc and unclear and, as a result, uncertainty and animosity now often characterize municipal-telecom relations. This contributes to prolonged and costly negotiations, which often end up before the CRTC and the courts.

“Our issue is not with the telecommunications companies, it is with successive federal governments that have swept this problem under the rug,” said Mayor Perrault. “We are calling on the current government to break with the past and fix the problem. If it doesn´t, it will be telling Canadians that their property taxes should be subsidizing profitable telecommunications companies.”

FCM is asking the federal government to rewrite its telecommunications Act to allow greater management of municipal rights-of-way by local governments as well as greater cost recovery.

For more information: Maurice Gingues (613) 907-6395