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Telecom Decision CRTC 2006-55
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Ottawa, 8 September 2006
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Part VII application by Bell Canada concerning TELUS Communications Company's ADSL Access to Individual Line Service
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Reference: 8661-B2-200602401
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The Commission finds that the status of the rates associated with TELUS Communications Company's (TCC) ADSL [asymmetric digital subscriber line] Access to Individual Line Service should be modified from final to interim while the Commission determines the appropriate competitor service classification for this service. The Commission also directs TCC to show cause why, in the provision of this service, the connection between the central office main distribution frame and a service provider's co-located ADSL equipment cannot be provisioned using the Connecting Link A service.
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Application
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1.
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The Commission received an application by Bell Canada, dated 9 March 2006, filed pursuant to Part VII of the CRTC Telecommunications Rules of Procedure, requesting that the Commission reclassify TELUS Communications Company's (TCC) Carrier Access Tariff (CAT) item 210 - ADSL [asymmetric digital subscriber line] Access to Individual Line Service as a Category I competitor service, and direct TCC to file a Phase II cost study and revised rates reflecting Category I competitor service pricing (rates at incremental costs plus a 15 percent mark-up).1
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2.
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Bell Canada also requested that TCC's CAT item 210 be immediately amended such that the connection between the central office (CO) main distribution frame (MDF) and the service provider's co-located ADSL equipment would be established using Connecting Link A service, as per TCC's CAT item 215 and CAT item 105, for Alberta and British Columbia, respectively.
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3.
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Finally, Bell Canada requested that in the interim period in which TCC would be performing its cost study and the Commission would be reviewing TCC's costs, TCC's rates for its CAT item 210 be reset at cost plus a 15 percent mark-up based on the existing cost information.
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4.
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Bell Canada compared TCC's ADSL Access to Individual Line Service rates to those of its own Loop Administration and Support service, noting that these two services provided the same functionality. Bell Canada noted that TCC's ADSL Access to Individual Line Service was priced at $7 per month plus a one-time service charge of $100 per line, while its own Loop Administration and Support service was priced at $2.54 per month plus a one-time service charge of $42.01 per line.
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5.
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Bell Canada indicated that in Follow-up to Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34 - Service basket assignment, Telecom Decision CRTC 2003-11, 18 March 2003, as amended by Telecom Decision CRTC 2003-11-1, 23 May 2003 (Decision 2003-11), TCC's ADSL Access to Individual Line Service was classified as a Category II competitor service (not subject to set criteria for the determination of rates) while its own Loop Administration and Support service was classified as a Category I competitor service (subject to rates based on costs plus a mark-up of 15 percent).2 Bell Canada submitted that given the similar circumstances under which TCC provided its service, there could be no rational explanation for the differences in classification. Bell Canada submitted that TCC's higher rates and the requirement to establish separate links represented a considerable barrier to facilities-based competition in Western Canada.
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6.
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Bell Canada also indicated that it provided the connection between the CO MDF and the service provider's co-located ADSL equipment using the Connecting Link A element of its Access Services Tariff item 105, priced at $1.10 per month per 100 links plus service charge.3 Bell Canada noted that, in contrast, TCC's CAT item 210 currently requires the establishment of separate links, the pricing of which is based on the time and the charges incurred.
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Process
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7.
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The Commission received comments from TCC and Cybersurf Corp. (Cybersurf) dated 10 and 18 April 2006, respectively. Bell Canada replied to TCC's comments on 19 April 2006.
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Regulatory framework
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8.
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In Local competition, Telecom Decision CRTC 97-8, 1 May 1997 (Decision 97-8), the Commission sought to strike a balance between the provision of facilities through the incumbent local exchange carriers' (ILECs) competitor services and maintaining incentives for self-supply. The Commission defined an essential facility as a facility, function or service that was: monopoly controlled, required by a competitive local exchange carrier (CLEC) as a service input, and not able to be duplicated by a CLEC, economically or technically. The Commission determined that essential facilities would be priced at cost plus a 25 percent mark-up. With respect to other facilities for which there was competitive supply, but on a very limited basis (subsequently referred to as "near-essential" facilities), the Commission determined that these facilities should be priced as an essential service for a five-year period to accelerate entry.
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9.
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In Local competition: Sunset clause for near-essential facilities, Order CRTC 2001-184, 1 March 2001, the Commission extended the sunset period for near-essential facilities, without specifying a termination date, until such time as the market for such facilities would be sufficiently competitive.
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10.
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In Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002, as amended by Telecom Decision CRTC 2002-34-1, 15 July 2002 (Decision 2002-34), the Commission, among other things, established two categories of competitor services and assigned the ILECs' competitor services between the two categories. The Commission defined Category I competitor services as services in the nature of an essential service, including interconnection and ancillary services, essential services, and near-essential services, generally to be priced on the basis of Phase II costs plus a mandated 15 percent mark-up (a reduction from the 25 percent mark-up established in Decision 97-8). Category II competitor services were defined as those services developed for use by telecommunications service providers, other than services in the nature of an essential service, to be priced on a case-by-case basis.
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TCC's and Cybersurf's comments
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11.
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TCC submitted that Bell Canada had offered no evidence to support a reclassification other than the argument that the difference in classification between the two services could not be justified. TCC pointed to Decision 2003-11, where the Commission noted that the issue of whether the remaining ADSL service components (i.e. other than Bell Canada's ADSL Loop Administration and Support service) were in the nature of an essential service was being examined within the proceeding initiated by Bell Canada's Tariff Notice 6622 (TN 6622),4 and that these ADSL services should remain assigned as Category II competitor services until the conclusion of that proceeding.
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12.
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TCC submitted that its service's classification as a Category II competitor service was consistent with that of companies such as Aliant Telecom Inc. (Aliant Telecom),5 MTS Allstream Inc. (MTS Allstream), and Saskatchewan Telecommunications for services similar to those described in Bell Canada's application. TCC submitted that Bell Canada had not made the case for immediate relief based on competitive necessity, and that there were many facilities-based competitors in Western Canada, such as MTS Allstream, Navigata Communications, Bell Western Canada, Rogers Telecom Inc. (Rogers) and several cable carriers, that currently offered ADSL or ADSL-like services to business and residential customers.6 In TCC's view, Bell Canada's application was an attempt to circumvent the Commission's careful consideration of Bell Canada's TN 6622 and should be dismissed.
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13.
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Cybersurf supported Bell Canada's application and submitted that all ADSL service elements required by competitors should be Category I competitor services. Cybersurf requested that the Commission initiate a process to deal with that issue on an expedited basis.
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Bell Canada's reply comments
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14.
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Bell Canada replied that the classification inconsistency for services that offered the same functionality should be dealt with independently of a final disposition of TN 6622 so that parties would not be further disadvantaged by delays.
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Commission's analysis and determinations
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15.
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With respect to the issue of the classification of TCC's ADSL Access to Individual Line Service, the Commission notes that this service appears to provide essentially the same functionality as that offered by Bell Canada under its ADSL Loop Administration and Support service. The Commission considers that the classification and pricing treatment of these services can be addressed independently of the final disposition of Bell Canada's TN 6622.
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16.
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The Commission notes that the rates associated with TCC's ADSL Access to Individual Line Service are significantly higher than the rates charged by Bell Canada for its ADSL Loop Administration and Support service. In the Commission's view, the technology and the components used to provide the functionality associated with ADSL Access to Individual Line Service have significantly changed since TCC's current rates for this service were approved. Accordingly, the Commission considers that in these circumstances it would be appropriate to make interim the rates associated with TCC's ADSL Access to Individual Line Service, and for TCC to file a revised cost study.
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17.
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With respect to connecting links, the Commission considers that it would be appropriate to request TCC to show cause why its Connecting Link A service could not be used to establish the connection between the CO MDF and the service provider's co-located ADSL equipment in the provision of its ADSL Access to Individual Line Service.
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18.
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In light of the above, the Commission:
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- makes interim the rates associated with TCC's CAT item 210 - ADSL Access to Individual Line Service, effective the date of this Decision;
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- directs TCC to file a report on the economic evaluation of ADSL Access to Individual Line Service by 9 October 2006; and
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- directs TCC to show cause, by 29 September 2006, as to whether the connection between the CO MDF and the service provider's co-located ADSL equipment could be provisioned using Connecting Link A, as per TCC's CAT item 215 and CAT item 105, for Alberta and British Columbia, respectively, instead of by requiring the establishment of separate links priced based on time and charges incurred.
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19.
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Concurrent with the issuance of this Decision, the Commission is addressing interrogatories to TCC, notably to ascertain the extent of the similarities between TCC's ADSL Access to Individual Line Service and Bell Canada's Loop Administration and Support service.
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Secretary General
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This document is available in alternative format upon request, and may also be examined in PDF format or in HTML at the following Internet site: www.crtc.gc.ca
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_____________________
Footnotes:
1 TCC's ADSL Access to Individual Line Service provides ADSL service providers with access to a residential or business individual access line for the purpose of connecting that line to the provider's co‑located ADSL equipment.
2 Bell Canada pointed out that TCC had a tariff called ADSL Loop Administration and Support as part of its CAT item 214 - ADSL Access Service, which was categorized as a Category I competitor service in Decision 2003‑11, but that unlike Bell Canada's Loop Administration and Support tariff, it did not offer the functionality required to connect an access line to a service provider's co‑located ADSL equipment.
3 Bell Canada further indicated that for TCC and itself, Connecting Link A was classified as a Category I competitor service, and that in most instances of co‑location, service providers already subscribed to this service and no additional links were required.
4 In TN 6622, which was filed on 18 October 2001, Bell Canada proposed reduced ADSL access rates to move the prices closer to cost. TN 6622 was given interim approval on 21 December 2001.
5 On 7 July 2006, Bell Canada's regional wireline telecommunications operations in Ontario and Quebec were combined with, among other things, the wireline telecommunications operations of Aliant Telecom, Société en commandite Télébec, and NorthernTel, Limited Partnership to form Bell Aliant Regional Communications, Limited Partnership.
6 TCC further indicated that Bell Canada and Rogers jointly announced on 31 March 2006 the completion of the first phase of a new wireless broadband network that would allow access to the Internet, voice over Internet Protocol, and other applications. TCC noted that the initial deployment of the service included Vancouver, Victoria, Red Deer, Calgary, and Edmonton.
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Date Modified: 2006-09-08