ARCHIVED - Order CRTC 2001-695

Order CRTC 2001-695

Ottawa, 10 September 2001

CRTC reduces co-location space restrictions - Show cause to ILECs other than Bell Canada

Reference: 8670-A4-01/01

The Commission directs TELUS Communications Inc. (for Alberta and British Columbia), MTS Communications Inc., Aliant Telecom Inc. and Saskatchewan Telecommunications to issue revised tariff pages allowing an existing Type 1 co-locator that has exhausted its initial 20 square metre maximum in a central office (CO) to acquire additional Type 1 co-location space in the CO, where space is available, in increments of one square metre.

On 11 May 2001, the Commission issued Order CRTC 2001-378, CRTC reduces co-location space restrictions - AT&T Canada complaint. The order was issued in response to a request from AT&T Canada to allow additional Type 1 co-location to be acquired in a central office (CO) above the maximum of 20 square metres. The Commission approved the request and limited additional Type 1 space to increments of one square metre to guard against the strategic acquisition of space in any one CO by any one carrier. The Commission directed Bell Canada to issue tariffs reflecting its determination in Order 2001-378 and the other incumbent local exchange carriers (ILECs) to show cause within 30 days as to why the same regime applicable to Bell Canada should not apply in their respective territories.

On 11 June 2001, TELUS Communications Inc. (TCI) submitted that it was not opposed conceptually to allowing interconnecting carriers (ICs) to acquire additional Type 1 co-location space, where space is available, when the existing Type 1 space is approaching exhaust. However, TCI noted its concern with the ability of an IC to seek an unlimited amount of additional Type 1 co-location space. In addition, TCI was concerned with the idea that entrants will be in a position to identify situations where an incumbent IC has acquired strategic co-location space beyond its needs.

TCI stated that with the release of Decision CRTC 2001-287, dated 25 May 2001, an IC is now in a position to sublicense its co-location space to one or more third parties. TCI felt that combining Decision 2001-287 in conjunction with Order 2001-378 might lead to a situation where an IC controls a significant amount of space within a particular CO which it could then make available, at its discretion, to other parties seeking co-location space in that CO. According to TCI, the potential existed for an IC to circumvent the "first-come, first-served" impartiality of the existing ILEC procedures.

TCI further suggested that an entrant would not be in any position to identify to the Commission and apply for relief from the Commission if strategic co-location space was acquired beyond an IC's needs. Type 1 co-location space is segregated with secure access and even an ILEC might find it difficult to assess whether a particular IC has acquired co-location space in excess of its requirements. TCI also submitted that an ILEC should not be required to assume a "policing" role in assessing co-location space excesses.

TCI stated that if directed by the Commission, it will undertake appropriate tariff amendments to its Alberta and British Columbia tariffs as specified in Order 2001-378. TCI expects that the allocation of available Type 1 co-location space would be carried out on a "first-come, first-served" basis, having regard to other pending co-location requests. However, it urged the Commission to reconsider the appropriateness of allowing an IC to expand its Type 1 co-location space to an unlimited extent. In addition, TCI claimed that abuses of the ability of an IC to acquire additional co-location space beyond its needs would not be brought to the Commission's attention by other entrants.

On 11 June 2001, Bell Canada responded on behalf of MTS Communications Inc., Aliant Telecom Inc. and Saskatchewan Telecommunications (the companies). With respect to the show cause, the companies stated that they were not opposed to allowing existing Type 1 co-locators additional Type 1 space and would file the appropriate tariff revisions. However, they were "both alarmed and surprised" that there appeared to be no limit to the amount of extra space any one co-locator can request.

The companies suggested that the apparent unlimited extent of the Commission directive in Order 2001-378 would only accelerate situations of space exhaust in their territories. Limiting the request for additional Type 1 co-location space to increments of one square meter would not prevent an IC from acquiring strategic co-location space.

Determination

When co-location was first envisioned as part of the implementation of local competition, the cap of 20 square metres of Type 1 co-location space in a CO was put in place to prevent any one carrier from acquiring excess co-location space as a strategic initiative. The Commission believes that practical business considerations will continue to preclude any abuse of Type 1 co-location acquisition.

On 17 July 2000, the Commission received a Part VII filing from the Coalition for Better Co-location (CBC) whose members are: AT&T Canada Inc., C1.com Inc., Call-Net Enterprises Inc., Covad Canada Communications Inc., Gateway Telephone Limited, GT Group Telecom Services Corp., NorthPoint Canada Communications Inc., AXXENT Corp., PSINet Limited, Riptide Networks Inc., UUNET Canada Inc. and Wispra Networks Inc. The Part VII filing stated that Type 1 physical co-location arrangements from the ILECs are extremely expensive. The CBC added:

"While some competitors might indicate a preference for Type 1 physical co-location arrangements, most do not have such a preference. In fact, most competitors would opt for more cost-effective forms of co-location if the ILECs made those arrangements available".

Following the Part VII process, the Commission issued Decision CRTC 2001-204 on 30 March 2001. The decision permits co-locators to request Type 2 co-location (cageless) at their discretion. The co-locators now have, as an option, the opportunity to choose a more cost-effective means of co-location in a CO with a corresponding reduction in costs from the Type 1 co-location arrangements. In the same decision, the Commission determined that unescorted access in the CO, for co-locator personnel that are subject to the same security restrictions and checks as ILEC personnel is reasonable. A further reduction in costs associated with Type 2 co-location can be achieved, thus making it more attractive.

The Commission has recently approved revisions to the co-location regime, such as sub-licensing and the acquisition of Type 1 space beyond 20 square metres. The Commission believes that these revisions may reduce some of the costs associated with Type 1 co-location but more importantly may allow for a more efficient use of the available co-location space in a CO.

The Commission disagrees with the assertion by TCI that Decision 2001-287 combined with Order 2001-378 will lead to a situation where an IC can control and manage a significant amount of floor space in a CO. Sub-licensing of co-location space in an ILEC CO can only take place under the following conditions:

Based on the above requirements, the Commission suggests that there is no business rationale for a co-locator to acquire excessive amounts of co-location space. In addition, the ILEC must pre-approve any sub-licensing of its co-location space. This would preserve the impartiality of the existing ILEC procedures.

The Commission has determined that the regime required for Bell Canada in Decision 2001-378 should be extended to all ILECs. While there is the potential for an IC or local exchange carrier (LEC) to strategically acquire additional Type 1 co-location space that is beyond its needs, there is no compelling business rationale for an IC or LEC to do so. The Commission also believes that abuses of the acquisition of Type 1 co-location space, if they do occur, would be very obvious and would be brought to the attention of the Commission either by the entrant or the ILEC.

Additional Type 1 co-location space will be made available in a CO in increments of one square metre, on a "first-come, first-served" basis, where space is available. As well, ILECs and entrants may apply to the Commission for assistance in resolving issues related to the acquisition of co-location space in a CO.

TCI (for Alberta and British Columbia) and the other ILECs (MTS, NBTel Inc., Island Telecom Inc., NewTel Communications Inc., Maritime Tel & Tel Limited and SaskTel) are directed to issue revised tariff pages allowing an existing Type 1 co-locator that has exhausted its initial 20 square metre maximum in a CO to acquire additional Type 1 co-location space in the CO, where space is available, in increments of one square metre.

Secretary General