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Order CRTC 2000-317
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Ottawa, 18 April 2000
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Definitions of larger cable carrier and the creation of confidentiality agreements
Reference: 8638-C12-26/99
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The Commission finds that, for tariffing purposes, as well as for the treatment of confidential competitor information, Cogeco, Rogers, Shaw and Vidéotron are considered to be larger cable carriers. (Cable carriers are cable distribution undertakings that also provide telecommunications services using facilities they use to provide cable services.) Such larger carriers that offer both higher speed retail Internet services and underlying broadband access services are required to create a Customer Services Group (CSG) to handle the broadband access service requests of competitor Internet service providers (ISPs). All other incumbent cable carriers that offer these services are required to enter into a standardized non-disclosure agreement. Parties will be provided with the opportunity to negotiate the terms of such agreements. Failing that, a process will be implemented to finalize both agreements.
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Background
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1.
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In Regulation under the Telecommunications Act of cable carriers' access services, Telecom Decision CRTC 99-8 dated 6 July 1999, the Commission sought comment on various issues regarding the regulation of incumbent cable carriers' higher speed access services. These access services will enable competitive providers of retail Internet services to offer higher speeds using the infrastructure of incumbent cable carriers.
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2.
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In this order, the Commission focuses on three issues:
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(a) the definition of larger carrier for tariffing purposes;
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(b) the definition of larger carrier for purposes of the treatment of confidential competitor information; and
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(c) the creation of CSGs and non-disclosure agreements to address concerns regarding the confidentiality of competitor information.
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Issues
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Definition of larger carrier for tariff purposes
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3.
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In Decision 99-8, the Commission sought comment on its preliminary view that "larger" cable carriers for the purpose of that decision are the seven largest cable multiple system operators (MSOs), defined with reference to the number of cable subscribers. Based on this criteria, the Commission considered Rogers Communications Inc., Vidéotron ltée, Shaw Communications Inc., Cogeco Câble Canada inc., Moffat Communications Limited, Fundy Cable Ltd/ltée and Bragg Communications Incorporated to be "larger", cable carriers, and further found that Rogers, Vidéotron, Shaw and Cogeco would be the largest four MSOs with reference to any measure. Since the release of Decision 99-8, Shaw has acquired the cable systems formerly licensed to Fundy.
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4.
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The Commission also gave Moffat and Bragg the choice of submitting proposed access rates based on costs, submitting an alternative approach to the development of its rates or awaiting the Commission's determination on the definition of "larger" carrier.
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5.
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Moffat submitted that it more reasonably matches the characteristics of a smaller MSO because it does not forecast providing high-speed Internet access to the bulk of its regional subscribers and its systems are geographically dispersed and segmented into two distinct operating areas. Moffat also argued that, unlike Cogeco, Rogers, Shaw and Vidéotron, it does not have the resources available to cost justify rates and would have to hire additional personnel over the longer term to develop such justification in respect of proposed access rates.
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6.
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Moffat stated it will adhere to all requirements to make third-party access available where it offers high speed Internet services. However, instead of conducting its own cost studies, Moffat proposed to base its tariffed rates on the Phase II studies of the four largest carriers (proxy rates).
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7.
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Bragg also submitted that it should be characterized as a smaller cable carrier for tariffing purposes, as most of its systems are Part III systems and are geographically dispersed. Bragg proposed to determine whether it will use proxy costing or base its tariffed rates on its own costs once the models developed by the four carriers are complete.
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8.
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The implication of the Commission's definition of "larger carrier" for the carrier's tariffing obligations is that such a carrier must provide cost support for proposed access rates. To date, the Commission has required carriers to cost justify access service rates approved under the Telecommunications Act, except where the Commission has recognized this requirement would impose a burden on smaller carriers (e.g. the smaller "independent" telephone companies). These smaller carriers are generally permitted to propose proxy rates using other companies' rates, or to elect to cost justify a rate that is higher than such a proxy rate would be.
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9.
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With regard to the circumstances of Moffat and Bragg, the Commission considers they should not be treated as larger carriers for tariffing purposes and they should not be required to cost justify proposed rates for access services. The Commission confirms that Cogeco, Rogers, Shaw and Vidéotron will be required to submit cost justification for their proposed access rates and to tariff related terms and conditions, regardless of whether the cable distribution undertaking licence held under the Broadcasting Act for the system in question is a Class 1, 2 or 3 licence.
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10.
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The Commission intends to release a public notice soon to seek comment on the extent to which other approaches, including the use of proxy rates and forbearance, may be appropriate in respect of the rates and terms on which smaller incumbent carriers offer higher speed access services.
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Definition of larger carrier for purposes of the treatment of confidential competitor information
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11.
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In Decision 99-8, the Commission was of the preliminary view that, for the treatment of confidential ISP information, larger cable carriers refers to the seven largest MSOs, defined with reference to the number of cable subscribers. The Commission was of the preliminary view that the approach suggested for defining larger cable carriers for rating purposes was also appropriate for the treatment of confidential information.
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12.
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In its submission, Moffat argued that it should be characterized as a smaller cable carrier for purposes of confidential information, as it does not forecast providing high-speed Internet access to the bulk of its regional subscribers, and its systems are geographically dispersed and segmented into two distinct operating areas. Moffat submitted that, not only is there little to be gained from the creation and implementation of CSGs when standardized non-disclosure agreements will accomplish the desired goal, but so doing would result in a significant loss of economies of scale. In Moffat's view, creating and running CSGs would be more expensive and time-consuming than operating under a non-disclosure regime, especially in light of its small operating base.
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13.
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In light of the above, the Commission is of the view that Moffat should be considered to be a smaller MSO for purposes of the treatment of confidential ISP information. It considers that, in the case at hand, the use of standardized non-disclosure agreements would adequately protect competitively sensitive ISP information.
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14.
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As no other party commented on the Commission's preliminary view, for consistency with the recommendation on the definition of larger cable carriers for tariffing purposes, the Commission finds that, with respect to the treatment of confidential information, Cogeco, Rogers, Shaw and Vidéotron will be considered to be larger MSOs.
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Customer Services Groups and non-disclosure agreements
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15.
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In Decision 99-8, the Commission also determined that larger cable carriers that offer both higher speed retail Internet services and underlying broadband access services are required to create a CSG to handle the broadband access service requests of competitor ISPs. All other incumbent cable carriers that offer these services are required to enter into a standardized non-disclosure agreement with ISPs for the protection of competitively sensitive ISP information.
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16.
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The Commission further determined that it favoured standardized non-disclosure agreements, with the details negotiated by ISPs, cable carriers and their representatives. The Commission indicated that the list of items proposed by the Canadian Association of Internet Providers (CAIP) in the proceeding leading to Decision 99-8 and the incumbent local exchange carriers' (ILECs) current CSG agreements represent reasonable starting points for discussions.
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17.
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With respect to the drafting of a non-disclosure agreement, the Commission notes that the list provided by CAIP is available to parties as it was filed on the record leading up to Decision 99-8. As to the establishment of CSGs, and the related standardized CSG agreement, the Commission notes that telephone companies' CSG agreements are also available for review by parties in the ILECs' public examination rooms.
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Procedure
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18.
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The Commission directs Cogeco, Rogers, Shaw and Vidéotron to file by 29 May 2000, for Commission approval, a proposed standard non-disclosure agreement and a proposed standard CSG agreement negotiated with the ISPs, serving copies on the parties to Decision 99-8.
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19.
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In the event that the negotiations prove to be unsuccessful, Cogeco, Rogers, Shaw and Vidéotron shall file the two proposed agreements, indicating those clauses that have been agreed upon by all parties, and serving copies on all other parties.
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20.
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Interested parties may file comments on the submissions with the Commission, serving copies on all other parties,by 7 June 2000.
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21.
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Cogeco, Rogers, Shaw and Vidéotron may file comments in reply with the Commission, serving copies on all other parties, by 19 June 2000.
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22.
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Where a document is to be filed or served by a specific date, the document must be actually received, not merely sent, by that date.
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23..
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The record of this proceeding may be examined at the Commission's offices in the following locations:
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Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage, Room G-5
Hull, Quebec K1A 0N2
Tel: (819) 997-2429 - TDD: 994-0423
FAX: (819) 994-0218
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Bank of Commerce Building
1809 Barrington Street
Suite 1007
Halifax, Nova Scotia B3J 3K8
Tel: (902) 426-7997 - TDD: 426-6997
FAX: (902) 426-2721
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405 de Maisonneuve Blvd. East
2nd Floor, Suite B2300
Montréal, Quebec H2L 4J5
Tel: (514) 283-6607 - TDD: 283-8316
FAX: (514) 283-3689
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55 St. Clair Avenue East
Suite 624
Toronto, Ontario M4T 1M2
Tel: (416) 952-9096
FAX: (416) 954-6343
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Kensington Building
275 Portage Avenue
Suite 1810
Winnipeg, Manitoba R3B 2B3
Tel: (204) 983-6306 - TDD: 983-8274
FAX: (204) 983-6317
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Cornwall Professional Building
2125 - 11th Avenue
Room 103
Regina, Saskatchewan S4P 3X3
Tel: (306) 780-3422
FAX: (306) 780-3319
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Scotia Place Tower Two
19th Floor, Suite 1909
10060 Jasper Avenue
Edmonton, Alberta T5J 3R8
Tel: (780) 495-3224
FAX: (780) 495-3214
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530-580 Hornby Street
Vancouver, British Columbia V6C 3B6
Tel: (604) 666-2111 - TDD: 666-0778
FAX: (604) 666-8322
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24.
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In addition to hard copy filings, parties are encouraged to file with the Commission electronic versions of their submissions in accordance with the Commission's Interim Telecom Guidelines for the Handling of Machine-Readable Files, dated 30 November 1995. The Commission's e-mail address for electronically filed documents is procedure@crtc.gc.ca. Electronically filed documents can be accessed at the Commission's Internet site at http://www.crtc.gc.ca.
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Secretary General
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This document is available in alternate format upon request and may also be viewed at the following Internet site: http://www.crtc.gc.ca
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