Telcos rip up streets, property tax payers get the bill

    Ottawa must amend outdated Telecommunications Act, says municipal

    TORONTO, June 18 /CNW Telbec/ - 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
    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 further information:

For further information: Maurice Gingues, (613) 907-6395

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Federation of Canadian Municipalities

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