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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 12, 2007 Le 12 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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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 12, 2007 Le 12 octobre 2007
- iv -
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
RESUMED: SALVATORE IACONO 936 / 6408
RESUMED: WILLIAM TAYLOR
RESUMED: PAUL ANDERSON
RESUMED: DENIS HENRY
RESUMED: MIRKO BIBIC
RESUMED: SERGE BABIN
RESUMED: MARGARET SANDERSON
RESUMED: PETER WATERS
Cross-examination by Primus (Cont'd) 936 / 6411
Cross-examination by Cybersurf 1006 / 6922
Cross-examination by Xittel 1060 / 7341
AFFIRMED: DALE HATFIELD 1109 / 7721
AFFIRMED: IAN PATTINSON
AFFIRMED: DAVID WATT
AFFIRMED: SUZANNE BLACKWELL
AFFIRMED: ROGER WARE
Examination-in-chief by Rogers 1109 / 7726
Cross-examination by The Competition Bureau 1111 / 7740
Cross-examination by The Companies 1171 / 8137
- v -
EXHIBITS / PIÈCES JUSTIFICATIVES
No. PAGE / PARA
PRIMUS-4 Bell Tariff CRTC 75-16 985 / 6750
XITTEL-1 Bell Canada document dated 1067 / 7388
July 5, 2007
XITTEL-1 Bell Canada document dated 1067 / 7389
October 18, 2007
BUREAU-2 Rogers' submissions in TPRP 1160 / 8076
proceeding
COMPANIES-2 Excerpt of FCC Decision 1188 / 8260
COMPANIES-3 Appendix "J", FCC Decision, 1221 / 8522
Order on Remand, adopted
December 15, 2004
COMPANIES-4 Appendix "L", Telecom Decision 1221 / 8522
CRTC 2007-35
Gatineau, Quebec / Gatineau (Québec)
‑‑‑ Upon resuming on Friday, October 12, 2007
at 0832 / L'audience reprend le vendredi
12 octobre 2007 à 0832
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 64086408 THE CHAIRPERSON: Good morning.
LISTNUM 1 \l 16409 Mr. Ruby, you will then first try to pick up where you left off yesterday.
LISTNUM 1 \l 16410 MR. RUBY: Thank you, Mr. Chairman.
EXAMINATION (CONT'D) / INTERROGATOIRE (SUITE)
LISTNUM 1 \l 16411 MR. RUBY: Panel, you will recall that where we left off yesterday we were looking at page 56 of Bell's March 15 evidence, the first sentence of paragraph 110.
LISTNUM 1 \l 16412 We had been talking about the continuing availability of ILEC retail services on a resale basis is a factor that must be considered by the Commission and I think we adequately covered the ILECs' views of resale in the future.
LISTNUM 1 \l 16413 I take it, Mr. Bibic, that you would agree with me that another important factor in determining essentiality in the residential market is the availability of cable retail access services on a resale basis, so the flip side.
LISTNUM 1 \l 16414 You say we are going to do wholesale essentially. Will you agree with me that the cable companies also doing wholesale is an important factor in determining essentiality?
LISTNUM 1 \l 16415 MR. BIBIC: We say it is a factor that you would look at to determine the state of competition downstream. Remember, that is the first screen of our test.
LISTNUM 1 \l 16416 If the Commission determines that there is a significant market power downstream or is concerned, generally, without making a finding of significant market power such that it wishes to go to the other elements of the test, then we get into the but for now system, duplicability, and don't think that resale plays a role in those aspects, those prongs of our test.
LISTNUM 1 \l 16417 MR. RUBY: I am only asking because you say that your, that is the ILECs', provision of retail services, effectively a wholesale service, is a factor that this Commission should consider.
LISTNUM 1 \l 16418 I just want to know if you feel the same about the cable companies, that in order to make this work, they have to also provide wholesale services.
LISTNUM 1 \l 16419 MR. BIBIC: No. The fact that they do may make the upstream market competitive. It may also add to competition downstream. If a service is not essential, I don't think it is essential for the incumbents or from the incumbent's point of view or the cable point of view.
LISTNUM 1 \l 16420 MR. RUBY: I have to admit you have confused me then. Then why is it a factor at all?
LISTNUM 1 \l 16421 MR. BIBIC: I think we covered that yesterday, Mr. Ruby, and the day before.
LISTNUM 1 \l 16422 It is, again, the Indian head example. There are resale opportunities there for others to come in and compete in the downstream market. You can't ignore that fact is what we are saying. It is a factor.
LISTNUM 1 \l 16423 We are not linking it specifically to any specific element of our three‑part essential facilities definition but it exists and will continue to exist and it is therefore a factor that can't be ignored.
LISTNUM 1 \l 16424 MR. RUBY: Okay. But you think you can ignore the cable side of it?
LISTNUM 1 \l 16425 MR. BIBIC: I didn't say that. I said to the extent that cable is providing wholesale services or third parties can resale cable services ‑‑ and when I say cable, I mean services offered over a cable platform ‑‑ then obviously, that is a factor you look at ‑‑
LISTNUM 1 \l 16426 MR. RUBY: Okay.
LISTNUM 1 \l 16427 MR. BIBIC: ‑‑ and that may speak to more vigorous competition downstream ‑‑
LISTNUM 1 \l 16428 MR. RUBY: All right.
LISTNUM 1 \l 16429 MR. BIBIC: ‑‑ and even makes the point stronger that there are no essential facilities.
LISTNUM 1 \l 16430 MR. RUBY: All right, thank you.
LISTNUM 1 \l 16431 I can't remember if we handed out my compendium yesterday. I don't think we got to it, so perhaps ‑‑ these are all pre‑filed materials, Mr. Chairman.
‑‑‑ Pause
LISTNUM 1 \l 16432 MR. RUBY: If you can turn to Tab 12, please. This is Companies/Primus 12 April, number 7.
LISTNUM 1 \l 16433 THE CHAIRPERSON: Which tab are you on?
LISTNUM 1 \l 16434 MR. RUBY: Tab number 12, sir.
LISTNUM 1 \l 16435 THE CHAIRPERSON: Thank you.
‑‑‑ Pause
LISTNUM 1 \l 16436 MR. RUBY: All right, if everybody has it, I would like to focus on question (b) where Bell was asked to essentially provide in a way its opening position with respect to the services that are on the Category 1 or 2 lists and now according to Bell's test for essentiality it feels would not be, and the answer was:
"The Companies' opening position..." (As read)
LISTNUM 1 \l 16437 This is at (b) at the bottom:
"The Companies' opening position regarding prices for those services subject to negotiation has not been determined." (As read)
LISTNUM 1 \l 16438 And you go on to list a bunch of factors.
LISTNUM 1 \l 16439 Mr. Anderson, maybe I should put this to you since you are on the wholesale side, as I understand it.
LISTNUM 1 \l 16440 I gather what you are telling me is sitting here today you can't tell me, for example, what Bell will charge for a local loop in Ottawa, for example, to my client Globility that is a CLEC, if you get what you want and it is not listed as an essential service; is that right?
LISTNUM 1 \l 16441 MR. ANDERSON: First of all, good morning, Mr. Ruby.
LISTNUM 1 \l 16442 MR. RUBY: Good morning.
LISTNUM 1 \l 16443 MR. ANDERSON: Absolutely, as we discussed yesterday, our approach is to sit down, two parties sit down and negotiate an arrangement based on your requirements and move forward from there.
LISTNUM 1 \l 16444 MR. RUBY: Okay. I am just trying to get an idea of, frankly, how much to expect prices for something like an unbundled loop will go up if your handcuffs come off. I am just looking for some help with this.
LISTNUM 1 \l 16445 So for example, you know how many unbundled local loops Globility has in Ottawa, right? So you know the volume they consume at the moment, right?
LISTNUM 1 \l 16446 MR. ANDERSON: I don't know personally but that is easy to find out.
LISTNUM 1 \l 16447 MR. RUBY: But Bell would know?
LISTNUM 1 \l 16448 MR. ANDERSON: Absolutely.
LISTNUM 1 \l 16449 MR. RUBY: Right. And you know their payment history, right?
LISTNUM 1 \l 16450 MR. ANDERSON: Absolutely, we would know that.
LISTNUM 1 \l 16451 MR. RUBY: You know the relationship that you have with them, so you know all those sort of soft factors that go into making a deal, right?
LISTNUM 1 \l 16452 MR. ANDERSON: Sure.
LISTNUM 1 \l 16453 MR. RUBY: Okay. So can't you give me some guidance? Are you going to increase prices on unbundled local loops 10 percent, 100 percent, 200 percent? Can you give the Commission a feel for what the intention is here?
LISTNUM 1 \l 16454 MR. ANDERSON: Well, I think what you have to look at is that each customer situation is different.
LISTNUM 1 \l 16455 MR. RUBY: Okay.
LISTNUM 1 \l 16456 MR. ANDERSON: For example, with Globility/Primus we have ‑‑ obviously, we do a lot of business with you as a customer, an important customer. There are a number of different factors that we talk about every single day and depending on what you were looking for, depending on what your requirements were, depending on the broader scope of the business that we do with you, then that would dictate in terms of where we would land on a price.
LISTNUM 1 \l 16457 MR. RUBY: Okay.
LISTNUM 1 \l 16458 MR. ANDERSON: You know, would it go up, would it go down? I don't believe that we are in a position right now ‑‑ depending on the individual circumstances, I don't believe that we can articulate that at this point.
LISTNUM 1 \l 16459 MR. RUBY: That's why I'm asking you about this one company that you already deal with. So you would know all the factors that you just talked about.
LISTNUM 1 \l 16460 has this not been thought through, sort of where prices are going to go in the key unbundled local loop service?
LISTNUM 1 \l 16461 MR. ANDERSON: I think the other factor involved here is we have to have a full understanding of what your future business is. I can tell you exactly what we do today, no problem, but what I don't completely understand is perhaps where the future is going.
LISTNUM 1 \l 16462 MR. RUBY: All right.
LISTNUM 1 \l 16463 MR. ANDERSON: I know in fact Bell and Primus executives are meeting today to talk about a number of different items. We meet regularly.
LISTNUM 1 \l 16464 MR. RUBY: Right.
LISTNUM 1 \l 16465 MR. ANDERSON: So those are the kinds of dialogues, that is the kind of environment ‑‑ frankly, that is the kind of relationship that we want to try and foster so that we can work through these kinds of arrangements.
LISTNUM 1 \l 16466 MR. RUBY: All right. But sitting here today knowing what you know about the present ‑‑ I'm not asking you to speculate ‑‑ I gather from your answer that you just can't help the Commission today on this point.
LISTNUM 1 \l 16467 MR. ANDERSON: I'm being as helpful as I can. At this point we don't have clear‑cut prices on every single product.
LISTNUM 1 \l 16468 THE CHAIRPERSON: Just a second. You keep saying all the time that the present regime is a disincentive for you to invest, which presumably means either to build them for your own but also that on resale you don't get returns that you would expect.
LISTNUM 1 \l 16469 So presumably if the mandating terminates we can assume that prices will rise.
LISTNUM 1 \l 16470 MR. ANDERSON: I'm sorry, we can assume that prices will rise?
LISTNUM 1 \l 16471 THE CHAIRPERSON: Yes. If not, correct me. If it's right now a disincentive to invest even only partially because the returns that you are on from mandated services are not sufficient. So wouldn't it then follow the logical corollary that there at least will be some increases in prices? The size of the increase may be subject to individual negotiations.
LISTNUM 1 \l 16472 MR. IACONO: Mr. Chairman, if I may offer a comment to your question, I think it is a very, very good question.
LISTNUM 1 \l 16473 One of the things that we need to consider here is, for example, today the way the pricing is structured ‑‑ and this is a general comment not just in relation to unbundled loops, but the way pricing is structured, if you are a wholesale customer buying one loop you pay whatever the tariff price is. If you are buying 10,000 loops you are paying the same per unit price.
LISTNUM 1 \l 16474 An environment that we are looking towards it seems to me only sort of normal and natural that a market would allow for pricing based on volume differentials. So it is not inconceivable that for some very large buyers of unbundled local loops today, it is not inconceivable that the price might get more advantageous with certain other elements.
LISTNUM 1 \l 16475 You know, contract terms, today you buy a loop, there is no contract term, there is no volume discount, et cetera, et cetera. So it's really difficult to generalize, but I would think that the same kind of pricing principles would apply for those services going forward as the pricing is structured today for retail services volume and contract and term, and so on.
LISTNUM 1 \l 16476 MR. TAYLOR: If I could toss in on other idea, I think, Mr. Chairman, your suggestion goes to what the supply curve looks like. It will be unconstrained, but remember that the price that ends up here between Primus and Bell is determined by the intersection of the supply and demand curve and we don't know what Primus is willing to pay and how many loops they would buy at a given price. That is also going to come into effect in determining what the price is going to be.
LISTNUM 1 \l 16477 THE CHAIRPERSON: Back to you, Mr. Ruby.
LISTNUM 1 \l 16478 MR. RUBY: Thank you, Mr. Chairman.
LISTNUM 1 \l 16479 Just to follow up, Dr. Taylor, on something you said, Mr. Anderson, when you negotiate with a customer, Mr. Iacono, they don't tell you their plan. Right? The two sides never know what each other are thinking in these negotiations. Right?
LISTNUM 1 \l 16480 MR. ANDERSON: I think it's all a matter of detail. I think in any relationship where you are sitting down and negotiating arrangements, I think good practice is to ask as much as you can about what the customer direction is, where they are headed, what their plans are, to the extent that they can share. Because how else can you put together a recommendation or a solution or whatever the point of discussion is?
LISTNUM 1 \l 16481 MR. RUBY: I couldn't agree more, which is why I asked you just about your opening position, not the end of the negotiations, what the price list will say.
LISTNUM 1 \l 16482 But I have your answer I guess, as best as you can give the Commission.
LISTNUM 1 \l 16483 MR. IACONO: Mr. Ruby, there are two sides there. One is ‑‑ actually, let me just cut to the chase.
LISTNUM 1 \l 16484 There is more to a good deal than price alone, there are all types of other factors, there is service, there are service levels, and so on.
LISTNUM 1 \l 16485 So it's really hard to generalize in any broad way.
LISTNUM 1 \l 16486 MR. RUBY: I appreciate that. I don't want to debate this point with you. That is why I asked you today, knowing everything you know about Globility ‑‑ because you know all the facts that you are ever going to know in a negotiation ‑‑ and you can't give me an answer and I'm happy to move on.
LISTNUM 1 \l 16487 MR. IACONO: Again, I personally don't know the facts because I am not involved in carrier services, but your point is a broad one so I would like to address it.
LISTNUM 1 \l 16488 THE CHAIRPERSON: Mr. Iacono, if he wants to move on, it's his privilege.
LISTNUM 1 \l 16489 MR. IACONO: All right.
LISTNUM 1 \l 16490 THE CHAIRPERSON: He is asking the questions, so let's move on.
LISTNUM 1 \l 16491 MR. RUBY: Thank you, Mr. Chairman.
LISTNUM 1 \l 16492 Of course, while we are debating this my computer decided to turn itself off, so with your indulgence for a moment ...
‑‑‑ Pause
LISTNUM 1 \l 16493 MR. RUBY: I will give you a chance, Mr. Iacono, since you wanted to jump in here.
LISTNUM 1 \l 16494 Do you recall Mr. Hariton from the Bureau mentioning new residential construction? I think he called it Greenfields.
LISTNUM 1 \l 16495 Do you remember that from the first day of the hearing?
LISTNUM 1 \l 16496 MR. IACONO: Yes.
LISTNUM 1 \l 16497 MR. RUBY: All right. I would like to explore a little bit that Greenfields competition.
LISTNUM 1 \l 16498 First of all, just so we are all using the same term, Greenfields, is it fair to say, are things like new subdivisions where there are, well, no houses, never mind no competitors.
LISTNUM 1 \l 16499 Right?
LISTNUM 1 \l 16500 MR. IACONO: That's my understanding, yes.
LISTNUM 1 \l 16501 MR. RUBY: All right. Can you, please turn ‑‑ I will have to ask the Hearing Secretary, please, to hand out Rogers/Primus 12 April No. 14, please.
LISTNUM 1 \l 16502 MR. BIBIC: Mr. Ruby, is it in your compendium?
LISTNUM 1 \l 16503 MR. RUBY: It is not in the book. You will be glad to hear, Mr. Chairman, that I will probably not use most of the tabs in the book, that material has been covered by others before me, but I have a few additional things.
‑‑‑ Pause
LISTNUM 1 \l 16504 MR. RUBY: If I can focus on 14(c), please, about two‑thirds of the way down the page, the question was to describe new residential housing developments, and so on. It's the Greenfields question.
LISTNUM 1 \l 16505 The answer was:
"In general the developer/builder pre‑buys services from Rogers for a set period of time and then in turn offers the package of services that it has purchased from Rogers to a new home buyer as a free option for the set period of time." (As read)
LISTNUM 1 \l 16506 First of all, Mr. Iacono, are you the right person I should be asking questions about this?
LISTNUM 1 \l 16507 MR. IACONO: It depends on your question.
LISTNUM 1 \l 16508 MR. RUBY: All right. Dealing with Greenfields development and retail offerings and building new construction, is that a mix? I just want to make sure.
LISTNUM 1 \l 16509 MR. BIBIC: It would be a mix between Iacono and myself and maybe Mr. Babin.
LISTNUM 1 \l 16510 MR. RUBY: All right. Fair enough.
LISTNUM 1 \l 16511 So is the idea here that what happens sometimes with these Greenfields developments, the subdivisions, is that Rogers comes in ‑‑ just to pick one cable company ‑‑ and makes an offer to the developer or the builder to pre‑buy services from Rogers. So here is a package of high‑speed internet, video and telephone for a set period of time, maybe a year, and then the home builder takes that package, incorporates it into the price of a house and that goes to the ultimate homeowner.
LISTNUM 1 \l 16512 Is that the situation you face?
LISTNUM 1 \l 16513 MR. BIBIC: Without speaking to the specifics ‑‑ you can ask Rogers ‑‑ that is my general understanding.
LISTNUM 1 \l 16514 MR. RUBY: All right. Well, this is their answer, that's why I put it to you. So it's not ‑‑
LISTNUM 1 \l 16515 MR. BIBIC: And that was my general understanding before this answer and it is confirmed here.
LISTNUM 1 \l 16516 MR. RUBY: All right. Terrific.
LISTNUM 1 \l 16517 If you can then turn up, please ‑‑ again, Madam Secretary, if you could hand this out ‑‑ Bell Canada/Rogers 12 April 46.
LISTNUM 1 \l 16518 Rogers seemed to have tried to deal with the same subject with Bell Canada so let's see if we can put the two answers together.
‑‑‑ Pause
LISTNUM 1 \l 16519 MR. RUBY: You will see sort of at the (a) and (b) at the bottom of page 1 Bell Canada starts to say it performs the business case analysis, sort of the general answers we have been hearing a lot of.
LISTNUM 1 \l 16520 Then there is all kinds of information that, at least in the copy I have, has been redacted, all the key details.
LISTNUM 1 \l 16521 Then in the last sentence before part (c) ‑‑ this is on page 2 ‑‑ it says:
"In some cases, where the developer has signed an exclusive marketing arrangement with the service provider..."
‑‑ and that would be, just to pause there, Mr. Bibic, the prebuy type arrangement we just talked about or some other kind of exclusive marketing arrangement?
LISTNUM 1 \l 16522 MR. BIBIC: It could be a prebuy, not necessarily a prebuy.
LISTNUM 1 \l 16523 MR. RUBY: That's one of the types?
LISTNUM 1 \l 16524 MR. BIBIC: Yes.
LISTNUM 1 \l 16525 MR. RUBY: All right. So that where there's been an exclusive marketing arrangement with the service provider:
"...the penetration rates required to have a positive business case cannot be achieved, and, consequently, Bell has elected not to install its facilities to serve these subdivisions or buildings in circumstances where its obligation to serve, under the Bell Canada Act, is not applicable." (As read)
LISTNUM 1 \l 16526 Let's just deal very briefly with that last bit about the Bell Canada Act. I gather your
position is if you are further than, I think it's 66 or 67 metres from an existing line, you have no obligation to serve, right, something like that?
LISTNUM 1 \l 16527 MR. BIBIC: Yes, 62 or 65 metres.
LISTNUM 1 \l 16528 MR. RUBY: Okay, thank you. Whatever it is in the act, that's fine.
LISTNUM 1 \l 16529 So what we are to take from this is that, if Rogers makes a prebuy deal, as an example of an exclusive marketing arrangement with a developer, in that development there is not going to be two wires to the home, there's going to be just one, the Rogers' wire, right? You don't build.
LISTNUM 1 \l 16530 MR. BIBIC: In some cases.
LISTNUM 1 \l 16531 MR. RUBY: In some cases, okay.
LISTNUM 1 \l 16532 I'm just trying to figure out. That means that, from a wireline perspective, the duopoly actually becomes a monopoly again, right?
LISTNUM 1 \l 16533 MR. BIBIC: There will be one wire to the home.
LISTNUM 1 \l 16534 MR. RUBY: Right. Do you think it's fair to say that, if the economics of residential access are such that Bell won't build because of a competitor's marketing agreement, there's nobody else who's going to build another wire into a residential development?
LISTNUM 1 \l 16535 MR. BIBIC: Well, it depends on ‑‑ for now we won't build, but you never know how things go. Customers have ‑‑
LISTNUM 1 \l 16536 MR. RUBY: So you might build after the streets have been closed and the houses have gone up and...?
LISTNUM 1 \l 16537 MR. BIBIC: Or we might find a different way to get to the customer.
LISTNUM 1 \l 16538 MR. RUBY: Wireless.
LISTNUM 1 \l 16539 MR. BIBIC: The point is we make our business decision ‑‑
LISTNUM 1 \l 16540 MR. RUBY: Okay.
LISTNUM 1 \l 16541 MR. BIBIC: ‑‑ and, based on our business case, in some cases where we feel, because of these exclusive marketing arrangements, there's no point to lay down the wire right away doesn't mean that we are giving up on that area. We will find ways to compete. Basically, we don't have much of a choice.
LISTNUM 1 \l 16542 MR. TAYLOR: Mr. Ruby, think of it in two stages. There's competition for the residential centre at the beginning, and Bell and Rogers and whoever else competes to get the contract, and then when you are under the contract there is only one wire, I grant you, but customers in that subdivision are still protected in the sense that if Rogers, at the end of the contract, or whatever the deal is, says, "They have got one wire, I can raise price", no, because Bell can always come back in.
LISTNUM 1 \l 16543 I mean, Bell decides that at the current price it's not feasible to build a wire, but how about at a higher price. That's a different economic circumstance.
LISTNUM 1 \l 16544 MR. RUBY: All right, I understand. You are saying, despite the fact that your previous evidence was that rebuilding new facilities is hugely more expensive, I take it as. It's much more expensive to go in later than it is when construction, joint trenching is going on, all that good stuff, right?
LISTNUM 1 \l 16545 MR. TAYLOR: Oh, I agree. That's the cost side.
LISTNUM 1 \l 16546 MR. RUBY: All right.
LISTNUM 1 \l 16547 MR. TAYLOR: But the revenue side would be different if Rogers decided to exert significant market power.
LISTNUM 1 \l 16548 MR. RUBY: All right. Thank you, Dr. Taylor.
LISTNUM 1 \l 16549 MR. BIBIC: Mr. Ruby, I'm also advised that we do say "in some cases". In some cases we haven't, in many other cases we do build. And we do have a group that deals with developers, where we actively try to get the contract that ‑‑ in this situation, you have posited to us, Rogers has happened to earn the contract.
LISTNUM 1 \l 16550 MR. RUBY: Right. So sometimes you try to be the only one there, is that right?
LISTNUM 1 \l 16551 MR. BIBIC: No. Sometimes we just want access, so we try to negotiate access.
LISTNUM 1 \l 16552 MR. RUBY: Right. Do you try and get marketing arrangements with developers?
LISTNUM 1 \l 16553 MR. BIBIC: Nope.
LISTNUM 1 \l 16554 MR. RUBY: All right. It just seems like an awful fragile vision of competition, but let's move on.
LISTNUM 1 \l 16555 Let's change the subject a little bit and talk about traffic now moving from a central office to elsewhere in the network, okay? So we are not talking about residential access to the customer more, we are starting at the next step, central office back into the network. Are you with me?
LISTNUM 1 \l 16556 MR. BABIN: Who's? Our central office?
LISTNUM 1 \l 16557 MR. RUBY: Your central office.
LISTNUM 1 \l 16558 MR. BABIN: Okay.
LISTNUM 1 \l 16559 MR. RUBY: Okay?
LISTNUM 1 \l 16560 MR. BABIN: I'm with you.
LISTNUM 1 \l 16561 MR. RUBY: Now, I won't take you to it unless it's necessary, but I gather that Bell's position is that CLECs cannot aggregate traffic in a central office or traffic ‑‑
LISTNUM 1 \l 16562 MR. BABIN: My understanding is they can.
LISTNUM 1 \l 16563 MR. RUBY: Let me finish the question, then I'm happy to take your answer.
LISTNUM 1 \l 16564 That you can't aggregate traffic in a central office or coming out of a wire centre unless the CLEC meets the primary purpose rule. Right?
LISTNUM 1 \l 16565 MR. BABIN: That is correct.
LISTNUM 1 \l 16566 MR. RUBY: Just to make sure we are all on the same page, why don't you explain what the primary purpose rule is.
LISTNUM 1 \l 16567 MR. ANDERSON: So the primary purpose rule is, first of all, you need to be a collocator, in other words you have colloed in the central office, and so the traffic ‑‑ so the primary purpose of a collo is to connect to the local circuits, right, the loops or, if you are a DSL provider, the DSL. So once you have got that location, then you need to take that traffic somewhere else, typically back to a point of presence.
LISTNUM 1 \l 16568 So, really, there are three options. Number one, you can build your own fibre, which many of the collocators do; secondly, you can lease CDN from Bell Canada, which many do; or, alternatively, you can use another collocator that has fibre if you don't have fibre. So it's just using the other ‑‑ taking advantage of the other collocator.
LISTNUM 1 \l 16569 So what the primary purpose rule says is that, and I will try and make this as ‑‑ you might have trouble explaining it, but, basically, it says that most of the traffic ‑‑ and this is in the tariff ‑‑ most of the traffic has to be Bell originating. So, in other words, you can't just simply collocate them, move all your traffic out through another collocator. I think that's essentially it.
LISTNUM 1 \l 16570 MR. RUBY: So if we can take a minute and just explore some of the consequences of the physical idea that there's a collocator in a central office and this primary purpose rule that you have drawn our attention to, does that mean ‑‑ or I take it that it means that a third party, so somebody who built fibre but is not a collocator, cannot act as the conduit to take traffic from a CLEC out of a central office?
LISTNUM 1 \l 16571 MR. BIBIC: This was a rule that was ‑‑ it's in a tariff approved by the Commission and it stems from the view back in 1997‑15, in the collocation decision ‑‑
LISTNUM 1 \l 16572 MR. RUBY: Mr. Bibic, I'm sure the Commission's familiar with the rule. I want to know about the consequences of the rule in the real world.
LISTNUM 1 \l 16573 MR. BIBIC: Then, it's correct.
LISTNUM 1 \l 16574 MR. RUBY: Okay, thank you. See isn't that easy. Okay.
LISTNUM 1 \l 16575 So second, if you have got a collocator ‑‑ or two or three of them and they want to aggregate their traffic to try and get it out of your central office, the primary purpose rule could prevent that, right?
LISTNUM 1 \l 16576 MR. BIBIC: It might not.
LISTNUM 1 \l 16577 MR. RUBY: It might not, but let's say there are three collocators in an office, they each have an equal amount of traffic, they want to put their traffic together on a single line and send it out because that's more efficient, the primary purpose rule would prevent that from happening, right?
LISTNUM 1 \l 16578 MR. BIBIC: I think the primary purpose rule would state that the party who owns the fibre, at least 50 percent of the capacity travelling over that fibre must be traffic of the party who owns the fibre. So the other 49 percent, it could aggregate traffic from others.
LISTNUM 1 \l 16579 MR. RUBY: Okay. Well, let's try this again. I don't want to end up where Mr. Engelhart was with the numbers, but let me try and see if I can do this briefly.
LISTNUM 1 \l 16580 THE CHAIRPERSON: Before you do that, is the primary purpose rule part of these proceedings?
LISTNUM 1 \l 16581 MR. RUBY: Pardon me?
LISTNUM 1 \l 16582 THE CHAIRPERSON: Is the primary purpose rule part of these proceedings?
LISTNUM 1 \l 16583 MR. RUBY: The consequence of the primary purpose rule, sir, is that ‑‑
LISTNUM 1 \l 16584 THE CHAIRPERSON: Oh, I understand the consequence, you are just laying it out. I have just asked you very specific question. Is it part of these proceedings? I thought we were looking at mandated services.
LISTNUM 1 \l 16585 MR. RUBY: We are, sir. I am not questioning the primary purpose rule, but my submission will be, in final argument, that because of the primary purpose rule and the essentiality findings that Bell is proposing to you, we are going to have a massive number of circuits required to do what they say should be done. So we are going to end up with inefficient transitting network.
LISTNUM 1 \l 16586 THE CHAIRPERSON: You are saying if we adopt Bell's proposal, then, because of the primary purpose rule, it will result in inefficient traffic?
LISTNUM 1 \l 16587 MR. RUBY: That's one of the parts that will lead to that consequence.
LISTNUM 1 \l 16588 THE CHAIRPERSON: Okay, continue.
LISTNUM 1 \l 16589 MR. RUBY: Thank you, sir.
LISTNUM 1 \l 16590 So let's just keep this really simple. If you have CLEC A that has 33 units of traffic, CLEC B has 33 units of traffic and CLEC C has 33 units of traffic in an ILEC, or let us make it easier, a Bell central office, right ‑‑
LISTNUM 1 \l 16591 MR. BIBIC: Are they all co‑located?
LISTNUM 1 \l 16592 MR. RUBY: And they are all co‑located. We could not have one circuit coming out of your end office carrying all three of those co‑located CLECs full traffic, right? Because no one of them would be over 50 per cent, right?
LISTNUM 1 \l 16593 MR. BIBIC: That is correct. Some of that traffic could be aggregated and some couldn't. And the basic point is that purpose of co‑location wasn't to turn our central offices into carrier hotels, but there are options.
LISTNUM 1 \l 16594 MR. RUBY: Right, one of which is to get a circuit from Bell, right, at CDN?
LISTNUM 1 \l 16595 MR. BIBIC: Yes, at CDN rates today or build.
LISTNUM 1 \l 16596 MR. RUBY: Or build.
LISTNUM 1 \l 16597 MR. BIBIC: Or there might be CLEC D that would be willing to take that traffic.
LISTNUM 1 \l 16598 MR. RUBY: Right, right. So we have got to do a lot of building there to match‑up all of the exits from all of the COs?
LISTNUM 1 \l 16599 MR. BIBIC: No, it might already be there.
LISTNUM 1 \l 16600 MR. RUBY: Sorry?
LISTNUM 1 \l 16601 MR. BIBIC: There might be a fourth co‑locator there.
LISTNUM 1 \l 16602 MR. RUBY: There might be a fourth co‑locator there who couldn't aggregate the traffic either, right, because now you are down to 25 per cent shares?
LISTNUM 1 \l 16603 MR. BIBIC: No, it could, at least half of the traffic that it carries has to be its own, 49 per cent can be others.
LISTNUM 1 \l 16604 MR. RUBY: I see. If we have got one relatively large one it can carry some of other traffic, right?
LISTNUM 1 \l 16605 MR. BIBIC: As long as 51 per cent is its own traffic.
LISTNUM 1 \l 16606 MR. RUBY: All right, thank you. I understand your position.
LISTNUM 1 \l 16607 Can you turn up please, in my compendium, tab 9? And if I could take you to the second page. This is a question dealing with CDN and it is Companies Bureau, 12‑April No. 35.
LISTNUM 1 \l 16608 Now, you say in the first full ‑‑
LISTNUM 1 \l 16609 COMMISSIONER del VAL: Mr. Ruby, I am sorry, I didn't get the reference here, sorry.
LISTNUM 1 \l 16610 MR. RUBY: Oh sorry, pardon me. Well, first of all, tab 9 of my compendium, it is Companies Bureau, 12‑April‑07 No. 35, and page 2 please, the second paragraph that starts, "Furthermore."
"Further more, The Companies note that CDN service is a relatively insignificant input in the residential and business retail markets for toll services. Since CDN services are not available between metropolitan areas, even more telling is the fact that the Commission granted retail toll and internet forbearance before CDN services were even created. Thus, The Companies submit that the state of competition in the residential retail markets would not be impacted if CDN were no longer to be mandated." (As Read)
LISTNUM 1 \l 16611 Okay, let us take a minute and unpack this a bit, because you are talking about, in one paragraph, toll and local and internet. So let us start with toll if we can.
LISTNUM 1 \l 16612 First of all, I think we can all agree that CDN is not available between metropolitan areas, right, that is the key to toll, is between metro areas, right? And that is what it says, I am just trying this as a starting point.
LISTNUM 1 \l 16613 MR. BIBIC: Yes.
LISTNUM 1 \l 16614 MR. RUBY: Okay. But the CDN circuits that bring the traffic to the point where it is then sent out of a metropolitan area or I should say those circuits, those could be CDN, right?
LISTNUM 1 \l 16615 MR. BIBIC: Would you repeat that?
LISTNUM 1 \l 16616 MR. RUBY: Okay, let me try that again.
LISTNUM 1 \l 16617 Before you send traffic between Toronto and Ottawa you bring it to a central point and then you send it long haul, right, that is the way it works?
LISTNUM 1 \l 16618 MR. BIBIC: Yes.
LISTNUM 1 \l 16619 MR. RUBY: Okay. The circuits that bring it to a central point in Ottawa, for example, those can be CDN circuits, right, it is the long haul inter‑city stuff that is not CDN, right?
LISTNUM 1 \l 16620 MR. BIBIC: Yes.
LISTNUM 1 \l 16621 MR. RUBY: Okay. And also, CDN allow CLECs to move traffic between your central office and a CLEC POP or switch, right?
LISTNUM 1 \l 16622 MR. BIBIC: Yes.
LISTNUM 1 \l 16623 MR. RUBY: And you need one circuit to do that for each central office, usually a DS‑3 or an OC‑3, right?
LISTNUM 1 \l 16624 MR. BIBIC: Yes.
LISTNUM 1 \l 16625 MR. RUBY: Okay. So isn't this sort of an example of the steppingstone theory possibility, that once a CLEC accumulates sufficient traffic on these pieces coming out of the CO sufficient traffic and revenue gets amassed to justify a new facility, that is when the CLEC, the new entrant, can build the new facility and enjoy the benefits of increased control that you have talked about is important in having your own facilities. It is the way it works, isn't it?
LISTNUM 1 \l 16626 MR. BIBIC: It depends if the pricing of the CDN service is such that it provides an incentive to you to build even after you have amassed that traffic you are suggesting in your question.
LISTNUM 1 \l 16627 MR. RUBY: I understand. But the ability to do it, as opposed to the motivation, is that you can do it when enough traffic is available to come into that line to make it worth building, right? That is how you described how you work. You would expect at the residential transiting level it would work exactly the same way, right?
LISTNUM 1 \l 16628 MR. BIBIC: Well, one would look at whether or not there is enough traffic to justify the build or look at other options. There might be another supplier out there that is willing to give you an attractive price. Ultimately, those decisions are affected by the regulated prices of similar services from the incumbent.
LISTNUM 1 \l 16629 MR. RUBY: And I think you told us yesterday that building your own facilities from a controlled perspective is a good thing, it is what the companies generally want, right?
LISTNUM 1 \l 16630 MR. BIBIC: In the medium to long‑term, yes, that was my answer to the Chair's question, right.
LISTNUM 1 \l 16631 MR. RUBY: Then you would expect it would be the same for PRIMUS or Globility or anybody else who is in that space, right?
LISTNUM 1 \l 16632 MR. BIBIC: Right, and that is the way the market would work if it weren't otherwise distorted.
LISTNUM 1 \l 16633 MR. RUBY: All right. Let us talk about transition for a moment please. If you can again go back to my compendium. No, sorry, pardon me.
‑‑‑ Pause
LISTNUM 1 \l 16634 MR. RUBY: Pardon me, it is the compendium, tab 14 please. Companies CRTC, 12‑April No. 401. And I am going to ask you to look at both 401 and 403, which are under the same tab. They refer back and forth to each other, so we will take them together.
LISTNUM 1 \l 16635 And the Commission asked about Cogeco had proposed some objectives for transition and The Companies' answer was, in the middle of the page:
"The Companies support the objective that the transition period creates incentives for wholesale customers of regulated products to promptly negotiate new arrangements with the ILECs or encourage these competitors to build their own facilities quickly." (As Read)
LISTNUM 1 \l 16636 So I gather that one of the objectives of the transition period, according to The Companies, Mr. Bibic, is that everybody should have time to make alternative arrangements for facilities, right, that is one?
LISTNUM 1 \l 16637 MR. BIBIC: Correct.
LISTNUM 1 \l 16638 MR. RUBY: And the second is you have to have time to build alternative facilities, that is the bit at the end of that paragraph I just read?
LISTNUM 1 \l 16639 MR. BIBIC: Well, it actually says, "encourage these competitors to build their own facilities quickly," it doesn't necessarily mean that we are saying that all competitors need to build all facilities within a one‑year period of time of course.
LISTNUM 1 \l 16640 MR. RUBY: Okay. I mean, this isn't a shock, your answer. If you turn over the page to No. 403, there is another question from the Commission about exactly that:
"..support Bells underlying assumption that competitors can build facilities required in one year, including a discussion that identifies any facilities, services for which a one‑year transition period may not be appropriate." (As Read)
LISTNUM 1 \l 16641 Starting at the end, it is not really answered here, but I gather you think that there are no facilities that should have a more than one‑year transition period?
LISTNUM 1 \l 16642 MR. BIBIC: In our proposal, that is correct.
LISTNUM 1 \l 16643 MR. RUBY: You say:
"The Companies do not assume that competitors can or would build facilities during the one‑year transition period." (As read)
LISTNUM 1 \l 16644 I have to admit I have a hard time getting my head around this. We heard a discussion that it has taken Bell somewhere between 30 and 20 years to put in all that fibre, and you don't think that it can be done in a year; you have told us that. You have also told us that part of the reason for a transition is to have time to build some facilities.
LISTNUM 1 \l 16645 How much do you think is going to get built in a year?
LISTNUM 1 \l 16646 MR. BIBIC: Frankly, Mr. Ruby, I am not going to waste everyone's time commenting on your 20 to 30 years, so I will cut to the chase.
LISTNUM 1 \l 16647 Take Bell West. What we will do is we will sit down and we will say we have all these facilities that we are not using. We are going to migrate traffic over those facilities. In other cases we are going to sit down with Shaw, Big Pipe or TELUS, we will reach arrangements. In other cases we will sit down and we will say, let's re‑ignite the build program in the west, I suspect, or look at it, at least, and where it makes sense we will start building. It will be a mix of things.
LISTNUM 1 \l 16648 That is what we suspect everyone would do.
LISTNUM 1 \l 16649 MR. RUBY: So, not even for Bell West do you expect to get what you need built in a year?
LISTNUM 1 \l 16650 MR. BIBIC: Pardon me?
LISTNUM 1 \l 16651 MR. RUBY: Within a year, even for Bell West, you can't get built what you need in a year.
LISTNUM 1 \l 16652 MR. BIBIC: In some cases I am sure we can build some lateral connections in less than a year. In other cases, no. In other cases, we will use what we have. In other cases, I am sure Mr. Grieve over there and his colleagues will be happy to sell us services.
LISTNUM 1 \l 16653 MR. RUBY: We will ask Mr. Grieve how happy he will be about it.
LISTNUM 1 \l 16654 I take it, though, we can agree that certainly within the year nobody is going to be building a third wire line into homes in Canada. So, in the residential market, you don't expect any construction to take place?
LISTNUM 1 \l 16655 MR. BIBIC: Are you talking about access?
LISTNUM 1 \l 16656 MR. RUBY: Access. The wire from the central office or a cable head end, or whatever we call it, to the home.
LISTNUM 1 \l 16657 MR. BIBIC: Over time, technology may be such that providers will wirelessly connect to the home. In the meantime, again, there are options if you want access. We talk about out west in this particular case to the home and sit down with one of the two wire line providers and see what can be done.
LISTNUM 1 \l 16658 MR. RUBY: But I want to make this clear because this is important to my client.
LISTNUM 1 \l 16659 You have a transition period starting when the Commission makes its decision, let's say, roughly in six months. So, in 18 months we cannot expect collectively that there will be anybody who will have built on any significant basis residential access connections, and that is wireless, wire line, that is everything, right; that is not happening in the next 18 months?
LISTNUM 1 \l 16660 MR. BIBIC: Mr. Ruby, I don't think you and I disagree at all on this issue. I looked at your opening statement, and with respect to access you say:
"Wholesale regulation plays no role in innovation and investment decisions with respect to access." (As read)
LISTNUM 1 \l 16661 Wholesale regulation isn't causing people to build. You and I seem to agree it is great.
LISTNUM 1 \l 16662 MR. RUBY: Okay.
LISTNUM 1 \l 16663 MR. BIBIC: You also say:
"Only the advent of disruptive technologies leads to the construction of new access facilities, e.g. cable planned for telecom purposes." (As read)
LISTNUM 1 \l 16664 Again, you and I seem to agree, it is great. So, technology may change.
LISTNUM 1 \l 16665 At the end of the day, if we are a provider out west who wants to reach the residential home ‑‑ we happen not to be, but if we were ‑‑ well, maybe technology would allow us to or maybe it wouldn't. That would be for us to figure out.
LISTNUM 1 \l 16666 At the end of the day, from a policy perspective, the consumer is well served. They have the cable company; they have the incumbent out west; they have wireless; they have the resellers; the resellers can wholesale from the incumbents. There are lots of choice.
LISTNUM 1 \l 16667 Bell and Primus really seem to agree, based on your opening statement.
LISTNUM 1 \l 16668 MR. RUBY: All right. Well, I was happy to hear we agree. The rest of the speech I think I will just pass on and keep going.
LISTNUM 1 \l 16669 We have another document I would like you to turn to, please. It is Companies/Bureau 12 April, number 34. The Secretary is handing out copies.
LISTNUM 1 \l 16670 I would like to ask you about sub‑question (d) as in David.
LISTNUM 1 \l 16671 This is a question about interexchange carriers. The Bureau asked:
"If there is effective competition in the local exchange, is denial of interconnection of an IXC likely to result in a loss of consumer welfare? If so, why not?" (As read)
LISTNUM 1 \l 16672 And so on. And then asks:
"Does it matter if interconnection is for the purposes of termination or origination of traffic?" (As read)
LISTNUM 1 \l 16673 The answer you gave is:
"If there is effective competition in a local market, denial of IXC interconnection may not result in a loss of consumer welfare. Competition in the retail market may be unaffected because end customers generally obtain access to toll services through one of a number of competing integrated providers of local toll and service." (As read)
LISTNUM 1 \l 16674 Just so we understand, "competing integrated providers of local toll and service," those can only be ILECs and cable companies in the residential market. Right?
LISTNUM 1 \l 16675 I am asking ‑‑ who was responsible for this answer on your panel? I just want to make sure I ask the right person.
LISTNUM 1 \l 16676 MR. BIBIC: All of us.
LISTNUM 1 \l 16677 MR. RUBY: Okay. As I think you might have been called the Chairman of the panel, I will ask you, Mr. Bibic.
LISTNUM 1 \l 16678 So, "competing integrated providers of local and toll service," who is that code for?
LISTNUM 1 \l 16679 MR. BIBIC: Local exchange carriers and cable companies, I believe, who actually are local exchange carriers, CLECs, cable companies, ILECs.
LISTNUM 1 \l 16680 MR. RUBY: When you say "competing integrated providers," you are including CLECs?
LISTNUM 1 \l 16681 MR. BIBIC: Yes.
LISTNUM 1 \l 16682 MR. RUBY: Thank you. That clarifies it and I can move on.
LISTNUM 1 \l 16683 Ms Sanderson, I can't quite see you back there.
LISTNUM 1 \l 16684 MS SANDERSON: Yes.
LISTNUM 1 \l 16685 MR. RUBY: I have a very brief question for you.
LISTNUM 1 \l 16686 I seem to recall that yesterday you told Mr. Koch that CRA's analysis showed that, I think what you call EFC, end‑to‑end facilities‑based competition, leads to more broadband competition. Right?
LISTNUM 1 \l 16687 MS SANDERSON: Yes. That was one of the conclusions of our study. We have a number of conclusions from the study, but one of them was that the greater amount that you have of end‑to‑end facilities‑based competition, the greater broadband penetration you will get, and the effect of the end‑to‑end facilities‑based competition gives you greater broadband penetration and better pricing than if you rely on access‑based competition.
LISTNUM 1 \l 16688 MR. RUBY: Right. So one leads to the other was the gist of I think what I took from yesterday?
LISTNUM 1 \l 16689 MS SANDERSON: There are three hypotheses that we test in the study.
LISTNUM 1 \l 16690 MR. RUBY: I don't want to take you out of your materials. Can we turn up your report, and I have provided a copy of the page I want to refer to to the Secretary.
LISTNUM 1 \l 16691 This is the CRA report. It is page 2 of the report, pages 2 and 3. It is appendix 3 to Bell's March 15 evidence. While we are there, Madam Secretary, next I am going to go to page 21 of the same report, so maybe we can do them together.
LISTNUM 1 \l 16692 THE CHAIRPERSON: Don't we have the CRA report in front of us? Can't you just point us to the page?
LISTNUM 1 \l 16693 MR. RUBY: I can. If you have it in front of you, it is page 2.
LISTNUM 1 \l 16694 COMMISSIONER del VAL: Page 2 is the index.
LISTNUM 1 \l 16695 MR. RUBY: Sorry, it is page 8 at the top and page 2 at the bottom.
LISTNUM 1 \l 16696 THE CHAIRPERSON: Page 2 at the bottom, okay.
LISTNUM 1 \l 16697 COMMISSIONER del VAL: I think my numbering got renumbered.
LISTNUM 1 \l 16698 MR. RUBY: It is paragraph 10. How is that?
LISTNUM 1 \l 16699 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 16700 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 16701 MR. RUBY: These, Ms Sanderson, are the three hypotheses you just started to talk about?
LISTNUM 1 \l 16702 MS SANDERSON: Yes, they are.
LISTNUM 1 \l 16703 MR. RUBY: And 11 is your sort of summary conclusion, right?
"Our results on broadband concentration outcomes were clearly consistent with all three of these hypotheses." (As read)
LISTNUM 1 \l 16704 MS SANDERSON: Our results on broadband penetration, not concentration.
LISTNUM 1 \l 16705 MR. RUBY: Pardon me, I misspoke. Thank you for correcting me.
LISTNUM 1 \l 16706 If I can ask you to flip over to, you see there is a footnote 3, but footnote 3 actually appears on the next page, where it says:
"Note that our empirical work represents correlations rather than proof of causality." (As read)
LISTNUM 1 \l 16707 And then you go on to say but it supports what we are saying anyways. I take it that the CRA analysis, just to put this in a nutshell, does not prove that the level of wholesale regulation causes the level of end‑to‑end facilities‑based competition. That is what footnote 3 means. Right?
LISTNUM 1 \l 16708 MS SANDERSON: Even if one did a regression analysis, which we report in the study, other people's work in relation to regression analysis, there is this debate about sort of what causes what.
LISTNUM 1 \l 16709 Typically in economics, the way we think about these things is that when there is a very high correlation in the sense that we always find greater broadband penetration with more end‑to‑end facilities‑based competition or we tend to get lower prices on a performance‑adjusted basis when we have more end‑to‑end facilities competition, and if we control for other things that are happening ‑‑ differences in population density, differences in income, what actually is going on in the wholesale regulatory regime ‑‑ when we do all of that and we find this strong correlation, we, as economists, tend to think of it as causality or, in general terms, one causes the other.
LISTNUM 1 \l 16710 But from a pure statistical point of view, statisticians will think about it as a correlation.
LISTNUM 1 \l 16711 MR. RUBY: Thank you, Ms Sanderson.
LISTNUM 1 \l 16712 Only because you sort of talked about a number of other factors, I would just like to take you to one of them.
LISTNUM 1 \l 16713 One of your two key aspects of broadband you examined was price. Right?
LISTNUM 1 \l 16714 MS SANDERSON: Performance‑adjusted price.
LISTNUM 1 \l 16715 MR. RUBY: If we can flip to page 27 of the same report, which is 17 of 113, paragraph 69, I just want to take you to the first sentence, where you say:
"Broadband price is also a key outcome, but is less easily compared than penetration." (As read)
LISTNUM 1 \l 16716 Then you give a reason for that.
LISTNUM 1 \l 16717 I take it from your study, as far as I can see, in assessing price you included for Canada the effective pricing by non‑end‑to‑end facilities‑based competitors. Right? So the effect that companies like Primus' low prices affect the overall price in the market, that was taken into account in your study for Canada?
LISTNUM 1 \l 16718 MS SANDERSON: The price comparisons are actually not the average price across the market, but instead they are the prices that the ILEC is charging in each of the different countries on a per 100 kilobyte per second basis.
LISTNUM 1 \l 16719 To the extent obviously that there is competition in that market, so that Primus' prices and Rogers' prices and Vidéotron's prices and so on are affecting what the ILEC is charging, then that will be captured in the ILEC's price. The data that is in here is not an average price across all providers. It is a price for each ILEC in that territory.
LISTNUM 1 \l 16720 MR. RUBY: Thank you for that clarification. That is helpful.
LISTNUM 1 \l 16721 If I can ask you for one other clarification.
LISTNUM 1 \l 16722 I think you told Mr. Koch yesterday that countries with more competitors had higher penetration rates for broadband. Is that right?
LISTNUM 1 \l 16723 MS SANDERSON: We had three key findings.
LISTNUM 1 \l 16724 One was that the more end‑to‑end facilities‑based competition that you have, the greater your broadband penetration rates.
LISTNUM 1 \l 16725 The second conclusion was that when you then have both a lot of access‑based competition in addition to, so you have two things going on at once, you have end‑to‑end facilities‑based competition and you have access‑based competition through the wholesale regulatory regime, that the driver of either broadband penetration or the driver of low prices when you have both things going on is the end‑to‑end facilities‑based competition. That is a more important driver of those better market outcomes than the access.
LISTNUM 1 \l 16726 Then the last thing we concluded was that when you have a lot of end‑to‑end facilities‑based competition already and you add on top of that additional wholesale regulatory structures, you don't get a lot of additional benefits from adding that extra wholesale regulatory regime. Basically back to the main point that the thing that drives these better outcomes is the end‑to‑end facilities‑based competition.
LISTNUM 1 \l 16727 MR. RUBY: Thank you. I think your second point was actually the answer to my question.
LISTNUM 1 \l 16728 I take it, then, that all the competitors for your second point you are dealing with, those are retail competitors you are talking about?
LISTNUM 1 \l 16729 MS SANDERSON: These are end‑to‑end facilities‑based competitors, that is right, in retail broadband.
LISTNUM 1 \l 16730 MR. RUBY: Thank you.
LISTNUM 1 \l 16731 Mr. Bibic, maybe we can take a very few minutes and talk about Bell's position that access tandem connections are not essential. I have the position right. Right?
LISTNUM 1 \l 16732 MR. BIBIC: You will have to direct those questions to Mr. Henry.
LISTNUM 1 \l 16733 MR. RUBY: To?
LISTNUM 1 \l 16734 MR. BIBIC: Mr. Henry to my left.
LISTNUM 1 \l 16735 MR. RUBY: All right, Mr. Henry.
LISTNUM 1 \l 16736 MR. HENRY: Yes.
LISTNUM 1 \l 16737 MR. RUBY: Have I got the position right?
LISTNUM 1 \l 16738 MR. HENRY: Yes.
LISTNUM 1 \l 16739 MR. RUBY: Can you just take hopefully ten seconds and just make sure the Commission understands what an access tandem connection is.
LISTNUM 1 \l 16740 MR. HENRY: It is, in our view, transport from one switch to the local switch, or traffic that is destined from a long‑distance carrier to a local switch, for example, can be dropped off at an intermediate stage at an access tandem switch. So, it is the transport function to take it down to the local switch.
LISTNUM 1 \l 16741 Our view is that the mandated part of toll interconnection should really be at the local switch. Happy to have people connect at the higher level and the network, but that is transport.
LISTNUM 1 \l 16742 MR. RUBY: That is fine. I just wanted to make sure we were all on the page with which piece of technology we were talking about.
LISTNUM 1 \l 16743 So, let's focus on IXC origination connections as opposed to termination. All right, Mr. Henry?
LISTNUM 1 \l 16744 MR. HENRY: Okay.
LISTNUM 1 \l 16745 MR. RUBY: I take it you would agree with me that the routing of originating 800 or 888 calls is only done through an access tandem?
LISTNUM 1 \l 16746 MR. HENRY: Yes.
LISTNUM 1 \l 16747 MR. RUBY: Therefore, if we want to have competitive use of access tandems, so if a competitor, for whatever reason, because it was denied or the price was too high or whatever, couldn't use an access tandem, there would be no competitive 800 or 888 service. Do those two go together?
LISTNUM 1 \l 16748 If it helps you, Mr. Henry, I have provided to your counsel a few days ago a copy of Bell Tariff CRTC 75‑16. At item 40, sub (1), sub (d) ‑‑ and this would be an exhibit, Mr. Chairman ‑‑ that deals with this. So if that helps Mr. Henry answer the question, I am happy to have him look at it.
LISTNUM 1 \l 16749 THE SECRETARY: I note that exhibit to be Primus/Globility Exhibit No. 4.
LISTNUM 1 \l 16750 MR. RUBY: Thank you.
EXHIBIT PRIMUS‑4: Bell Tariff CRTC 75‑16
LISTNUM 1 \l 16751 MR. RUBY: So, the reference, Mr. Chairman, was item 40 ‑‑ this is the first page of the package ‑‑ 40(1)(d). It is the second to last bit on the first page. It talks about 800 calls and then says:
"This arrangement is available for AT connections only ..." (As read)
LISTNUM 1 \l 16752 MR. HENRY: I think the confusion is ‑‑ and I may have caused it ‑‑ I think we are saying for 800 it would be mandated for 800 service.
LISTNUM 1 \l 16753 MR. RUBY: Sorry, you think ‑‑ so, originating calls that are 800 calls could go through your access tandem on an essential basis, but no other type of call?
LISTNUM 1 \l 16754 MR. HENRY: On a mandated basis.
LISTNUM 1 \l 16755 It would be mandated interconnection, in the interconnection part of our ‑‑
LISTNUM 1 \l 16756 MR. RUBY: Could I ask you: Which one of the Commission's six buckets does that fit into?
LISTNUM 1 \l 16757 MR. BIBIC: What is the "it"?
LISTNUM 1 \l 16758 MR. RUBY: What Mr. Henry just described, 800 origination ‑‑
LISTNUM 1 \l 16759 MR. HENRY: It would be in either 5 or 6. I think 6 is interconnection.
LISTNUM 1 \l 16760 It would be in the interconnection bucket.
LISTNUM 1 \l 16761 MR. RUBY: Okay. Thank you.
LISTNUM 1 \l 16762 Let's stick with access tandems for a moment and originating traffic.
LISTNUM 1 \l 16763 I take it, Mr. Henry, you would agree with me that 1‑plus dialling gives an interexchange ‑‑ or the capability of offering subscribers access to the network. Right?
LISTNUM 1 \l 16764 That's what it does?
LISTNUM 1 \l 16765 MR. HENRY: That's one way, yes.
LISTNUM 1 \l 16766 MR. RUBY: That is certainly the way the customers like it ‑‑ right ‑‑ 1‑plus dialling?
LISTNUM 1 \l 16767 MR. HENRY: That is one way, but there is dial‑around, 10‑10 dialling, et cetera.
LISTNUM 1 \l 16768 MR. RUBY: All right. That's fine.
LISTNUM 1 \l 16769 Today, sitting here, the 1‑plus dialling feature can be connected either ‑‑ originating traffic I am talking about ‑‑ can be connected either at an access tandem or an end office. Right?
LISTNUM 1 \l 16770 And we call the end office connection a direct connection?
LISTNUM 1 \l 16771 MR. HENRY: That's right.
LISTNUM 1 \l 16772 MR. RUBY: I take it that you don't want to get rid of direct connections. That's not part of your plan?
LISTNUM 1 \l 16773 MR. HENRY: So long as there is 1‑plus equal access mandated, yes, you would have to mandate toll interconnection at the local office, which is, as you say, direct connect.
LISTNUM 1 \l 16774 MR. RUBY: Let's explore a couple of consequences of that, then.
LISTNUM 1 \l 16775 If we have direct connection mandated, but not access tandem, which, as I understand it, you have said is Bell's proposal, that means, I take it, that ‑‑
LISTNUM 1 \l 16776 Let me put it this way. You would agree with me that direct connection circuits have a fixed capacity. There is no ability for them to overflow into other circuits. Right?
LISTNUM 1 \l 16777 That's the way they work?
LISTNUM 1 \l 16778 MR. HENRY: Now you are getting into a level of technical knowledge that is certainly beyond my knowledge.
LISTNUM 1 \l 16779 I am told by my experts that there is an overflow portion for the interconnecting circuits. There is an overflow option.
LISTNUM 1 \l 16780 MR. RUBY: That is with access tandem. Right?
LISTNUM 1 \l 16781 With access tandem there is a network, so things can overflow.
LISTNUM 1 \l 16782 MR. HENRY: No, I'm told that the option exists for direct connect, as well.
LISTNUM 1 \l 16783 MR. RUBY: Okay. Let me look at this a different way.
LISTNUM 1 \l 16784 If a CLEC builds a direct connection, its traffic flows over its circuit ‑‑ right ‑‑ all of it. If it has too much traffic to go over that circuit, Bell doesn't automatically pick up the excess. Right?
LISTNUM 1 \l 16785 MR. HENRY: You can order extra circuits on an overflow basis.
LISTNUM 1 \l 16786 MR. RUBY: Okay. So you say that I can buy it from you, but there is no automatic overflow system for direct connections like there is for an access tandem. Right?
LISTNUM 1 \l 16787 MR. HENRY: No.
LISTNUM 1 \l 16788 MR. RUBY: That means, doesn't it, that a CLEC who is building a circuit has to build each circuit to accommodate the maximum amount of traffic that may flow through it?
LISTNUM 1 \l 16789 Otherwise, you are going to risk dropped calls.
LISTNUM 1 \l 16790 And that is different from an access tandem, where there is an overflow mechanism. Right?
LISTNUM 1 \l 16791 MR. BABIN: Maybe I could add, Mr. Ruby, that, obviously, in traffic engineering you have to design how many circuits you would need based on your assumptions, or on your client's assumptions of the number of customers that are going to be using those types of facilities.
LISTNUM 1 \l 16792 It is traffic engineering.
LISTNUM 1 \l 16793 MR. RUBY: Okay. Let me ask you this. When you do your traffic engineering, if you don't have an overflow capability, you need to either put in more circuits or bigger capacity circuits to deal with the high‑end traffic that comes along once in a while. Right?
LISTNUM 1 \l 16794 That's the way it works?
LISTNUM 1 \l 16795 MR. BABIN: Generally, companies are growing, traffic is growing, you would probably add more circuits. Absolutely.
LISTNUM 1 \l 16796 MR. RUBY: And that costs more. Right?
LISTNUM 1 \l 16797 MR. BABIN: More customers, more infrastructure, more cost.
LISTNUM 1 \l 16798 MR. RUBY: Would you agree with me that it is less efficient to have all of these competitors building these circuits that are bigger and better instead of using an access tandem system where there is overflow and the opportunity to balance traffic?
LISTNUM 1 \l 16799 MR. BABIN: The interconnection we are offering is at the DC, at the COs, and those are the technical services that we have.
LISTNUM 1 \l 16800 MR. RUBY: Right, but you were talking about planning the network. It is more efficient to use access tandem ‑‑ that system, that network ‑‑ as a whole for the system. Right?
LISTNUM 1 \l 16801 It's indisputable.
LISTNUM 1 \l 16802 Or, maybe you do dispute it.
LISTNUM 1 \l 16803 MR. BIBIC: There are network efficiencies, and those can be derived through parties sitting together and figuring out if they could take advantage of efficiencies by banding together and coming to a solution together.
LISTNUM 1 \l 16804 MR. RUBY: I think we have talked a little bit about that already.
LISTNUM 1 \l 16805 Staying with direct connections and interexchange carriers ‑‑ and I will make some, hopefully, easy assumptions to do this.
LISTNUM 1 \l 16806 If there are 30 interexchange carriers in Canada that operate nationally ‑‑
LISTNUM 1 \l 16807 By the way, is that a reasonable assumption?
LISTNUM 1 \l 16808 I have to admit that I looked on the Commission's website and I can't find a list any more for IXCs. The lists seem to be divided a different way, but the Commission certainly knows how many IXCs there are.
LISTNUM 1 \l 16809 Maybe not right this minute, but ‑‑
LISTNUM 1 \l 16810 MR. BIBIC: We can't comment one way or another.
LISTNUM 1 \l 16811 THE CHAIRPERSON: In any event, it's not relevant. There is more than one, and we all know that.
LISTNUM 1 \l 16812 MR. RUBY: Right.
LISTNUM 1 \l 16813 Just for number purposes, I am telling you it's 30. The Commission may figure out that it's different, but if you could assume with me for the moment that it's 30, that's my best guess from a review of the information available.
LISTNUM 1 \l 16814 Is it fair to say that there are at least 3,000 end offices in Canada?
LISTNUM 1 \l 16815 MR. HENRY: Again, I will take that subject to check.
LISTNUM 1 \l 16816 MR. RUBY: It's closer to 4, right? So 3 is a pretty reasonable assumption, do you think?
LISTNUM 1 \l 16817 MR. HENRY: I will take it subject to check. I have no idea.
LISTNUM 1 \l 16818 MR. RUBY: All right. So if we have 30 IXCs and 3,000 end offices in Canada, it is not difficult math to know that you would need 90,000 direct connection circuits to provide the same service as access tandems do today.
LISTNUM 1 \l 16819 That is just 30 times 3,000.
LISTNUM 1 \l 16820 MR. BABIN: Those connections are in place today, Mr. Ruby. You are assuming that access tandem facilities no longer exist.
LISTNUM 1 \l 16821 MR. RUBY: No, I am assuming that you have either refused people the right to use them, or priced them above the cost that you can construct your own network.
LISTNUM 1 \l 16822 If you want us to use your facilities, then let's make them essential and have mandated pricing, and off we go. But, as I understand it, that's not your proposal. You want to take access tandem out of the mandated box.
LISTNUM 1 \l 16823 MR. BIBIC: Yes, and that doesn't mean that we don't want customers to use them.
LISTNUM 1 \l 16824 COMMISSIONER CRAM: Excuse me. I would like an answer to the question that was asked: If there were 3,000 end offices and 30 IXCs, you would need 90,000 DC circuits instead of an AT.
LISTNUM 1 \l 16825 MR. BIBIC: Ms Cram, if all incumbents across the country were to deny use of their facilities ‑‑
LISTNUM 1 \l 16826 COMMISSIONER CRAM: Mr. Bibic, I just want the answer to that.
LISTNUM 1 \l 16827 MR. BIBIC: I am giving you the answer, Ms Cram.
LISTNUM 1 \l 16828 ‑‑ and all of the interexchange carriers had to build their own, and the Commission didn't come in and find them to be essential, then, yes.
LISTNUM 1 \l 16829 COMMISSIONER CRAM: Thank you.
LISTNUM 1 \l 16830 MR. BABIN: Could I also add, Mr. Ruby, that there is no incentive for the ILECs to deny access to those facilities because their end customers are going to suffer.
LISTNUM 1 \l 16831 As you know, if an IXC customer is calling an ILEC end customer, and there is no ability to get to that customer, there is no incentive for us to deny that access, because our customers are going to request it.
LISTNUM 1 \l 16832 MR. RUBY: I am not going to argue about this with you, sir.
LISTNUM 1 \l 16833 THE CHAIRPERSON: But, presumably, your main point is, if your wholesale dropped dead, business would surely suffer ‑‑ if you denied access to all of these people.
LISTNUM 1 \l 16834 That is what I seem to have heard over the last two days.
LISTNUM 1 \l 16835 MR. BIBIC: Yes, the wholesale business would suffer, and so would our retail business, because the customers wouldn't be able to make calls.
LISTNUM 1 \l 16836 MR. RUBY: You could certainly raise the prices, though, because you are the only ones who have it. Right?
LISTNUM 1 \l 16837 MR. BIBIC: Then, if we were to do that, the customer would be kind of annoyed and might go to the cable company provider to get their toll and local and everything else, or any other number of providers.
LISTNUM 1 \l 16838 MR. RUBY: Don't the cable companies want to use your access tandems, too?
LISTNUM 1 \l 16839 MR. BIBIC: They have a lot of customers. Again, if we prevent the ability of customers to contact each other, that's not very good business.
LISTNUM 1 \l 16840 MR. RUBY: That's fair enough. This is part of your "Trust us" message.
LISTNUM 1 \l 16841 If we contrast the situation with access tandems, how many access tandems, roughly, are there in Canada?
LISTNUM 1 \l 16842 I am guessing 30, but you would have a better idea than I would.
LISTNUM 1 \l 16843 MR. HENRY: I don't know in Canada. I think there are 12 in Ontario and Quebec.
LISTNUM 1 \l 16844 MR. RUBY: All right. So let's take 30 subject to check. We could always redo the math.
LISTNUM 1 \l 16845 If we have 3,000 end offices, 30 access tandems, and 30 interexchange providers, that means, for access tandem architecture, that we would only need 3,900 circuits ‑‑ right ‑‑ as opposed to 90,000 for direct connect?
LISTNUM 1 \l 16846 That is, relatively, the kind of construction or new facility difference we are talking about.
‑‑‑ Pause
LISTNUM 1 \l 16847 COMMISSIONER CRAM: Could I have those numbers again, Mr. Ruby?
LISTNUM 1 \l 16848 MR. RUBY: If there were 3,000 end offices, the same ‑‑
LISTNUM 1 \l 16849 COMMISSIONER CRAM: Yes.
LISTNUM 1 \l 16850 MR. RUBY: ‑‑ assumption as last time, 30 IXEs, the same assumption as last time, and 30 access tandems ‑‑
LISTNUM 1 \l 16851 COMMISSIONER CRAM: Yes.
LISTNUM 1 \l 16852 MR. RUBY: ‑‑ which we are making a jump from 12 in Ontario to Quebec to make it 30 for the whole country, that adds up to me to 3,900, 30 times 30 plus 3,000.
LISTNUM 1 \l 16853 COMMISSIONER CRAM: Thirty‑nine hundred circuits?
LISTNUM 1 \l 16854 MR. RUBY: Thirty‑nine hundred circuits. So that is all you need compared to the 90,000.
LISTNUM 1 \l 16855 COMMISSIONER CRAM: Thank you.
LISTNUM 1 \l 16856 MR. RUBY: But I don't think I got an answer from the Bell panel.
‑‑‑ Pause
LISTNUM 1 \l 16857 MR. HENRY: The reason I am struggling, Mr. Ruby, is because you are assuming that they couldn't connect, make arrangements with other carriers to connect and transport some of that traffic. So it wouldn't follow that you would have to do all of those routes.
LISTNUM 1 \l 16858 MR. RUBY: All right. I am just getting out the magnitude. If they couldn't make common arrangements, it would be 90,000 versus roughly 4,000. If there was a whole lot of connection, we would bring it down to 45,000 new circuits.
LISTNUM 1 \l 16859 You can't disagree with me about this, right
LISTNUM 1 \l 16860 MR. HENRY: Under your assumptions, if you assume that nobody is going to connect with anybody else and that they had to build on every route, then I guess your match is correct.
LISTNUM 1 \l 16861 MR. RUBY: Okay. And I take it if they did do that ‑‑ so you stuck with my assumptions and we had ‑‑
LISTNUM 1 \l 16862 MR. HENRY: If I can just give you an example, I think, on the record ‑‑
LISTNUM 1 \l 16863 MR. RUBY: No, Mr. Henry, I am fine, I am moving on to the next question.
LISTNUM 1 \l 16864 MR. HENRY: Well, I am going to give you an example why perhaps yours is unrealistic.
LISTNUM 1 \l 16865 Cogeco connects without even connecting through Bell in Ontario and they connect through TELUS. So again, they haven't any problem transporting their traffic or getting transmitted.
LISTNUM 1 \l 16866 MR. RUBY: I am not saying that it will have to be a full 90,000. Sure, there would be cooperation.
LISTNUM 1 \l 16867 But you will agree with me that the magnitude of the difference is huge, right?
LISTNUM 1 \l 16868 You know, I am not even going to ask you to answer the question, I will move on.
LISTNUM 1 \l 16869 THE CHAIRPERSON: I think it is time to move on. You have made your point. We will draw whatever conclusion we want from it.
LISTNUM 1 \l 16870 MR. RUBY: Let me, if I may, ask one last question.
LISTNUM 1 \l 16871 I take it that whether the number is 90,000 or 50,000 or 40,000 new direct connection circuits, the customer gets no advantage from all these new circuits; right? These are just transport, extra fiber. The customer doesn't benefit if there is no new services coming. If anything, the prices have to go up.
LISTNUM 1 \l 16872 MR. HENRY: Well, that is like saying the customer doesn't benefit from any kind of transport that is being built by other carriers. I mean we have had all kinds of evidence this week about incentives to build, why we need them, the innovation that comes from that, et cetera, et cetera.
LISTNUM 1 \l 16873 To say, well, why don't we just have one carrier and the customer is not going to get any more benefit if he has different facilities in the ground, I am not sure ‑‑
LISTNUM 1 \l 16874 MR. RUBY: But what we are talking about is these new circuits to just get us to where we are today. This isn't expanding the network, right? We are just comparing what exists today for access tandem to what it would take if we had to build out direct connections instead.
LISTNUM 1 \l 16875 MR. HENRY: That is all we are talking about with any kind of local competition, is customers getting to call the same people.
LISTNUM 1 \l 16876 MR. RUBY: Well, I am not sure that is ‑‑
LISTNUM 1 \l 16877 MR. HENRY: I mean I really don't follow your point, Mr. Ruby.
LISTNUM 1 \l 16878 MR. RUBY: All right. Well, I am not sure that is what I read in your materials but thank you, panel, and thank you, Mr. Chairman, those are my questions.
LISTNUM 1 \l 16879 THE CHAIRPERSON: Thank you very much.
LISTNUM 1 \l 16880 Commissioner Noël, you had a question?
LISTNUM 1 \l 16881 COMMISSIONER NOEL: I guess I forgot what it was.
LISTNUM 1 \l 16882 THE CHAIRPERSON: Okay.
LISTNUM 1 \l 16883 Commissioner Cram.
LISTNUM 1 \l 16884 COMMISSIONER CRAM: I am sorry, there is one issue that I forgot yesterday.
LISTNUM 1 \l 16885 Dr. Taylor, when you were being asked about 1123 in your Price Cap II testimony, I am not sure ‑‑ 1123.
LISTNUM 1 \l 16886 MR. TAYLOR: I am there.
LISTNUM 1 \l 16887 COMMISSIONER CRAM: And you said to Mr. Koch when he was referring to access at the ILEC's costs, you changed it and said at the ILEC's economic cost.
LISTNUM 1 \l 16888 Now, are you really talking Phase II plus a mark‑up; is that what you are talking about?
LISTNUM 1 \l 16889 MR. TAYLOR: Well, let me put my head around 2001 again.
LISTNUM 1 \l 16890 COMMISSIONER CRAM: Sure. Yes.