Summary of Stakeholders Consultation Session on Arbitration Rules for Mandated Roaming/Antenna Tower Sharing Disputes Held May 23, 2008
List of Attendees
- Johanne Lemay - Lemay-Yates (representative of 693242 Canada)
- Benoit Desjardins - Bell Mobility
- Jonathon Blakely - Bell Mobility
- Jane Luck - Bell Mobility
- Francois Picard - Bragg Communications (Eastlink)
- Scott Davis - Bragg Communications
- Abraham Finkel - Celluworld Inc.
- Simon Neuhauser - Cellulworld Inc.
- Doug Tipple - Commsite Capital Ventures
- David Hahn - Commsite Capital Ventures
- J. David Farnes - Canadian Wireless Telecommunications Association
- Ryan Lausman - Data & Audio Visual Enterprises Inc.
- Stewart Thompson - Globalive Wireless LP
- Scott Tippin - Jaguar Wireless
- Chris Peirce - MTS Allstream
- Teresa Griffin-Muir - MTS Allstream
- Jenny Crowe - MTS Allstream
- Pentti Tegelberg - Mipps Inc.
- Lew Sears - LSA Inc. (representative of Mipps Inc.)
- Douglas Evashkow - Niagara Networks
- Murray Kline - Niagara Networks
- Ken Engelhart - Rogers Communications Inc.
- Kent Thomson - Rogers Communications Inc.
- Bob Berner - Rogers Communications Inc.
- Bob Hillman - Ruralcom
- Jean Brazeau - Shaw Communications Inc.
- Jeff Carr - Terago Networks
- Greg Porter - Telus
- Serge Bertuzzo - Telus
- David Haigh - Telus
- Frédéric Despars - Quebecor Média Inc.
- Bill Horton - ADR Chambers
- Kathleen Kelly - ADR Chambers
- Julie Wills - ADR Chambers
- Heather Hall - Industry Canada
- Glenn Sheskay - Industry Canada
- Peter Hill - Industry Canada
- Pim Vanderveen - Industry Canada
- Peter Noonan - Industry Canada
- Mike Connolly - Industry Canada
- Sherri Noseworthy - Industry Canada
This summary was prepared by ADR Chambers and is intended to reflect the general discussions which took place during the June 23, 2008 stakeholders session. Parties are expected to provide full comments in writing to ensure that their particular views are clearly conveyed. Participants may use the reply comment period to provide feedback on the session summary as well as comments submitted by other stakeholders.
Part 1 - Session Summary
Industry Canada Arbitration Rules - Law of the Arbitration
Rule 1.1 Interpretation - Clause l)
1.1 In these Rules, the following terms shall have the following meanings:
l) "Law of the Arbitration" means the law the Parties have agreed to apply to the arbitration proceedings or, in the absence of such agreement, the law of the Province of Ontario applicable to arbitrations. ***
All stakeholders present at the consultation agreed with the above for the most part. One company felt strongly that there needs to be a single default law – it streamlines and avoids a patchwork of different laws depending upon the place of roaming/tower – site sharing, which is likely to involve several provinces in any event. Default to Ontario arbitration law is acceptable with one caveat: they expressed grave concerns about no right of appeal – in their opinion it violates common law and there's no privative clause shielding the Minister under constituent legislature at a minimum; they say there must be a right of appeal on errors of law and jurisdiction.
Another company offered that if a right of appeal is incorporated that there be no stay of the Tribunal's Order.
Industry Canada Arbitration Rules - Final Offer Arbitration, Term Sheets
Rule 1.1 Interpretation - Clauses j) & v) and Cross Reference Rule 9.9
1.1 In these Rules, the following terms shall have the following meanings:
j) "Final Offer Arbitration" means that the Arbitral Tribunal shall select the Final Term Sheet of one of the parties to the arbitration as defining the terms of the agreement to be entered into between the parties and shall not compromise, amend or vary the terms of any final Term Sheet of either of the parties in making its decision. Final Offer Arbitration shall not preclude the Arbitral Tribunal from deciding any issue which is ancillary or incidental to the dispute and which does not form a term of the agreement to be entered into.
v) "Term Sheet" refers to a document outlining the specific and detailed terms and conditions upon which a Party would be willing to enter into a Roaming Agreement or Site Sharing Agreement.
Cross reference Rule 9.9
9.9 Upon the presentation of final written submissions or at the close of an oral hearing the Parties shall submit a final Term Sheet ("Final Term Sheet") for consideration by the Arbitral Tribunal. In all cases the Arbitral Tribunal will determine its award by the method of Final Offer Arbitration and shall consider these Final Term Sheets to be the final offers under consideration for those purposes. ***
Parties and arbitrator to agree on what content/points of agreement are to be decided by the arbitrator (normal issues definition practice), including contents of term sheets.
- Resulting agreements (decisions) must be sensible, reasonable and fair.
- If Final Offer Arbitration (FOA) is not used, are the timelines affected?
- There needs to be clarity over what the term sheets include.
- It is questionable that terms sheets can address all elements of a full-blown agreement.
- Consider permitting tribunal the option of rejecting FOA and both term sheets and to decide item by item what is commercially reasonable.
- Consider permitting Tribunal to decide whether to use FOA only on certain issues or groups of issues.
The general consensus of the larger licensees is that Final Offer Arbitration ("FOA") is suitable for simple or single issue matters, such as a single tower sharing, but is not favoured for roaming or multi-tower disputes. For more complex agreements the Arbitrator (Tribunal) should be able to use as much discretion as reasonable to determine specific components, applicable elements of agreement.
- The tribunal needs to have the flexibility to vary from either term sheet to satisfy the Conditions of Licence (COL) and should be able to choose either of the final term sheets OR a different position so that in every case they choose the most commercially reasonable terms.
- The COL re roaming and tower/site sharing require "commercial rates comparable to those that apply for similar terms".
- FOA is an unworkable, unfair model to settle terms of a complex commercial agreement; combined with term sheets will not work for most cases, and unfairly "handcuffs" or limits the tribunal in its exercise of powers.
- Concern expressed over the basis or criteria for the tribunal's choice of rates vs. terms. Does the tribunal pick the offer that contains reasonable rates or the offer that contains reasonable terms?
- Rule 9.9 needs clarification. Consider permitting the tribunal to unpack the term sheets and make a series of decisions including permitting the tribunal to pick from each sides list.
Generally, the others strongly favour FOA as the preferred model. FOA represents a strong, if not the strongest, incentive to have both parties present reasonable offers and prevents "gaming". It is a mechanism to avoid protracted process and addresses concerns that permitting too much flexibility may create conditions to keep the arbitration process lengthy.
- should contain detailed terms and conditions
- should be selected, or not selected, in whole and should not permit picking specific terms or conditions from each side's list
- restrict the exchange and filing to only one term sheet per side to encourage the filing of serious offers and avoid gaming
- satisfactory access to existing commercial agreements wanted (may be needed) to evaluate content of term sheets
- are commonly used today
The complexity and focus on transactional implementation, about which the tribunal will know less than two parties, will discipline the parties to be reasonable.
Industry Canada Arbitration Rules - Guidance For Tribunal / Economic Evidence
Rule 2.3 Scope of the Rules
Guidance For Tribunal Or Economic Evidence
2.3 When resolving disputes under these Rules, the Arbitral Tribunal can be guided by the principles that Roaming Arrangements should be offered at commercial rates that are reasonably comparable to rates currently charged to others for similar roaming services and that Site-Sharing Agreements, including access to ancillary equipment and services, will be offered at commercial rates that are reasonably comparable to rates currently charged to others for similar access. In deciding upon an award the Arbitral Tribunal may have regard to market forces and relevant economic data in Canada and may consider market information and relevant economic data in other countries in cases where a domestic market for services and equipment does not exist in Canada. ***
Words "can be, may have" should read" "shall have" in both instances. Rule should reflect that the tribunal "shall be" guided by COL and clarification questions.
If the second sentence is retained, replace "may have regard to market forces" with "shall have regard to Conditions of License (COL) and applicable laws (e.g. Radiocommunications Act, municipal laws and regulations, Arbitration Act – Ontario, environmental laws, Safety Code 6 [Health Canada])." If wording is kept, clarify what the terms market forces/market information mean.
The general consensus of the larger licensees is a preference for deleting the second sentence altogether or at a minimum to delete the phrase "in cases where a domestic market for services and equipment does not exist in Canada", in the last sentence, as this is implied. It is understood that commercial rates for comparable services would apply.
Keep to the language of the COL; otherwise there is a risk of (illegally and improperly) creating new substantive rights not originally contemplated in the COL.
Consider whether it should be obligatory to refer tribunal to applicable laws, including municipal or provincial planning laws, if access to or expansion of a tower site or roaming facilities might require further planning approvals.
There are definitional problems with the term "market forces"; it is a "loaded" term and, in roaming, what are "market forces"?
Others offered the following comments:
Emphasize the tribunal take into consideration the policy objectives of Industry Canada (to facilitate roaming and sharing) including:
- Facilitate entry into industry
- Arrive at a commercial process to make possible
- Transparency of how rates are disclosed
- Market info – wholesale arrangements – not retail, therefore a step removed from process.
Expressed concern with where the comparable commercial rates information come from and questions whether there needs to be an agreement that the information is valid.
Why is there a reference to "market forces" in Canada but a consideration for "market information" from other countries?
There is an imbalance in market power and information – tribunal needs evidence – shouldn't new entrants also have access to evidence?
Industry Canada Arbitration Rules - Short-Form Procedures
Rule 19 Short-Form Procedures and Section 2.4
19.1 Where the Short-Form Procedures apply, in accordance with section 2.4 above, then, subject to agreement of the Parties or ruling of the arbitral tribunal, the above Rules shall apply subject to the following provisions:
- There shall only be one (1) arbitrator;
- The time period in Rule 5.2 shall be shortened to three (3) Business Days *** from seven (7) calendar days.
- If an oral hearing is required it shall be limited to one (1) *** day. The arbitrator will set time restrictions on the presentation of oral evidence and submissions for each party at the procedural hearing;
- The time periods with respect to Procedural hearings provided for in Rules 9.2 and 9.3 shall be three (3) Business Days and ten (10) calendar days respectively.***
- The time period within which to file written evidence and submissions in accordance with Rule 9.6 is shortened to fifteen (15) calendar days (***) or to schedule an oral hearing under Rule 9.7 is shortened to twenty-five (25) calendar days (***).
- The arbitrator shall render an award in accordance with Rule 11.1 within five (5) calendar days **** of the close of the oral hearing or presentation of final written submissions and evidence.
2.4 In cases where:
- the parties are in agreement that the Short-Form Procedures should apply;
- where the subject matter in dispute relates to **** ; or
- where the Arbitral Tribunal decides that the arbitration is not likely to be complex;
the Short-Form Procedures outlined in Rule 19 shall apply.
A specific provision to be able to respond to written submissions should be included.
Generally, 2.4 applies to single-site tower sharing, or a single issue and expert evidence is not required.
2.4 c) add the words: where the "Appointing Committee" of the Arbitral Tribunal decides…;
Procedural fairness is critical.
Some expressed a preference for short-form process and timelines to prevent delay and protracted process.
Two existing smaller licensees suggest short-form could be suitable for up to eight towers.
Others expressed a preference for short-form presumptive for single tower access. Short-form process timelines are valuable for simple disputes.
Can agree to a short-form process and to time limits in draft rules, but only for towers.
While there is no consensus on number of towers, the long-form should definitely be used where more than eight towers are involved.
Presumption that roaming is complex but applicant could rebut.
Some stakeholders expressed general discomfort with only one arbitrator; they preferred three, while others preferred one, whenever it was possible.
Rule 2.4 appears to be a gateway. In response to the Notice to Arbitrate, would a Respondent be able to make submission on 1 or 3 arbitrators?
Concern about time in Rule 11.1, may need to extend time.
Industry Canada Arbitration Rules: Timelines Chart
Possible Estimated Draft Timelines:
|Event||Short form (Rule 19)||Long-form|
|Notice served by Party||-||-|
|Appointment of Tribunal where no agreement
3 days under 5.1 to obtain list from ADRC
7 days to consider list (or 4 short-form) (5.2)
2 days to delete names
1 day to pick arbitrator
2 days to complete picking panel
|10 days||15 days|
|First procedural hearing to be held
(Note parties to file material within 3 days in short or 5 days in long-form) (9.2 & 9.3)
|10 days||15 days|
|Oral hearing set after procedural hearing||25 days||45 days|
|Written hearing evidence to be filed (9.6 & 9.7)||15 days||30 days|
|Hearing (9.6)||1 day||3 days|
|Decision to be rendered (11.1)||5 days||15 days|
|Written hearing||41 days||78 days|
|Oral hearing||51 days||93 days|
Note that some of the time periods are calculated in the Rules using Business Days, which may lengthen the amount of calendar days; however, in a given arbitration, the parties may be prepared to proceed with the next step prior to the expiry of a deadline to do so, which would shorten the amount of calendar days.
There is a duty to treat parties equally and fairly and a duty to give each party a reasonable opportunity to present its case. Treat the timelines as guidelines. Procedural fairness is important as is streamlining the negotiation process.
Add a provision for the respondent to be able to respond or reply to the Notice to Arbitrate to assist in the framing of issues, within 10 days.
With FOA, long-form timelines are fair. Long-form timelines could be used in all cases. FOA is the better process.
Timelines can work if Industry Canada were to prepare a model agreement to use as a base to move matters forward.
Shorten timelines. After ninety days of negotiating, the parties should know where they are going and the timelines can likely be reduced by one-third.
The timelines should be maximums and the process should keep moving from stage to stage even if ahead of the charted timelines.
Timelines are guidelines and should be treated as such. Parties should be given a reasonable opportunity to present their case and neither the parties nor the tribunal should be constrained by set timelines. Timelines should be an issue for discussion at the pre-arbitration conference.
The COL have been established; focus in the timelines is procedural fairness.
Use long-form for multiple towers/site and long to short for roaming.
Specific comments on timelines for specific procedural steps:
- Appointment of Tribunal – it can take a big organization time, particularly if multiple arbitrations in process – increase 3 to 5 days, 7 days ok, increase 2 days to 5 days.
- Oral Hearing Set – provide at least 60 days for long-form procedures.
- Written Hearing evidence – 30 days – but count from date and issuance of procedural decision; otherwise consider 45 days, especially for roaming. Permit arbitrator to defer issuance of procedural ruling in order to consider the issues raised. Consider adding a reply period of 45 days.
- Hearing: 1 day short-form/3 days long-form, may not be enough – 5 days better, especially for roaming. Tribunal/Arbitrator may need flexibility to determine issue by issue.
- Decision to be rendered – 5 days short-form/15 days long-form – prefer that there be a flexible approach to allow less than 30 days for short form.
- Building networks is not done really fast. If it is true that it tends to take a year to build a network for new roaming, you have future time to negotiate or come to an agreement. Timelines are not an impediment because the parties have to wait for network to be built and there is no need to compress the arbitration into two months.
Part 2 - Questions and Comments Submitted by Stakeholders at the Session
NOTE: These comments do not constitute legal advice.
Q.1. What happens if one party delays payment to delay the process?
A: Either side has the right to pay fees, deposits etc. on behalf of the other party to avoid delaying the process. In its award at the end of the arbitration hearing, the Tribunal has the discretion to award costs including a direction, as appropriate, for repayment of fees, deposits etc. made by one party on behalf of the other party.
Q.2. How does final offer arbitration work when you may have multiple carriers involved in the arbitration?
A: Multi-party situations would likely require special directions from the Tribunal if the parties cannot agree. The directions would vary with the circumstances.
Q.3. Is there always going to be an initial term sheet and a final term sheet?
A: If the final Industry Canada Arbitration Rules contain a provision for an initial term sheet and a final term sheet, this can be varied by the Tribunal or by agreement of the parties and the agreement of the Tribunal.
Q.4. Re Rule 3.4: Clarify that no individual will be placed on the Appointing Committee if that individual may have or has had any interest in any issue relating to an arbitration.
A: Although different language is used in expressing this thought with reference to members of the Appointing Committee and with reference to arbitrators, the intent is exactly the same. Neither arbitrators nor members of the Appointing Committee may act with reference to an arbitration in which that individual has any interest. Possibly, this language should be reviewed to ensure that there is clarity in both cases.
Q.5. Re Rule 5.2: Clarification required as to when there will be one v. three arbitrators.
A: This requires further clarification in the Rules. As presently written, the Rules provide that there will be three arbitrators unless the parties agree otherwise or the Short-Form Rules apply or the Arbitral Tribunal decides that the matter is not complex and the Short-Form Rules should apply. See Rule 2.4. However, the application of the Short-Form Rules needs to be further detailed in the draft Rules.
Q.6. Re Rule 6.3: Should parties be required to disclose material witnesses at outset.
A: The purpose of this Rule is not to promote early disclosure but to avoid later delays and additional costs if it turns out that one or more of the members of the Arbitral Tribunal has a real or perceived conflict with a material witness.
Q.7. Re Rule 9.1(d): Should the Rules provide that an oral hearing is presumptive unless parties agree otherwise.
A: This is what the Ontario Arbitration Act provides. However, these Rules give the Tribunal the power to dispense with an oral hearing if it determines that oral evidence is not required. This may require further thought since the Industry Canada Rules do not take effect by agreement of the parties but are subject to the Ontario Arbitration Act.
Q.8. Re Rule 9.6: Written submissions should be exchanged after the exchange of evidence. There should also be an opportunity for reply evidence. 30 days is short.
A: Most arbitrators would require written submissions only after all the evidence has been submitted. The Tribunal would set the sequence of evidence and of submissions. Time limits can be changed by agreement of the parties or direction of the Tribunal.
Q.9. Re Rule 9.8(c): Transcripts should be available if one or both of the parties are willing to bear the costs.
A: Transcripts will be available if both parties agree. Most arbitrators would allow transcripts as long as the party that wants them is willing to bear the costs. The Rules make an assumption there will be no transcripts because transcripts have limited utility in most cases if there is no right of appeal. In addition, the basic premise of the Rules is that they are to create a process that mirrors a commercial negotiation, not the litigation of a legal claim.
Q.10. Re Rule 9.11: Arbitrators should not be able to retain their own expert.
A: Most modern Rules of Court and arbitration rules give a judge or tribunal the authority to appoint an independent expert. It is a rarely used power that might prove useful in an appropriate case.
Q.11. Re Rule 11.5: There should be a right of appeal on an issue of law as per the default under the Arbitration Act.
A: The basic premise of the Rules is that they are to create a process that mirrors a commercial negotiation, not the litigation of a legal claim. Bear in mind that arbitration awards are always reviewable by the Court if a Tribunal exceeds its jurisdiction or engages in any kind of misconduct. Creating any right of appeal beyond that type of review can lead to disputes about what is or is not appealable. Some court decisions have created uncertainty around such issues.
Q.12. Do we need a provision for consolidation of arbitrations?
A: This should be considered if it is possible that some participants may want to combine two or more arbitrations. At the moment, the Rules make no provision for this. Under the Arbitration Act of Ontario, the Court has the power to consolidate arbitrations. In addition, this can always be done with the consent of all parties to the arbitrations being consolidated.
Q.13. Re Rule 4: As drafted, the applicant seeking to initiate arbitration is advantaged because its notice of arbitration is the only document that frames the facts and issues. Should a respondent not have the right to file a response to the Notice of Arbitration?
A: This seems like a useful suggestion.
Q.14. Re Rule 6.1: Should the words "Unless otherwise agreed by the parties" be deleted. There should not be any possibility of the parties agreeing the arbitrator does not have to be independent.
A: It is very common in arbitration for the parties to agree to waive a technical source of a conflict so a particular arbitrator, in whom both sides have confidence, may be appointed to decide the case. Waiver should only occur when the source of the conflict is fully disclosed, all parties have agreed to waive the conflict, the arbitrator agrees to the waiver and the waiver and consent of the arbitrator is confirmed in writing.
Q.15. Is there a right to request additions or deletions to the ADR roster? How is the roster compiled? How is independence and impartiality assured, while also ensuring the prospective arbitrators have the required skills and background?
A: Industry Canada has selected ADR Chambers to provide the initial roster of qualified arbitrators. ADR Chambers has made commitments with respect to the services to be provided. The ADR Chambers roster is comprised of retired judges and senior lawyers and all are experienced arbitrators. The members of this roster will receive initial basic training in terminology and technology with respect to the wireless industry to ensure a baseline and consistent level of industry knowledge. The composition of the roster and the structure and management of the administration of arbitrations will allow ADR Chambers to provide a high level of assurance as to the quality, independence and skill sets of the arbitrators who will be available to provide neutral services.
Q.16. What information will be made available to the parties concerning the arbitrator candidates?
A: Arbitrator (professional) biographies will be available on the ADR Chambers website. Although the final roster has not been confirmed, biographies for most of the arbitrators who are likely to be on the roster are currently available on the ADR Chambers website.
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