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TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
Review of regulatory framework for wholesale
services and definition of essential service /
Examen du cadre de réglementation concernant les services
de gros et la définition de service essentiel
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
140 Promenade du Portage 140, Promenade du Portage
Gatineau, Quebec Gatineau (Québec)
October 11, 2007 Le 11 octobre 2007
Transcripts
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Transcription
Afin de rencontrer les exigences de la Loi sur les langues
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bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
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Toutefois, la publication susmentionnée est un compte rendu
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participant à l'audience publique.
Canadian Radio‑television and
Telecommunications Commission
Conseil de la radiodiffusion et des
télécommunications canadiennes
Transcript / Transcription
Review of regulatory framework for wholesale
services and definition of essential service /
Examen du cadre de réglementation concernant les services
de gros et la définition de service essentiel
BEFORE / DEVANT:
Konrad von Finckenstein Chairperson / Président
Barbara Cram Commissioner / Conseillère
Andrée Noël Commissioner / Conseillère
Elizabeth Duncan Commissioner / Conseillère
Helen del Val Commissioner / Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
Marielle Giroux-Girard Secretary / Secrétaire
Robert Martin Staff Team Leader /
Chef d'équipe du personnel
Peter McCallum Legal Counsel /
Amy Hanley Conseillers juridiques
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
140 Promenade du Portage 140, Promenade du Portage
Gatineau, Quebec Gatineau (Québec)
October 10, 2007 Le 10 octobre 2007
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
RESUMED: SALVATORE IACONO 447 / 2957
RESUMED: WILLIAM TAYLOR
RESUMED: PAUL ANDERSON
RESUMED: DENIS HENRY
RESUMED: MIRKO BIBIC
RESUMED: SERGE BABIN
RESUMED: MARGARET SANDERSON
RESUMED: PETER WATERS
Cross-examination by MTS Allstream (Cont'd) 631 / 4109
Cross-examination by Primus 889 / 6032
- v -
EXHIBITS / PIÈCES JUSTIFICATIVES
No. PAGE / PARA
MTS-4 Telecom Decision CRTC 90-27 and 699 / 4621
Telecom Decision CRTC 92-8
MTS-6 BCE Nexxia Inc. financial 723 / 4786
statements for year ending
December 31, 1999
MTS-7 BCE Nexxia Inc. financial 723 / 4786
Statements for year ending
December 31, 2000
MTS-8 Two tables entitled "Bell Quebec" 764 / 5128
And "Bell Ontario"
CRTC-4 List of services prepared by 788 / 5299
Commission Staff
MTS-9 ERG Opinion on Functional 798 / 5381
Separation
MTS-10 Document entitled "Price Cap 813 / 5485
Review and Related Issues",
prepared by Dr. William E. Taylor
PRIMUS-1 Excerpt from the Ontario Energy 901 / 6126
Board Act
PRIMUS-2 Affiliate Relationships Code for 901 / 6126
Electricity Distributors and
Transmitters
CRTC-5 The Monitoring Report 2007 917 / 6288
Gatineau, Quebec / Gatineau (Québec)
‑‑‑ Upon resuming on Thursday, October 11, 2007
at 0835 / L'audience reprend le jeudi
11 octobre 2007 à 0835
RESUMED: SALVATORE IACONO
RESUMED: WILLIAM TAYLOR
RESUMED: PAUL ANDERSON
RESUMED: DENIS HENRY
RESUMED: MIRKO BIBIC
RESUMED: SERGE BATIN
RESUMED: MARGARET SANDERSON
RESUMED: PETER WATERS
LISTNUM 1 \l 1 \s 41004100 THE CHAIRPERSON: Good morning. Let's resume.
LISTNUM 1 \l 14101 Ms Song, I would appreciate if this morning we could move a bit quicker than yesterday. You took an awful long time to establish the dates, that it took six years to get the various mandated orders. I think we can establish it by just asking is it true that it started on such a date and was issued on such and such a date and move into the substance.
LISTNUM 1 \l 14102 MS SONG: Thank you, Chairman. I will endeavour to do so.
LISTNUM 1 \l 14103 MR. BIBIC: Mr. Chairman, if I may, a very quick point as a preliminary housekeeping matter.
LISTNUM 1 \l 14104 We have a response to Ms Cram on the 41 percent and we can file it.
LISTNUM 1 \l 14105 The quick answer is Appendix 2 of the Monitoring Report indicates that alternative TSPs are defined as including incumbent TSP out‑of‑territory operations such as Bell Canada in B.C. and Alberta.
LISTNUM 1 \l 14106 We have it.
LISTNUM 1 \l 14107 THE CHAIRPERSON: Thank you. Would you just file it with the secretary.
LISTNUM 1 \l 14108 MR. BIBIC: Okay.
EXAMINATION (CONT'D) / INTERROGATOIRE (SUITE)
LISTNUM 1 \l 14109 MS SONG: Thank you, Mr. Chair.
LISTNUM 1 \l 14110 We also have provided an exhibit to the Bell panel with respect to the Monitoring Report. However, I will get a copy of that and address that with the panel a little later on.
LISTNUM 1 \l 14111 At paragraph 147 of Bell et al's 15th March evidence ‑‑ if you could kindly turn to that.
‑‑‑ Pause
LISTNUM 1 \l 14112 COMMISSIONER DUNCAN: Excuse me, Ms Song, what was the paragraph number?
LISTNUM 1 \l 14113 MS SONG: 147, Commissioner Duncan.
LISTNUM 1 \l 14114 COMMISSIONER DUNCAN: Thank you.
‑‑‑ Pause
LISTNUM 1 \l 14115 MS SONG: Okay, does everyone have that?
LISTNUM 1 \l 14116 So I will simply read out paragraph 147. It says that:
"Bell et al proposed that in the event that the Commission mandates wholesale access to an essential facility which can be used to provide multiple retail services, the Commission should place a restriction on the use of the facility to ensure that absent the access supplier's consent it can only be used to provide the retail service where there is a need for a remedy to address abuse of significant market power in a particular retail market."
(As read)
LISTNUM 1 \l 14117 It is actually the latter part of that quote that I have some questions about.
LISTNUM 1 \l 14118 So I would like to understand how the Commission would determine to use Bell et al's words, "whether there is a need for a remedy to address abuse of significant market power in a particular retail market."
LISTNUM 1 \l 14119 What kind of behaviour would satisfy what Bell et al mean by "abuse of significant market power"?
LISTNUM 1 \l 14120 MR. BIBIC: We mean that in the sense of the essential facilities test we have proposed, that denial of access would result in a substantial lessening of competition.
LISTNUM 1 \l 14121 MS SONG: So you mean that the Commission would have to find that there was actual denial of service?
LISTNUM 1 \l 14122 MR. BIBIC: Well, under the ex post test that we have proposed, yes, and under an ex ante test, I think it would have to be a little bit more forward‑looking.
LISTNUM 1 \l 14123 MS SONG: Could you provide an example of that?
LISTNUM 1 \l 14124 MR. BIBIC: Of what, of the definitions?
LISTNUM 1 \l 14125 MS SONG: Of the kind of behaviour that you are speaking about in this section of your evidence.
LISTNUM 1 \l 14126 MR. BIBIC: Sure. I can describe that using an example.
LISTNUM 1 \l 14127 Take a scenario where Bell Canada is the only local service provider in an exchange and no one else is providing service, and a CLEC comes along and wants to start competing for residential local service using unbundled loops, and the incumbent were to say no and deny access, under that scenario I could see the Commission saying: Well, loops are essential facilities in that exchange.
LISTNUM 1 \l 14128 A counter example would be there is also a cable company also providing service there, in which case denial of loops, if that were to happen, wouldn't result in a substantial lessening of competition.
LISTNUM 1 \l 14129 MS SONG: Would acts to increase rivals' costs satisfy abuse of significant market power?
LISTNUM 1 \l 14130 MR. BIBIC: I think ‑‑ well, you are getting into kind of abuse of dominance issues which are addressed through sections 78 and 79 of the Competition Act and the Bureau had a lot to say on that issue with respect to its Telecom Abuse Bulletin.
LISTNUM 1 \l 14131 We meant it here in the context of denial of access resulting in a substantial lessening of competition for the purposes of an essential facilities definition.
LISTNUM 1 \l 14132 MS SONG: So I just want to understand. Are you saying that you would have to find behaviour that would meet the test of sections 78 and 79 of the Competition Act in order to satisfy this criterion of a remedy?
LISTNUM 1 \l 14133 MR. BIBIC: No, Ms Song. I think I am trying to say that this has nothing to do with sections 78 and 79. We made that statement in the context of the definition of an essential facility.
LISTNUM 1 \l 14134 I mean just to put it ‑‑ to put another example. I gave you an example where denial of access to loops may constitute a finding of essentiality.
LISTNUM 1 \l 14135 What we are trying to say here is if in that exchange there is no residential telephony competition and denial of access to loops were to result in a substantial lessening of competition, the Commission could mandate access to loops to provide residential telephony but not access to the same loop to provide a retail internet service if the retail internet market were competitive.
LISTNUM 1 \l 14136 MS SONG: It was my reading of your evidence that your initial proposal at least in this proceeding was that the Commission use the Bureau's TAB framework; correct?
LISTNUM 1 \l 14137 MR. BIBIC: We proposed in our submission an essential facilities definition very similar to that set out in the Bureau's TAB.
LISTNUM 1 \l 14138 MS SONG: Right. So after the transition period, which is what I think this paragraph relates to, paragraph 147 says that the Commission should intervene only where there is a need for a remedy to address abuse of significant market power.
LISTNUM 1 \l 14139 My understanding was that your initial proposal was that that analysis should take place in accordance with the Bureau's TAB, and now you are telling me that that is not the case, that you have changed your position in that regard?
LISTNUM 1 \l 14140 MR. BIBIC: No, we did not change our position, Ms Song.
LISTNUM 1 \l 14141 What we were saying is the Commission would have to make a finding of essentiality and we propose they use the same definition of an essential facility that the Bureau proposed in the TAB.
LISTNUM 1 \l 14142 Now, the Bureau would use its definition for purposes of finding abuse of dominance. We were proposing they use that same definition, that the Commission use that same definition but for the purposes of finding essentiality.
LISTNUM 1 \l 14143 MS SONG: Mm‑hmm.
LISTNUM 1 \l 14144 MR. BIBIC: That is all we meant.
LISTNUM 1 \l 14145 MS SONG: I am not sure we are talking about the same thing, Mr. Bibic. I am trying to understand in what circumstances after the transition period would it be appropriate for the Commission to re‑mandate access to a facility and you are saying in paragraph 147 that that would only arise where there is a need to remedy an abuse of significant market power.
LISTNUM 1 \l 14146 MR. BIBIC: Well, Ms Song ‑‑
LISTNUM 1 \l 14147 MS SONG: So I am trying to understand what behaviour satisfies the criterion of a finding of abuse of significant market power.
LISTNUM 1 \l 14148 MR. BIBIC: Ms Song, I came here to speak on behalf of the company. I have an overall responsibility for this evidence.
LISTNUM 1 \l 14149 So I am trying to explain that in that event our position is that the Commission, to determine essentiality, would simply use the test of an essential facility which we have proposed.
LISTNUM 1 \l 14150 Yesterday, we went through one with Mr. Engelhart, which is at one of the interrogs we filed. I can't remember the number.
LISTNUM 1 \l 14151 If the Commission were to adopt an ex ante structure, we proposed a definition of an essential facility in our opening statement. That is really what we are saying. That is the test the Commission would use after the transition period to determine essentiality.
LISTNUM 1 \l 14152 MS SONG: But isn't it a component of your proposal that there be some kind of conduct in a retail market, that that is another component of your test for essentiality? That is what I am trying to drive at. I don't want general statements about your test for essentiality.
LISTNUM 1 \l 14153 I would like to know specifically in relation to your criterion of dominance or whatever it is in the retail market what kind of behaviour would the Commission have to find in order to satisfy your criterion.
LISTNUM 1 \l 14154 MR. BIBIC: Well, the answer is in the test that we have proposed. It is denial of access.
LISTNUM 1 \l 14155 MS SONG: That's it, that's all, denial of access?
LISTNUM 1 \l 14156 MR. BIBIC: Correct.
LISTNUM 1 \l 14157 MS SONG: Thank you.
LISTNUM 1 \l 14158 Now, moving on, it is my understanding that in its business segment operations Bell Canada has a small and medium business unit, a Bell West unit which operates west of Ontario and an Enterprise Unit; correct?
LISTNUM 1 \l 14159 MR. IACONO: Yes, that is correct, Ms Song.
LISTNUM 1 \l 14160 MS SONG: And what class of customers is served by the Enterprise Unit?
LISTNUM 1 \l 14161 MR. IACONO: The Enterprise Unit, that is the unit that I am currently working in. We deal with customers that have operations across the country, very large business basically.
LISTNUM 1 \l 14162 MS SONG: All right. So regardless of location?
LISTNUM 1 \l 14163 MR. IACONO: Yes. Most of them are national.
LISTNUM 1 \l 14164 MS SONG: And you would agree with me that Bell Canada through its Enterprise Unit is the most significant competitor in that market, in that segment of the business market as defined by Bell Canada?
LISTNUM 1 \l 14165 MR. IACONO: Well, we are certainly an important competitor and there are several others as well.
LISTNUM 1 \l 14166 MS SONG: Does it have the largest market share in that segment of the market?
LISTNUM 1 \l 14167 MR. IACONO: For some products yes, for some products no.
LISTNUM 1 \l 14168 MS SONG: And what products are you referring to as being products for which you are the most significant competitor?
LISTNUM 1 \l 14169 MR. IACONO: Well, I am looking at, for example, legacy services, Frame Relay, services such as those. Clearly, we are not the largest player in terms of market share.
LISTNUM 1 \l 14170 IP services, which is on the newer, obviously, connectivity type services, we obviously have significant capabilities but so do the major competitors.
LISTNUM 1 \l 14171 MS SONG: Yes. And what would that market share estimate be ‑‑
LISTNUM 1 \l 14172 MR. IACONO: I don't have the ‑‑
LISTNUM 1 \l 14173 MS SONG: ‑‑ in the higher speed data access services market?
LISTNUM 1 \l 14174 MR. IACONO: I don't have the market shares with me here.
LISTNUM 1 \l 14175 MS SONG: Do you have any idea, Mr. Iacono?
LISTNUM 1 \l 14176 MR. IACONO: In some segments we are probably ‑‑ just looking at ‑‑ I am just going from memory.
LISTNUM 1 \l 14177 If I look at IP VPN, for example, I think we are definitely the largest in terms of IP VPN circuits but I recall from some material that MTS Allstream is not too far behind Bell in terms of number of circuits in the IP VPN.
LISTNUM 1 \l 14178 MTS Allstream has a very significant MPLS network and a full suite of services, and in fact, I believe in some cases MTS Allstream has some services that Bell is not currently offering in the IP space.
LISTNUM 1 \l 14179 So, you know, it is hard to generalize. It depends on the particular product area that one is looking at.
LISTNUM 1 \l 14180 MS SONG: Yes. I am actually looking for a number but you are not ‑‑ you don't know off the top of your head, you can't provide us with an estimate?
LISTNUM 1 \l 14181 MR. IACONO: No, I can't, not off the top of my head.
LISTNUM 1 \l 14182 MS SONG: Would you undertake to do so for the markets that you have mentioned?
LISTNUM 1 \l 14183 MR. BIBIC: Subject to confidentiality if the Commission ‑‑ we could provide what we have to the Commission in confidence.
LISTNUM 1 \l 14184 MS SONG: Thank you.
LISTNUM 1 \l 14185 But the fact is that in 2006, according to your 2006 Annual Report, the Enterprise Unit alone accounted for revenue totalling approximately $2.5 billion; correct?
LISTNUM 1 \l 14186 MR. IACONO: Yes, that is correct and that comprises two broad categories of portfolios. One is the connectivity, which is all of the ‑‑ well, the connectivity services ranging from basic access to the very hi‑speed bandwidth access and that is about half of the revenues.
LISTNUM 1 \l 14187 The other half is all of the newer ICT professional services, security services.
LISTNUM 1 \l 14188 It is a growing business, and our proportion relative to the overall market in the ICT space of that is still quite small.
LISTNUM 1 \l 14189 So the $2.5 billion is a big number, but it comprises a very vast portfolio of connectivity, managed services, professional services, infrastructure services, equipment, et cetera.
LISTNUM 1 \l 14190 MS SONG: It is Bell's position ‑‑ and I want to return to the aspect of its test that requires that the owner of the facility, which is claimed to be essential, must also be dominant in downstream retail markets.
LISTNUM 1 \l 14191 Clearly, the state of competition in retail markets is a key component in your proposal.
LISTNUM 1 \l 14192 Is that correct?
LISTNUM 1 \l 14193 MR. BIBIC: That's correct.
LISTNUM 1 \l 14194 MS SONG: I want to turn now to Bell et al.'s argument that there is competition sufficient to protect the interests of users in retail business markets.
LISTNUM 1 \l 14195 In order to assist the Commission, I would like to focus on the argument set out at pages 9 to 23 of Bell's July 5th Supplementary Evidence.
LISTNUM 1 \l 14196 As I read pages 9 to 23 of Bell et al.s' Supplementary Evidence, there are essentially two aspects to the argument that there is competition sufficient to protect the interests of users in retail business markets.
LISTNUM 1 \l 14197 The first is the presence of other telephone companies in business telecommunications markets and, in particular, in the large to very large segments of business telecommunications markets, and those points are set out, I believe, at pages 9 to 15.
LISTNUM 1 \l 14198 The second is the potential of cable, electrical utility and wireless service providers to enter into the small and medium business segment of business telecommunications markets.
LISTNUM 1 \l 14199 Are you following me so far?
LISTNUM 1 \l 14200 MR. BIBIC: Yes.
LISTNUM 1 \l 14201 MS SONG: At this time I would like to focus on the first aspect, the arguments and the evidence that you set out at pages 9 to 15.
LISTNUM 1 \l 14202 Again, as I read pages 9 to 15, you are relying principally on bidding, or a request for proposal, or RFP activity as evidence of the fact that there is competition sufficient to protect the interests of users in retail business markets.
LISTNUM 1 \l 14203 Correct?
LISTNUM 1 \l 14204 MR. BIBIC: Correct.
LISTNUM 1 \l 14205 MS SONG: So this bidding activity, and the competitors that are mentioned at pages 9 to 15, are present in the enterprise segment of retail business telecommunications markets. Correct?
LISTNUM 1 \l 14206 Typically or primarily.
LISTNUM 1 \l 14207 MR. IACONO: Primarily, yes.
LISTNUM 1 \l 14208 MS SONG: You don't cite any market share evidence, at least in this part of your July 5th Supplementary Evidence. Correct?
LISTNUM 1 \l 14209 MR. BIBIC: Correct. We didn't think we needed to.
LISTNUM 1 \l 14210 MS SONG: The evidence that you do cite is a list of 18 competitor press releases from a three and a half year period, between January 13, 2004 and June 5, 2007. Correct?
LISTNUM 1 \l 14211 MR. IACONO: Yes. Those 18 were shown as examples of bids won by competitors that were made public by competitors through their websites.
LISTNUM 1 \l 14212 There are obviously a lot more that were not necessarily made public.
LISTNUM 1 \l 14213 MS SONG: Including your own.
LISTNUM 1 \l 14214 MR. IACONO: Yes. In fact, we provided a few in response to the deficiency response, I believe ‑‑ or deficiency argument. We provided 5 or 6 ‑‑ I am going from memory ‑‑ as examples ‑‑
LISTNUM 1 \l 14215 MS SONG: Of your own?
LISTNUM 1 \l 14216 MR. IACONO: ‑‑ of our own, yes.
LISTNUM 1 \l 14217 MS SONG: We will discuss the wholesale facilities and services leased by competitors that actually enable even this level of bidding activity on the part of competitors, but, if I understand you correctly, Mr. Iacono, you are not claiming that these 18 press releases are at all representative of overall bidding activity in the enterprise segment. Correct?
LISTNUM 1 \l 14218 MR. IACONO: That's correct.
LISTNUM 1 \l 14219 In fact, we noted that these were illustrations based on publicly available press releases.
LISTNUM 1 \l 14220 MS SONG: Right, and in your interrogatory responses, I think you couch this evidence by saying that they are only examples.
LISTNUM 1 \l 14221 MR. IACONO: That's correct.
LISTNUM 1 \l 14222 MS SONG: What would be representative, in fact, is the number that we have already discussed, the $2.5 billion in 2006 alone, garnered from the segment of the business market.
LISTNUM 1 \l 14223 Would you agree with me?
LISTNUM 1 \l 14224 MR. IACONO: Certainly, the $2.5 billion would not be representative of bidding activity.
LISTNUM 1 \l 14225 MS SONG: Perhaps not bidding activity alone, but my understanding is that the $2.5 billion revenue figure does, in fact, encompass multi‑year contracts, one, pursuant to bids, or contract renewals in the enterprise segment. Correct?
LISTNUM 1 \l 14226 MR. IACONO: Yes.
LISTNUM 1 \l 14227 As I said before, though, covering services that are way beyond connectivity, as well. So it is a broad, broad portfolio, a full suite of services.
LISTNUM 1 \l 14228 MS SONG: In order to assist the Commission and this public process, will Bell Canada provide, for the same three and a half year period that is covered by your July 5th Supplementary Evidence, the number of RFPs that Bell Canada bid on and won in that period?
LISTNUM 1 \l 14229 MR. IACONO: I think we had that discussion through the deficiency response, and I will leave it to Mr. Bibic to comment, or counsel.
LISTNUM 1 \l 14230 MR. DANIELS: Excuse me. I am sorry to interrupt, but this actually was an issue of a deficiency response we had at argument. The Commission has ruled on that actual request already.
LISTNUM 1 \l 14231 So I think we have already had this discussion, and the Commission has already ruled on it.
LISTNUM 1 \l 14232 MS SONG: There was a deficiency process, and Commission Staff declined to order that Bell produce that information, but I am asking you now, today, because you have put the issue of bidding activity squarely in your evidence, that you provide that information in order to put these 18 press releases, over a three and a half year period, in context.
LISTNUM 1 \l 14233 Will you do that?
LISTNUM 1 \l 14234 MR. IACONO: Ms Song, if I could refer you to paragraph 9 of page 11 of the July Supplementary Evidence, the pages that you raise, it is very clear there that, for example, in a recent Commission decision ‑‑ and I could probably think of a couple of others where the Commission itself has considered ‑‑ and I quote:
"The Commission, therefore, considers that evidence of rivalrous behaviour, primarily in the form of bid responses, is sufficient to demonstrate that the market is competitive enough to warrant forbearance." (As read)
LISTNUM 1 \l 14235 Now, that was in a forbearance context. My point is, the issue of "Does bidding and bidding activity represent an indication of competitive activity" has been determined, number one.
LISTNUM 1 \l 14236 Number two, I also want to cite, by way of an important example ‑‑ government bids, for example, be they federal government, provincial government or municipal government, follow extremely rigorous bid processes. All one need do is go on the MERX site and you can see the kind of processes that those bids entail, and several businesses of a smaller size than obviously the federal government use very similar principles to make procurements.
LISTNUM 1 \l 14237 We procure all types of things at Bell Canada, and we use RFP processes for many of our procurement requirements, be they network related, where we have a choice, or be they pen and paper.
LISTNUM 1 \l 14238 Those processes are well established. Large organizations, in particular, have ‑‑ they have to have very tight procurement processes in order to ensure that they give the proper incentives to potential suppliers to be as competitive as possible.
LISTNUM 1 \l 14239 MS SONG: Mr. Iacono, I am not contesting the fact that you have brought this evidence forward as an indicia of competitiveness in retail business markets, what I am asking you is, if you are going to put this kind of evidence in issue, then I think it is incumbent upon you, the most significant competitor in the enterprise segment of the business market, to come forward with at least the number of RFPs that you have bid on and the number of RFPs that you have won.
LISTNUM 1 \l 14240 MR. BIBIC: Well, Ms Song, our position ‑‑
LISTNUM 1 \l 14241 THE CHAIRPERSON: Ms Song, I am confused here. I thought the interjection from the Competition Bureau ‑‑ I'm sorry, who are you representing?
LISTNUM 1 \l 14242 MR. DANIELS: Sorry, I'm representing The Companies.
LISTNUM 1 \l 14243 THE CHAIRPERSON: The Companies, okay. Well, this has already dealt with interrogatories, and so therefore I really don't quite understand on what basis you feel you can pose a question now in cross‑examination.
LISTNUM 1 \l 14244 MS SONG: Well, I was not certain whether the commissioners, themselves, had had an opportunity to consider this issue. It's our companies position that, if this evidence is to be tested, that we should know of the total amount of RFPs that occurred during that period, how many ‑‑
LISTNUM 1 \l 14245 THE CHAIRPERSON: You surely don't expect me to disavow the Commission. If the Commission ruled on it in whatever form, that's the Commission's decision.
LISTNUM 1 \l 14246 MS SONG: All right, I will move on, then, Mr. Chair.
LISTNUM 1 \l 14247 Now, I believe I have read Bell Aliant's interrogatory responses correctly, that it does not have any out‑of‑territory operations. Correct?
LISTNUM 1 \l 14248 MR. HENRY: That's correct.
LISTNUM 1 \l 14249 MS SONG: Bell Canada, in its out‑of‑territory operations, does it lease any facilities from cable companies?
LISTNUM 1 \l 14250 MR. BIBIC: We don't think so, but I don't know for actual fact.
LISTNUM 1 \l 14251 MS SONG: All right. If you come to believe otherwise, you will let me know?
LISTNUM 1 \l 14252 MR. BIBIC: Absolutely.
LISTNUM 1 \l 14253 MS SONG: It's my understanding that you are a partner in Inukshuk Wireless Partnership?
LISTNUM 1 \l 14254 MR. BIBIC: That's correct.
LISTNUM 1 \l 14255 MS SONG: And Inukshuk holds 323 licences across Canada in the 2.3 gigahertz and 3.5 gigahertz bands. Correct?
LISTNUM 1 \l 14256 Does that number sound about right to you?
LISTNUM 1 \l 14257 MR. BIBIC: There's a large number of licences, so I don't think there's much need to quibble with the number of licences we have. The reason I was hesitating is I thought our licence spectrum was in the 2.5 gigahertz band.
LISTNUM 1 \l 14258 MS SONG: You are referring to Inukshuk now, when you say "our"?
LISTNUM 1 \l 14259 MR. BIBIC: Correct.
LISTNUM 1 \l 14260 MS SONG: Okay, I could be mistaken, but I'm fairly sure it's 2.3 and 3.5. But, in any event, regardless of the numbers, this is spectrum that is capable of utilizing Wi‑Max technology. Correct?
LISTNUM 1 \l 14261 MR. BIBIC: Well, it's pre‑Wi‑Max right now, but we expect that, ultimately, there will be a Wi‑Max standard over that spectrum.
LISTNUM 1 \l 14262 MS SONG: All right.
LISTNUM 1 \l 14263 Did Mr. Babin have something to add to that response?
LISTNUM 1 \l 14264 MR. BIBIC: No.
LISTNUM 1 \l 14265 MS SONG: Okay.
LISTNUM 1 \l 14266 And in its out‑of‑territory operations, does Bell Canada, today, use Wi‑Max to provision last‑mile access connectivity between a customer premises and, say, Bell West's central offices?
LISTNUM 1 \l 14267 MR. BABIN: Yes, we do, Ms Song.
LISTNUM 1 \l 14268 MS SONG: And where would that be?
LISTNUM 1 \l 14269 MR. BABIN: In the Bell West territory, out of territory for the ILEC.
LISTNUM 1 \l 14270 MS SONG: Sorry, for the ILEC? What does that mean?
LISTNUM 1 \l 14271 MR. BABIN: Out of our ILEC territory, which is Ontario and Quebec ‑‑
LISTNUM 1 \l 14272 MS SONG: Yes.
LISTNUM 1 \l 14273 MR. BABIN: ‑‑ we do use Wi‑Max as a last‑mile facility.
LISTNUM 1 \l 14274 MS SONG: Right. But my question had to do with your out‑of‑territory operations.
LISTNUM 1 \l 14275 MR. BABIN: That's right. Our out of territory is in Bell in the West, is out of territory of Ontario and Quebec ‑‑
LISTNUM 1 \l 14276 MS SONG: Right.
LISTNUM 1 \l 14277 MR. BABIN: ‑‑ and we do use Wi‑Max technology for last‑mile facilities.
LISTNUM 1 \l 14278 MS SONG: All right.
LISTNUM 1 \l 14279 You also mention satellite technology as a potential access technology?
LISTNUM 1 \l 14280 MR. BABIN: Yes.
LISTNUM 1 \l 14281 MS SONG: Does you Bell West unit use satellite service to provision last‑mile access connectivity?
LISTNUM 1 \l 14282 MR. BABIN: Not that I'm aware.
LISTNUM 1 \l 14283 MS SONG: Okay.
LISTNUM 1 \l 14284 I would like to move on now to Bell et al's position on interconnection services. I believe that you have included interconnection services not as essential facilities or services per se, but services that may still require regulation for technical or social reasons. Correct?
LISTNUM 1 \l 14285 MR. HENRY: That's correct.
LISTNUM 1 \l 14286 MS SONG: You would limit, however, mandated interconnection to only those services that are related to and ancillary to local and toll interconnection. Correct?
LISTNUM 1 \l 14287 MR. HENRY: That's correct.
LISTNUM 1 \l 14288 MS SONG: But that would extend to services ancillary to both toll and local interconnection. Correct?
LISTNUM 1 \l 14289 MR. HENRY: Yes.
LISTNUM 1 \l 14290 MS SONG: Okay. However, it is your company's position that IP interconnection arrangements need not be mandated. Correct?
LISTNUM 1 \l 14291 MR. HENRY: Sorry, which interconnection arrangements?
LISTNUM 1 \l 14292 MS SONG: Internet protocol, IP to IP interconnection.
LISTNUM 1 \l 14293 MR. HENRY: Well, it depends what kind of IP interconnection you are talking about, but I think perhaps Mr. Babin can talk to the specific.
LISTNUM 1 \l 14294 If you are talking CLECs offering local service on an IP basis, and that kind of IP to IP interconnection, I believe there are many technical issues associated with that that perhaps Mr. Babin could talk to.
LISTNUM 1 \l 14295 MS SONG: Well, actually, before Mr. Babin elaborates, I just want to know whether it's your proposal in this proceeding that IP to IP interconnection services be mandated or whether that falls under your negotiation principles.
LISTNUM 1 \l 14296 MR. HENRY: Well, ultimately, they could be mandated, if it's for the purpose of CLEC to CLEC, or CLEC to ILEC, but a CLEC that's offering local service on an IP platform. So, ultimately, that could be mandated. But the problem is that there are many, many technical issues, again, that Mr. Babin can speak to, that have prevented us from getting to the point of reaching some kind of industry consensus on this.
LISTNUM 1 \l 14297 MS SONG: And when you say "CLEC to CLEC IP interconnection" is that ‑‑
LISTNUM 1 \l 14298 MR. HENRY: Well, I'm distinguishing it from the Internet ‑‑
LISTNUM 1 \l 14299 MS SONG: Right.
LISTNUM 1 \l 14300 MR. HENRY: ‑‑ because Internet IP pairing, I mean, that's done today and there's no Commission intervention. And the web works just fine without out.
LISTNUM 1 \l 14301 MS SONG: Right. So your position would be that IP interconnection for the purposes of providing voice services, data services, at whatever speed, that would all fall under mandated interconnection. Correct?
LISTNUM 1 \l 14302 MR. HENRY: Yes.
LISTNUM 1 \l 14303 MS SONG: What kind of services would not be covered by specifically, and perhaps Mr. Babin can explain what kind of IP interconnection to provide what kind of services would not be mandated in your proposal.
LISTNUM 1 \l 14304 MR. HENRY: Well, I think I have answered that. In the Internet world, there are pairing arrangements around the world that have been entered into without regulatory intervention. Unless and until there were a problem that were ever to develop, I don't see why we would be looking for a solution to a problem that doesn't exist.
LISTNUM 1 \l 14305 On the voice side, if you have a CLEC that operates on an IP basis wanting to interconnect with a CLEC that operates on a TDM basis, well, that is something that, ultimately, could be mandated. It is something that has been looked at and is being looked at actively in CISC.
LISTNUM 1 \l 14306 As I say, the reason it hasn't happened yet is there are a multitude of technical reasons which, again, I think Mr. Babin could explain.
LISTNUM 1 \l 14307 MS SONG: Right. For example, when you say there's a multitude of issues that take a long time to resolve, one example of that would be the length of time it took to resolve the IP interconnection guidelines issue, which was first brought forward to the CISC.
LISTNUM 1 \l 14308 In, I believe, the early part of 2004, the Commission directed that the parties achieve negotiated resolution of that issue by November 2005. It wasn't until, I believe, the latter part of 2006 that something was put forward to the Commission, and finally approved by the Commission. So that's the kind of time that we are looking at to these kinds of negotiations taking to resolve.
LISTNUM 1 \l 14309 MR. BABIN: Yes. I would add, Ms Song, it's not really negotiations, it's really industry discussions. I mean, if you look around North America, there is actually a very limited number of IP interconnections between CLECs and ILECs.
LISTNUM 1 \l 14310 The standards are continually evolving and, as you know, as you mentioned, the Technical Bulletin 14 was approved back in April of this year, and the team have recommended, through work on TIF 19, to come up with those guidelines. But as I said, the protocols and the standards continue to evolve.
LISTNUM 1 \l 14311 Now, to do IP‑to‑IP interconnection within your own network, very easy because you know what is on each end of that interconnection. But dealing with a multiple group of various companies, different technologies, different technology vendors, it is very difficult to land on a standard, and that is really the discussion that is going on.
LISTNUM 1 \l 14312 And I might add as well, since October last year there has been a lot of submissions and a lot of contributions by all members of this committee through CISC. Bell has contributed nine submissions, TELUS has contributed six, FCI Broadband has contributed four, and I might add MTS Allstream have been at the meetings but haven't contributed changes to move these standards forward.
LISTNUM 1 \l 14313 So, you know, there is a lot of discussion, it is not an unwillingness to come up with a standard, it is really coming up with a consensus and working with the electronic manufacturers to come up with that standard.
LISTNUM 1 \l 14314 THE CHAIRPERSON: Do I understand you, the issues are technical, not business then?
LISTNUM 1 \l 14315 MR. BABIN: That is correct, Mr. Chair.
LISTNUM 1 \l 14316 THE CHAIRPERSON: Yes, but I mean is it tested. You suggested we adopt it, all deals with business, not with technical incumbencies. So assuming that these technical ones could be solved, do you expect to be able to workout a business arrangement and supply these services?
LISTNUM 1 \l 14317 MR. BIBIC: The answer, for the most part, is yes. But, under our proposal, we acknowledge that there could be some issues that are industry‑wide and just can't be resolved because they are technical or they are based on standards and they are just not commercial. In which case, the Commission could step in and say, let us mandate a solution for all.
LISTNUM 1 \l 14318 MS SONG: I would like you to now turn to your Appendix 10, to your 15 March evidence please.
LISTNUM 1 \l 14319 Is everyone with me?
LISTNUM 1 \l 14320 MR. BIBIC: We are.
LISTNUM 1 \l 14321 MS SONG: In this appendix Bell et al cite two examples; one from the broadcasting industry and the other from I believe the transportation industry of possible precedent models that could be followed, correct?
LISTNUM 1 \l 14322 MR. BIBIC: Correct, they were just examples.
LISTNUM 1 \l 14323 MS SONG: Right. And I have to ask, in the broadcasting example, are programming undertakings and distribution undertakings, in addition to being suppliers one to the other, are they also competitors?
LISTNUM 1 \l 14324 MR. BIBIC: Well, I suppose there could be vertically integrated distribution undertakings. I know, that Rogers, for example, is both programming undertaking and a distribution undertaking.
LISTNUM 1 \l 14325 MS SONG: Right. But when they are negotiating distribution agreements the unit or the entity, affiliate of Rogers that is coming forward seeking a distribution agreement with another distribution undertaking, are they considered to be competitors in the same relevant market?
LISTNUM 1 \l 14326 MR. BIBIC: I could see them not being competitors. I mean, I am not as familiar with broadcasting as I am with telecom, but..
LISTNUM 1 \l 14327 MS SONG: Right. And in the transportation example, similarly my understanding is that the negotiation model takes place between shippers and carriers?
LISTNUM 1 \l 14328 MR. BIBIC: Yes, I have more familiarity with that, not more, but I have some familiarity with that and that is correct.
LISTNUM 1 \l 14329 MS SONG: Okay. And I assume that you would also agree with me that shippers and carriers, again, are not competitors?
LISTNUM 1 \l 14330 MR. BIBIC: Typically not.
LISTNUM 1 \l 14331 MS SONG: Okay. And is MTS Allstream a customer of yours?
LISTNUM 1 \l 14332 MR. BIBIC: Yes.
LISTNUM 1 \l 14333 MS SONG: One of your biggest?
LISTNUM 1 \l 14334 MR. ANDERSON: Yes, they are.
LISTNUM 1 \l 14335 MS SONG: It is one of your biggest customers and is also one of your biggest competitors in retail business markets, correct?
LISTNUM 1 \l 14336 MR. BIBIC: Yes.
LISTNUM 1 \l 14337 MS SONG: Now that, to me, seems like a distinguishing feature between the telecom industry and the two examples that you cite, you would agree with me?
LISTNUM 1 \l 14338 MR. BIBIC: Would you repeat the question please, Ms Song?
LISTNUM 1 \l 14339 MS SONG: So the fact that in the two examples that you cite the negotiations are happening between entities who are not competitors in the same relevant market is a salient fact that we need to consider in determining how your negotiation model is going to work?
LISTNUM 1 \l 14340 MR. BIBIC: Well, we believe the negotiation model will work because we are going to have an incentive to reach arrangements with our big customers.
LISTNUM 1 \l 14341 MS SONG: All right.
LISTNUM 1 \l 14342 MR. HENRY: I might add, the Commission has expedited hearing processes today between competitors and they encourage parties to negotiate. And as a result of having that very process, parties often do negotiate and often do settle before it gets to the hearing, and very much they are competitors.
LISTNUM 1 \l 14343 MS SONG: Yes, and I think the Commission has in its own records how much time it does actually take to resolve competitor disputes.
LISTNUM 1 \l 14344 MR. HENRY: For the expedited hearings? The expedited hearings are very fast.
LISTNUM 1 \l 14345 MS SONG: There is lead‑up to expedited hearings ‑‑
LISTNUM 1 \l 14346 MR. HENRY: They often get settled very fast, even before you get there.
LISTNUM 1 \l 14347 MS SONG: Right.
LISTNUM 1 \l 14348 MR. ANDERSON: If I could add, Ms Song. Sorry, if I could just add to that.
LISTNUM 1 \l 14349 MS SONG: No problem, Mr. Anderson.
LISTNUM 1 \l 14350 MR. ANDERSON: You are quite right, that Allstream is one of our largest customers. And when you look at the model of negotiate first, I think what we believe is that two parties sitting down and trying to make an arrangement is a much simpler and streamlined process than dealing within a much broader spectrum, which would include Commission involvement and so on. So we are confident.
LISTNUM 1 \l 14351 I mean, as we talked about yesterday, wholesale is a very important business for us, so we are not interested in being uncooperative.
LISTNUM 1 \l 14352 MS SONG: Sorry, your comment that bilateral party‑to‑party negotiations would work better than if the Commission were involved and overseeing the negotiation, I am just trying to understand that. Is that what you are saying?
LISTNUM 1 \l 14353 MR. ANDERSON: I think from a starting point where two parties are sitting down, working through a particular issue, whatever that might be, and coming to an arrangement I think is a good starting point. Absolutely, the Commission has a very strong role and would get involved as required.
LISTNUM 1 \l 14354 MS SONG: Right. I want to turn back to perhaps a specific example, specific examples that you yourselves have raised yesterday. I believe Mr. Bibic mentioned the example of negotiations occurring in the wholesale arm of your business with respect to forborne services. Do you recall those statements?
LISTNUM 1 \l 14355 MR. ANDERSON: Yes, I do.
LISTNUM 1 \l 14356 MS SONG: And what forborne services are you referring to there or were you referring to?
LISTNUM 1 \l 14357 MR. ANDERSON: Forborne services is voice and data, so that could be long distance, digital private line on the data side are a couple of examples on both voice and data.
LISTNUM 1 \l 14358 MS SONG: Right. And to use the language of the Commission and of the industry, you are referring there to interexchange private line services amongst other things?
LISTNUM 1 \l 14359 MR. ANDERSON: Correct.
LISTNUM 1 \l 14360 MS SONG: All right. And my understanding is that interexchange private line or IXPLs are forborne on a section by section basis, cross‑section by cross‑section basis?
LISTNUM 1 \l 14361 MR. ANDERSON: That is my understanding as well.
LISTNUM 1 \l 14362 MS SONG: And the Commission forebears from regulating IXPLs ‑‑
LISTNUM 1 \l 14363 MR. ANDERSON: In those instances.
LISTNUM 1 \l 14364 MS SONG: ‑‑ when there is actually an alternate source of supply on that cross‑section, correct?
LISTNUM 1 \l 14365 MR. ANDERSON: I would agree with that.
LISTNUM 1 \l 14366 MS SONG: So you would agree with me that the dynamics involved in that negotiation are driven by the fact that there is an alternate source of supply for that facility, correct?
LISTNUM 1 \l 14367 MR. ANDERSON: Yes. But I would also say, in sitting down with any large customer, I don't care if it is in wholesale or retail or otherwise, I think the fact that you can't look at one specific situation in isolation. I mean, you look at the overall customer relationship and work accordingly. As I said earlier, we are not interested in being uncooperative.
LISTNUM 1 \l 14368 MR. BABIN: And, Ms Song, if I can just add. I mean, I have been in the business for over 20 years, I have been on the competitive side and I have negotiated with ILECs and there is an incentive for them to negotiate around services, last mile facilities, transport facilities, IXPLs, so I have seen it, I have negotiated myself.
LISTNUM 1 \l 14369 MS SONG: Right. And I was merely trying to point out that when you talk about forborne services and negotiations occurring in your wholesale arm for forborne services, the fact that there is an alternate source of supply for IXPL is a driving factor in those types of negotiations.
LISTNUM 1 \l 14370 MR. BIBIC: Well, Ms Song, you jumped from technical to forborne services.
LISTNUM 1 \l 14371 On the technical services front, we suggest that we should negotiate first regime. If it doesn't work, the Commission can step in. That is the whole point of negotiate first.
LISTNUM 1 \l 14372 On non‑essential services, we are coming at it from the perspective that both parties will have a willingness and an openness to negotiate. I suspect that in the business side of your client's business that they would too.
LISTNUM 1 \l 14373 For example, in Hong Kong, once wholesale regulation was scaled back, it took the incumbent three to four months to negotiate arrangements with CLECs for the supply of GAS and things like local loops.
LISTNUM 1 \l 14374 MS SONG: Mr. Anderson also mentioned in an earlier statement that he felt that party‑to‑party, without the intervention of the Commission, would work fine. Have I represented your evidence correctly?
LISTNUM 1 \l 14375 MR. ANDERSON: Yes, I simply said that two parties sitting down and initially trying to work through an arrangement is a good starting point.
LISTNUM 1 \l 14376 As I will just reinforce, the Commission, obviously, as we have outlined in our evidence and proposals, has a very strong role, as required.
LISTNUM 1 \l 14377 MS SONG: I would like to go back to an example that Mr. Iacono raised yesterday as having been an example of successful, I believe, multi‑party negotiations in relation to Tariff Notice 6767D, and the establishment of the wholesale bundled HSA and GAS internet access services, if you will permit me.
LISTNUM 1 \l 14378 It is my understanding that in those negotiations or leading up to those negotiations there was a significant degree of Commission intervention that actually led up to those negotiations. Is that correct, Mr. Iacono?
LISTNUM 1 \l 14379 MR. IACONO: Yes, I wasn't involved in that prior to that, but I do understand that there were files and tariff notices ‑‑ not tariff notices, but applications going back to 2001‑2002. I don't remember the exact dates, but, sure.
LISTNUM 1 \l 14380 MS SONG: So, with respect to that bundled internet service, the Commission ‑‑
LISTNUM 1 \l 14381 MR. BIBIC: Ms Song, sorry to interrupt, what do you mean by bundled internet service? I was reading the transcript yesterday and I got bogged down on that point. I just want to make sure we are all clear before we answer the question.
LISTNUM 1 \l 14382 MS SONG: Actually, I think it is pretty clear because we are talking about your tariffed HSA and GSA service.
LISTNUM 1 \l 14383 MR. BIBIC: It is not bundled though.
LISTNUM 1 \l 14384 MS SONG: What do you mean by bundled?
LISTNUM 1 \l 14385 MR. BIBIC: Our HSA and GAS service provides access ‑‑ it goes from the premise back to the central office.
LISTNUM 1 \l 14386 MS SONG: Right.
LISTNUM 1 \l 14387 MR. BIBIC: So, when you say "bundled" I don't know what you mean.
LISTNUM 1 \l 14388 MS SONG: It is the end‑to‑end, or to use Mr. Anderson's word, it is a dedicated internet access service.
LISTNUM 1 \l 14389 MR. BIBIC: What do you mean by end‑to‑end? From which end to which end? I wasn't going to bring this up, but you are using the word "bundled" again, and I just want to make sure nothing turns on it before we answer your question.
LISTNUM 1 \l 14390 MS SONG: I don't have it in front of me, but ‑‑ here it is.
LISTNUM 1 \l 14391 I think what I mean, and just to be clear for the Commission, is that it is not an unbundled service. As I believe Mr. Anderson confirmed yesterday, it would be of no use to a competitor who wants to collocate and use part of its network in order to provide the internet access service to the end use customer.
LISTNUM 1 \l 14392 MR. BIBIC: But, you see, even with GAS and HSA, you go back from the premise, you go back to the central office, and from the central office back through the transport part, you have to buy other elements, either your own self‑supplied, or from the incumbent.
LISTNUM 1 \l 14393 So, you could use GAS and part of your network, and that is why I just want to make sure we are clear on the terminology.
LISTNUM 1 \l 14394 MS SONG: Yes, and I think we are clear. I think we are both talking about the fact that the HSA and GAS service involves both an access and transport component.
LISTNUM 1 \l 14395 Moving on with my example, what I wanted to say is that prior to the negotiations, the Commission actually directed Bell to disclose costing information with respect to the ADSL service. It is my understanding that this costing information revealed that the prices that Bell Canada originally proposed to wholesale competitors for the ADSL service were at mark‑ups ranging from 100 to 600 per cent. Do you have any information that would contradict this?
LISTNUM 1 \l 14396 MR. IACONO: No. I do recall, though, those exchanges because I obviously had to read some of that prior to sitting down with industry to do the negotiations.
LISTNUM 1 \l 14397 We were able to conduct those negotiations without reference to cost studies; we filed the tariffs without reference to cost studies. There were issues, there were some organizations wanted to do this on a cost plus 15 per cent mark‑up basis, i.e. cat 1, category 1, and we filed it as a category 2 and it was approved as a category 2.
LISTNUM 1 \l 14398 MS SONG: Right, but in your normal bilateral negotiations without Commission intervention, that kind of relevant information as to your actual costs and the actual mark‑ups that you are incorporating into your negotiated proposals would not apply.
LISTNUM 1 \l 14399 MR. IACONO: Typically suppliers don't reveal their mark‑ups to their customers. You don't, your client doesn't when it is negotiating with its customers. I mean, that is just normal business practice.
LISTNUM 1 \l 14400 MR. BIBIC: Ms Song, did it take a long time? Yes. Did it get done? Yes. Is GAS/HSA an essential service? No. Even your client agreed, as the Commission pointed out in its orders approving these tariffs, that MTS supported the immediate adoption of Bell Canada's proposed tariff items.
LISTNUM 1 \l 14401 As far as GAS and HSA, MTS Allstream submitted that they should be classified as category 2 competitor services.
LISTNUM 1 \l 14402 MS SONG: Thank you.
LISTNUM 1 \l 14403 I would like to move off of your negotiate first proposal now, and discuss with you some of the terminology that we have been using in our discussions today.
LISTNUM 1 \l 14404 When we are talking about access, and this follows up on Mr. Bibic's intervention just now, we are talking about the component of the network that connects the customer's premises to a central office. Correct?
LISTNUM 1 \l 14405 MR. BIBIC: In our case, yes.
LISTNUM 1 \l 14406 MS SONG: The transport component involves the facility and services ancillary to the facility that connect to central office to other central offices. Is that correct?
LISTNUM 1 \l 14407 MR. BABIN: I would add, Ms Song, not necessarily the central office. It would be whatever the point of presence is for whichever carrier is taking that access. So, it is a point of presence, transport between points of presences or COs or central offices would be considered transport.
LISTNUM 1 \l 14408 MS SONG: Right. In the case of your own networks, you have not only access to each and every, let's say, commercial building in your operating territories, but also between central offices, points of presence in a fairly dense configuration. Correct?
LISTNUM 1 \l 14409 MR. BABIN: I would just clarify the access. When you say in the incumbent territory, it is generally copper access or low density loop access. We don't have fibre to every commercial building in our operating territory and that is something we would build on a case‑by‑case basis, as any competitor would do.
LISTNUM 1 \l 14410 MS SONG: I am glad you bring up fibre.
LISTNUM 1 \l 14411 So, of course you would not build a fibre access facility to the 7‑Eleven in a small town in Ontario. Correct?
LISTNUM 1 \l 14412 MR. BABIN: Likely not.
LISTNUM 1 \l 14413 MS SONG: And that is why you don't have fibre to every building that in your operating territory. Correct?
LISTNUM 1 \l 14414 MR. BABIN: Correct.
LISTNUM 1 \l 14415 MS SONG: But if there is sufficient potential revenue and customers in a building, such as a building in downtown Ottawa, you would surely provision that with a fibre facility. Correct?
LISTNUM 1 \l 14416 MR. BABIN: Correct, and I think that the discussion isn't whether you lease facilities or build. It is whether you can recover, as you said, enough revenue to recover the costs of building that facility or that lateral connection.
LISTNUM 1 \l 14417 As we talked about yesterday, there are other carriers that have facilities running in front of buildings, and we have done some analysis, and we have shown on the record that there are ways of recovering costs, depending on the services you provide to those customers.
LISTNUM 1 \l 14418 MS SONG: I do want to discuss with you how you decide whether you are going to provision a building with copper or fibre, but I just wanted to talk a little bit about the architecture at this point, but thank you, Mr. Babin.
LISTNUM 1 \l 14419 It is also my understanding that there is a link component that is required to connect the access facility or component to the transport facility or component, correct, when it comes to services like CDN, I am not sure for Ethernet and perhaps DSL. Correct?
LISTNUM 1 \l 14420 MR. BABIN: That is correct, connects links in our central office would connect the access to the competitor's co‑location.
LISTNUM 1 \l 14421 MS SONG: Now I would like to understand, using some specific examples, when Bell Canada, in its operating territory ‑‑ sorry, Bell Canada, Bell Aliant, SaskTel and Télébec would provision specific types of access and transport facilities, because I do think that it is important to bring out that you don't have fibre to every building and that there is a reason for that. So, I would like to understand what that reason is.
LISTNUM 1 \l 14422 We will do that using specific examples.
LISTNUM 1 \l 14423 Let's say you have the bank customer, and you are familiar with that because you have many bank customers. Correct?
LISTNUM 1 \l 14424 MR. IACONO: Yes, we do.
LISTNUM 1 \l 14425 MS SONG: I spoke about the example of the 7‑Eleven, but let's take the branch office, say a branch office in ‑‑
LISTNUM 1 \l 14426 THE CHAIRPERSON: Indian Head.
LISTNUM 1 \l 14427 MS SONG: Indian Head. Well, the only problem with that example, of course, is that it is not in any of their operating territories.
LISTNUM 1 \l 14428 MR. BIBIC: SaskTel is part of this panel.
LISTNUM 1 \l 14429 MS SONG: Excuse me. All right, then, we will take Indian Head.
LISTNUM 1 \l 14430 I don't think any of the major chartered banks are actually headquartered in Indian Head. I think that is fair to say. But, of course, the major chartered banks are all located in Bell Canada's ‑‑ headquartered in Bell Canada's operating territory, I believe, even the Bank of Nova Scotia. Correct?
LISTNUM 1 \l 14431 MR. IACONO: That is correct.
LISTNUM 1 \l 14432 MS SONG: So, I would like to stick to an Ontario example, being a central Canadian myself.
LISTNUM 1 \l 14433 Let's say you have a branch of the bank in Perth, Ontario. Would you provision or would that kind of a building, stand‑alone branch office in Perth, Ontario, be provisioned using a fibre facility?
LISTNUM 1 \l 14434 MR. BABIN: That would depend on the services you are selling to that customer, obviously. As I said, it is about recovering enough revenues from that customer. If it is hi‑speed, if it is, you know, hi‑speed data services and hi‑speed access to the internet, perhaps it might make sense to construct a lateral fibre connection to that building if there is fibre passing in front of the building.
LISTNUM 1 \l 14435 It would all depend on the services you could sell to that customer.
LISTNUM 1 \l 14436 MS SONG: And what kind of services would you have to reasonably be capable of serving to that little branch office in Perth, Ontario, in order to decide to provision that with fibre facilities?
LISTNUM 1 \l 14437 MR. BABIN: Well, hi‑speed services, obviously. So, DS‑1, DS‑3 services, which are the time division multiplex type services, TDM legacy type services or Ethernet, Ethernet 10 meg, 100 meg or 1 gig. It would be the higher band width services.
LISTNUM 1 \l 14438 Certainly not for one voice line, but for hi‑speed services, definitely.
LISTNUM 1 \l 14439 MR. IACONO: Ms Song, typically for those types of situations, DSL services more than sufficiently serve the needs of the branch. Other IP‑VPN access services, et cetera, you know, an IP Centrex, an IP key system, an IP PBX interconnected with PSTN connectivity linking back to head office.
LISTNUM 1 \l 14440 So, there is a variety of ways of providing branch office locations. In fact, that is how the solutions are actually designed, be they for in territory operations or be they out of territory where we are, say, operating in Edmonton or Alberta generally or Saskatchewan. So, we will provision services through third parties where it makes sense to do it through third parties or, in some cases, we will provision using our own network.
LISTNUM 1 \l 14441 So, there is a variety of ways of provisioning and meeting the requirements of the branch locations of a large company.
LISTNUM 1 \l 14442 MS SONG: It all hinges on the requirements of the customer and primarily, I am hearing, their data needs. Correct?
LISTNUM 1 \l 14443 MR. IACONO: Well, data and voice, because typically they are integrated systems. MST Allstream or Rogers, to the extent that Rogers provisions customers of that type, face the same solution possibilities and solutions‑based dimensions.
LISTNUM 1 \l 14444 You provision, or design a solution based on what the customer's needs ultimately are. So, typically they have voice and they have data, and they integrate.
LISTNUM 1 \l 14445 MS SONG: Right. But if you have your Perth, Ontario branch, and the Perth, Ontario branch has ten employees and the ten employees need a phone line with dial tone and they need to access their e‑mails, I am hearing that you might probably provision that with DSL, copper‑based DSL rather than a fibre facility.
LISTNUM 1 \l 14446 MR. IACONO: DSL or DSL alternatives, yes.
LISTNUM 1 \l 14447 MR. BABIN: I would also add that I think your initial assumption was this was a branch network. Several locations. So, you would have to look at it as an entire deal. You may provision based on future needs as well.
LISTNUM 1 \l 14448 I think Mr. Iacono is correct. Probably a DSL‑type service would suffice, but it depends on the future needs and it depends on all of the locations as part of a total deal.
LISTNUM 1 \l 14449 MS SONG: Currently would you be provisioning that branch office in certain cases with CDN as opposed to DSL where you are dealing with lower capacity needs?
LISTNUM 1 \l 14450 MR. BIBIC: CDN we would use potentially out of territory, but in territory you are referring to ‑‑
LISTNUM 1 \l 14451 MS SONG: I am talking about your in territory now. So, in territory, would you typically be providing the Perth office with CDN as opposed to DSL where you have lower capacity, lower data band width needs?
LISTNUM 1 \l 14452 MR. IACONO: CDN doesn't apply to retail customers. It applies to wholesale customers in terms of the tariff and the rating structure.
LISTNUM 1 \l 14453 Equivalent services would typically be used.
LISTNUM 1 \l 14454 MS SONG: Right. I am talking about using a dedicated digital network access line as opposed to a DSL which is a packetized network access line ‑‑
LISTNUM 1 \l 14455 MR. IACONO: Again, it depends on the specific needs of the customer. So, it can vary from one customer to the next, and it can vary, in fact, for any given customer from one location to the next, depending on what they need to do from those locations.
LISTNUM 1 \l 14456 MS SONG: But typically in your in territory operation. I am not talking, Mr. Iacono ‑‑ I know you have responsibilities over the entire country for enterprise customers, but in territory, when you are deciding how to provision a specific customer location with lower capacity data and voice needs, you would typically be provisioning that using DSL as opposed to digital network access facilities. Correct?
LISTNUM 1 \l 14457 MR. IACONO: As I said typically means typically, yes, but in some cases it could be something else. It depends on the customer's requirements.
LISTNUM 1 \l 14458 In fact, I can think of some situations where they don't need internet connectivity or IP connectivity and a basic business line will do in a particular location for that particular customer. Can you generalize from that? No. It varies one customer to the next.
LISTNUM 1 \l 14459 MS SONG: Let's move to downtown Ottawa, then. This downtown Ottawa of the bank has many more employees, perhaps 50, 60, 70 employees, and in addition to providing retail banking services, the bank provides business banking services, there are financial advisory services. There is a full suite of services being offered to the bank's own customers at this downtown Ottawa location.
LISTNUM 1 \l 14460 It is reasonable to assume, I believe, and you will correct me if I am wrong in my assumption, that at this particular location the customer's needs would be different in terms of band width than your Perth location for the same customer. Correct?
LISTNUM 1 \l 14461 MR. IACONO: Yes, I think that would be a safe assumption, yes.
LISTNUM 1 \l 14462 MS SONG: For that kind of a location, customer location, how would you be provisioning that in territory?
LISTNUM 1 \l 14463 MR. IACONO: Again, you would use the appropriate facilities in terms of services, be they DS‑3 based or otherwise. I will ask Mr. Babin to give you the technical side of this because I am not a technician, unfortunately, but, again, it depends on the band width requirements, number of users, scaleability requirements, growth requirements of the customer. So, you would provision with the higher capacity services and features.
LISTNUM 1 \l 14464 MS SONG: So, higher capacity, either DSL, CDN or Ethernet in territory?
LISTNUM 1 \l 14465 MR. IACONO: Well, not CDN because CDN doesn't apply to retail, but the network equivalent of CDN, which is DNA, et cetera, but at a much higher price.
LISTNUM 1 \l 14466 MS SONG: All right.
LISTNUM 1 \l 14467 And then let's move to downtown Montreal or downtown Toronto where the headquarters of this bank are located and there you have perhaps thousands of employees, there are intense requirements for data transmission because of the amount of financial and other information, perhaps there are even trading desks at this downtown location.
LISTNUM 1 \l 14468 How would you typically provision that kind of a customer location?
LISTNUM 1 \l 14469 MR. IACONO: I will use the term "big pipes" but I will ask Mr. Babin to explain.
LISTNUM 1 \l 14470 MR. BABIN: Well, it would be likely fiber. In many cases these customers are also looking for redundancy, and so they may go to another carrier and get a separate fiber into their location so they have a redundant network in the case of fiber failure, fiber cuts, which happen quite often. The customer remains in service.
LISTNUM 1 \l 14471 So likely fiber with high capacity bandwidth on that fiber.
LISTNUM 1 \l 14472 MS SONG: All right.
LISTNUM 1 \l 14473 And just to stay on the technical side, perhaps you can help me understand.
LISTNUM 1 \l 14474 My understanding is that when you are talking about fiber, use of fiber transmission facilities, that translates into what we call Ethernet services and that those services come at very hi‑speeds, 10 megabits per second, 100 megabits per second, or gigi or 1000 megabits per second; correct?
LISTNUM 1 \l 14475 MR. BABIN: Not necessarily, Ms Song. I mean fiber, you can use the traditional TDM services on fiber as well ‑‑
LISTNUM 1 \l 14476 MS SONG: Mm‑hmm.
LISTNUM 1 \l 14477 MR. BABIN: ‑‑ SONET‑type facilities, not necessarily Ethernet.
LISTNUM 1 \l 14478 MS SONG: Okay.
LISTNUM 1 \l 14479 MR. BABIN: Certainly, from my experience in having been, again, on the other side, building to customer locations fiber facilities, we have done that. We used to do that prior to the CDN decision in 2005.
LISTNUM 1 \l 14480 Today, with CDN, as we talked about yesterday, many out‑of‑territory incumbents now use CDN services. There is no incentive to build.
LISTNUM 1 \l 14481 MS SONG: Okay. So your comments just now had to do with competitors, correct, not your in‑territory ILEC operations?
LISTNUM 1 \l 14482 MR. BABIN: Correct, out‑of‑territory ILEC operations.
LISTNUM 1 \l 14483 MS SONG: And your responsibilities are what in the company, sorry?
LISTNUM 1 \l 14484 MR. BABIN: At Bell Canada I run all the operations for Bell Canada. I also run field services for Ontario and Quebec.
LISTNUM 1 \l 14485 MS SONG: All right, so in territory.
LISTNUM 1 \l 14486 MR. BABIN: And I have experience in out‑of‑territory as well.
LISTNUM 1 \l 14487 MS SONG: Okay. I was trying to focus on your in‑territory operations ‑‑
LISTNUM 1 \l 14488 MR. BABIN: Okay.
LISTNUM 1 \l 14489 MS SONG: ‑‑ but thank you for the clarification.
LISTNUM 1 \l 14490 MR. BABIN: You are welcome.
LISTNUM 1 \l 14491 MS SONG: However, I guess you indicated that you could run lower speed services on fiber facilities but the maximum speeds achievable on Ethernet ‑‑ sorry, fiber facilities running Ethernet are, as I said, 10 megabits, 100 megabits per second, 1000 megabits per second?
LISTNUM 1 \l 14492 MR. BABIN: No, you can actually run higher speeds with TDM technology as well.
LISTNUM 1 \l 14493 MS SONG: Mm‑hmm.
LISTNUM 1 \l 14494 MR. BABIN: There are rings across Canada. There are metropolitan fiber rings in Montreal, in Toronto, out west, that actually have equivalent speed facilities, equivalent to 1 gig Ethernet.
LISTNUM 1 \l 14495 MS SONG: So 1 gig Ethernet would be 1.5 ‑‑ sorry, 1000 megabits per second?
LISTNUM 1 \l 14496 MR. BABIN: Yes. You have got OC, the optical network, OC‑48, so C‑192s ‑‑ I don't want to get too technical here, Ms Song, but you can actually provide TDM‑type facilities outside of ‑‑ it doesn't have to be Ethernet, I guess is my point.
LISTNUM 1 \l 14497 MS SONG: Right. But the DS‑0/DS‑1 run at 56 kilobits per second and DS‑1 facilities run at 1.54 megabits per second ‑‑
LISTNUM 1 \l 14498 MR. BABIN: That is correct.
LISTNUM 1 \l 14499 MS SONG: ‑‑ which are lower speeds than the ‑‑
LISTNUM 1 \l 14500 MR. BABIN: Right.
LISTNUM 1 \l 14501 MS SONG: ‑‑ lower Ethernet?
LISTNUM 1 \l 14502 MR. BABIN: That is correct.
LISTNUM 1 \l 14503 MS SONG: Okay. All right.
LISTNUM 1 \l 14504 Now, I would like to talk about what distinguishes Ethernet from DSL from a customer experience perspective if you are able to explain that to me and to the Commission panel.
LISTNUM 1 \l 14505 MR. BABIN: It depends on the services that are riding over those facilities.
LISTNUM 1 \l 14506 DSL is a technology that runs over a copper facility at speeds up to ‑‑ in today's environment you can get up to 15 or 20 megabits per second.
LISTNUM 1 \l 14507 Ethernet is a packet‑switch network technology. It is also a protocol and you can get equivalent services over that facility, and depending on how it is designed and how it is architected, there are different experience levels, and depending on the applications that you are running, different experience levels using that facility.
LISTNUM 1 \l 14508 MS SONG: Right. But my understanding is that DSL, for example, is asynchronous, which means that the maximum speeds ‑‑ sorry.
LISTNUM 1 \l 14509 ADSL is asynchronous, which means that the maximum speeds to download information to the user is much higher typically than the maximum speeds at which the user, the end‑use customer, can upload information?
LISTNUM 1 \l 14510 MR. BABIN: Yes. You had started your question with DSL, not ADSL, but there are symmetrical DSL services as well that have the same speed upstream and downstream. So it depends on the experience.
LISTNUM 1 \l 14511 In many cases when you are just using the internet to download information, you actually don't need upstream capability.
LISTNUM 1 \l 14512 If it is synchronous‑type applications like Tele‑Education, you would usually use symmetrical services like SDSL.
LISTNUM 1 \l 14513 MS SONG: Right. And that all depends on the customer's needs, for example. So for the branch office ADSL may be fine but when you move to the downtown Toronto office, I am assuming you are not provisioning that whole office with its 1,000 employees using DSL facilities necessarily?
LISTNUM 1 \l 14514 MR. BABIN: Well, we have many large clients that use DSL as an access to our Virtual Private Network and I know Allstream does the same.
LISTNUM 1 \l 14515 It depends on the needs of the customer and it depends on how many users. It depends on the bandwidth required by the applications. There are many factors that affect a decision of what facility you are going to use on the customer's premises.
LISTNUM 1 \l 14516 MS SONG: Right, but I was actually talking about the downtown Toronto location.
LISTNUM 1 \l 14517 MR. BABIN: Again, it would depend. There are downtown locations that we would provision using DSL as an access into our IP VPN, for example, network.
LISTNUM 1 \l 14518 MS SONG: Yes. I am trying to ask you to stay with the example, which was of the headquarters of the bank office. I am not talking about any old downtown branch location.
LISTNUM 1 \l 14519 MR. BABIN: That was in downtown Montreal you had mentioned, I think, not Toronto. Is that the example you are talking about?
LISTNUM 1 \l 14520 MS SONG: No, I think I was talking Toronto actually.
LISTNUM 1 \l 14521 MR. BABIN: Okay.
LISTNUM 1 \l 14522 MS SONG: But I don't think it much matters except that I am not sure that there are any major chartered banks with headquarters in Montreal anymore.
LISTNUM 1 \l 14523 So I am asking about that particular example of the headquarters of a bank that has many thousands of employees. Would you be provisioning all the users in that location, in that kind of a customer location, using DSL facilities?
LISTNUM 1 \l 14524 MR. BABIN: Likely not. You would probably use fiber, as I said earlier.
LISTNUM 1 \l 14525 MS SONG: Thank you. Okay.
LISTNUM 1 \l 14526 And what other limitations are there to an ADSL service as compared to an Ethernet service?
LISTNUM 1 \l 14527 MR. BABIN: I am not sure I understand the question. Limitations with respect to what?
LISTNUM 1 \l 14528 MS SONG: What are the technical differences that distinguish ADSL from Ethernet?
LISTNUM 1 \l 14529 MR. BABIN: They are very different protocols.
LISTNUM 1 \l 14530 MS SONG: Yes, they are very different protocols. DSL is much slower typically, correct?
LISTNUM 1 \l 14531 MR. BABIN: It would depend on which DSL you are using.
LISTNUM 1 \l 14532 MS SONG: Right. So the highest speed DSL is much slower than the highest speed Ethernet service, correct?
LISTNUM 1 \l 14533 MR. BABIN: That would be correct, yes.
LISTNUM 1 \l 14534 MS SONG: Right. And my understanding is that with DSL there are also latency or delay problems due to the fact that typically it is a much slower service than the hi‑speed Ethernet services, correct?
LISTNUM 1 \l 14535 MR. BABIN: That would not necessarily be the case. It would depend on the network configuration, the network architecture. There are dedicated DSL services where you can have speeds, guaranteed speeds above a certain level.
LISTNUM 1 \l 14536 MS SONG: Right. And my understanding is that DSL is also distance sensitive, correct?
LISTNUM 1 \l 14537 MR. BABIN: That is correct.
LISTNUM 1 \l 14538 MS SONG: Right. And what distinguishes Ethernet from a DNA or a CDN DS‑0 or DS‑1 service from a customer experience perspective?
LISTNUM 1 \l 14539 MR. BABIN: Well, CDN is an access facility, so that is just competitive digital network access. So it is a loop. CDN is a loop. It is like an unbundled loop, effectively, that can be used for higher speeds. CDN is dedicated. If it is a CDN DS‑1, which is a 1.5 meg service, or a DS‑3, it is a dedicated facility.
LISTNUM 1 \l 14540 MS SONG: Right. So I think you were talking about the technical difference between DNA or CDN and Ethernet.
LISTNUM 1 \l 14541 So you are talking there about the fact that Ethernet is a packetized protocol whereas DNA actually creates a virtual ‑‑ sorry, not a virtual, a dedicated channel in whatever physical facility you are running the DNA service over; correct?
LISTNUM 1 \l 14542 MR. BABIN: You said DNA. I think you meant CDN. The CDN facility is dedicated, yes.
LISTNUM 1 \l 14543 MS SONG: Okay.
LISTNUM 1 \l 14544 MR. BABIN: But you can run Ethernet over that as well.
LISTNUM 1 \l 14545 MS SONG: Right.
LISTNUM 1 \l 14546 My understanding is that Ethernet technology is a more efficient technology from a technical or technological perspective, because it allows carriers to fully utilize the capacity on that facility, rather than creating dedicated channels, which, when not in use, are not in use, but cannot be used for other applications or other uses. Correct?
LISTNUM 1 \l 14547 MR. BABIN: The CDN is a dedicated facility, so if your bandwidth requirements are less than what your equipment is on the CDN facility, then, yes, you are not using the facility all the time.
LISTNUM 1 \l 14548 MS SONG: All right. Thank you very much, Mr. Babin, for helping me through this section.
LISTNUM 1 \l 14549 I would like to move on to another area.
LISTNUM 1 \l 14550 Your companies have stated on the record of this proceeding, I believe, that most of the fibre facilities used to support next generation services were constructed by your companies in the last 10 years. Correct?
LISTNUM 1 \l 14551 MR. BIBIC: Do you have a reference in our evidence?
LISTNUM 1 \l 14552 It's quite possible, but I can't remember.
LISTNUM 1 \l 14553 MS SONG: You cannot remember that. Okay.
LISTNUM 1 \l 14554 MR. BIBIC: It is the last 10 years bit that ‑‑
LISTNUM 1 \l 14555 Did we say that in our evidence?
LISTNUM 1 \l 14556 MS SONG: Do you think it could be longer than that?
LISTNUM 1 \l 14557 MR. BIBIC: I don't know. You suggested that we said it in our evidence, but I just can't remember.
LISTNUM 1 \l 14558 MS SONG: How about turning up Appendix 6, paragraph 76 of your March 15th evidence.
‑‑‑ Pause
LISTNUM 1 \l 14559 MS SONG: Do you see that?
LISTNUM 1 \l 14560 MR. BIBIC: We see that.
LISTNUM 1 \l 14561 MS SONG: You are with me, Mr. Bibic?
LISTNUM 1 \l 14562 MR. BIBIC: I have the paragraph.
LISTNUM 1 \l 14563 MS SONG: You are aware that MTS Allstream has stated in its evidence ‑‑ and I don't think I need to take you through it, but the reference is MTS Allstream‑CRTC‑12 April 07‑203 ‑‑ that the establishment of fibre networks to provide next generation services such as Ethernet has taken place over a much longer period than 10 years. Correct?
LISTNUM 1 \l 14564 Are you aware of that in our company's evidence?
LISTNUM 1 \l 14565 MR. BIBIC: I am not aware of that in your company's evidence.
LISTNUM 1 \l 14566 MS SONG: Then I would ask you to turn up that interrogatory.
LISTNUM 1 \l 14567 It is MTS‑A‑CRTC ‑‑
LISTNUM 1 \l 14568 MR. HOFLEY: Mr. Chairman, is there an exhibit number for this?
LISTNUM 1 \l 14569 THE CHAIRPERSON: Madam Secretary, are you going to distribute something?
LISTNUM 1 \l 14570 THE SECRETARY: It is on the pre‑filed record, right?
LISTNUM 1 \l 14571 MS SONG: Yes, I believe so.
LISTNUM 1 \l 14572 THE SECRETARY: Could you repeat the question number?
LISTNUM 1 \l 14573 MS SONG: MTS Allstream‑CRTC‑12 April 07, No. 203.
‑‑‑ Pause
LISTNUM 1 \l 14574 THE SECRETARY: We don't have that, I'm sorry.
LISTNUM 1 \l 14575 MS SONG: I apologize.
LISTNUM 1 \l 14576 THE CHAIRPERSON: Ms Song, what turns on the 10 years that you are trying to establish?
LISTNUM 1 \l 14577 MS SONG: Pardon me, Mr. Chairman?
LISTNUM 1 \l 14578 THE CHAIRPERSON: What turns on whether it is 10 years or 12 years since these facilities have been established?
LISTNUM 1 \l 14579 MS SONG: What am I trying to establish?
LISTNUM 1 \l 14580 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 14581 MS SONG: I am trying to establish that these networks were actually constructed over a period of almost 20 years, rather than 10 years.
LISTNUM 1 \l 14582 MR. BABIN: Maybe I could add, Mr. Chairman, that the last 10 years is when we have started to deploy fibre closer to the customer.
LISTNUM 1 \l 14583 If you understand the network, there is the feeder network portion, which is coming from the central office and going out to a business park or a subdivision, and then there is the distribution network beyond that.
LISTNUM 1 \l 14584 Twenty years ago we were deploying fibre, but it was really just to concentrate copper loops and bring it back into the central office on fibre, it wasn't to provide next gen services.
LISTNUM 1 \l 14585 Over the last 10 years the technology is now available to provide higher speeds, next gen‑type services closer to the customer.
LISTNUM 1 \l 14586 MS SONG: Right.
LISTNUM 1 \l 14587 MR. BABIN: That's why the reference is to 10 years, because prior to that the fibre was really deployed for interoffice trunking or transport, not out