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Telecom Decision
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Ottawa, 19 December 1984
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Telecom Decision CRTC 84-29
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Cellular Radio Service
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BACKGROUND
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On 22 March 1984, the Commission issued Radio Common Carrier Interconnection with Federally Regulated Telephone Companies, Telecom Decision CRTC 84-10 (Decision 84-10), wherein it determined that the interconnection of cellular radio systems to the public switched telephone network (PSTN) of federally regulated telephone companies is in the public interest. In Decision 84-10, the Commission directed Bell Canada (Bell) and British Columbia Telephone Company (B.C. Tel) to negotiate with the Cantel Cellular Radio Group Inc. (Cantel) and, where relevant, their affiliate licensed to provide cellular radio service within their operating territory (telephone company affiliate), to develop the terms and conditions for the interconnection of their cellular systems to the PSTN.
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On 16 July 1984, Bell and Cantel filed joint reports with the Commission on the status of their negotiations and indicated two points of difference which arose during their negotiations. On 25 October 1984, the Commission issued Cellular Radio Service, CRTC Telecom Public Notice 1984-55 (Public Notice 1984-55), wherein it invited comment on these two points of difference.
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Public Notice 1984-55 summarized the two points of difference as follows:
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Point 1. Costs of Interconnection
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Cantel's position is that the costs of the facilities and services provided to achieve interconnection between the parties' respective systems should be borne by each party.
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Bell's position is that all costs of its facilities and services provided to achieve interconnection between the parties' respective systems should be recovered through tariffs charged to Cantel. Costs incurred by Cantel to achieve such interconnection should be borne by Cantel.
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Point 2. Central Office Codes
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Cantel's position is that it has the right, independent of Bell, to one or more discrete central office (NXX) codes in each Bell Rate Centre where interconnection occurs.
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Bell's position is that Cantel should only be allocated NXX codes in Wire Centres where forecasts of its requirements so warrant. Telephone numbers in other Wire Centres should be allocated in blocks of 100.
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The Commission also invited comment on proposed tariffs for the interconnection of cellular radio systems with the PSTN which had been submitted by Bell, B.C. Tel and Cantel. Moreover, in Public Notice 1984-55, the Commission determined that Cantel and any telephone company affiliate licensed to provide cellular radio service are "companies" within the definition in section 320(1) of the Railway Act and are therefore subject to the jurisdiction of the Commission. Further, the Commission determined that, pursuant to section 320(3) of the Railway Act, both Cantel and any arm's length telephone company affiliate may charge tolls to the public for cellular radio service for which tariffs have not been filed.
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Parties responding to Public Notice 1984-55 were: Bell; Bell Cellular Division of Bell Communications Systems Inc. (Bell Cellular); B.C. Tel; Canadian Independent Telephone Association; Cantel; CNCP Telecommunications; Consumers Association of Canada; Director of Investigation and Research, Combines Investigation Act; Government of Ontario; KVA Communications and Electronics; Manitoba Telephone System; New Brunswick Telephone System; and Telesat Canada.
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CONCLUSIONS
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Costs of Interconnection
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Having reviewed the 16 July 1984 status reports of Bell and Cantel on the two points of difference and the comments and replies of all interested parties in this proceeding, the Commission has not been persuaded that the manner of compensation for cellular system interconnection contemplated by Decision 84-10 should be altered.
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In that decision, Cantel and any telephone company affiliate were to be charged tariffed rates for interconnecting services and facilities provided by Bell or B.C. Tel. The principles of compensation for access to Bell's and B.C. Tel's PSTN, by competitive communications systems, whether or not these are considered "companies" within the meaning of section 320(1), have been established in previous Commission decisions: CNCP Telecommunications: Interconnection with Bell Canada, Telecom Decision CRTC 79-11, 17 May 1979; Colins Inc. et al v. Bell Canada: Final Rates, Telecom Decision CRTC 80-16, 29 August 1980 (Decision 80-16); and CNCP Telecommunications: Interconnection with the British Columbia Telephone Company, Telecom Decision CRTC 81-24, 24 November 1981. The manner of compensation for the interconnection of services and facilities contemplated in Decision 84-10 is consistent with these earlier decisions, none of which required corresponding payments to be made to the party interconnecting with Bell's or B.C. Tel's PSTN.
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While the Commission has found Cantel to be a "company" as defined in the Railway Act, the Commission considers Cantel's mandate and circumstances to be significantly different from those relating to telephone companies such as Bell, B.C. Tel or provincially regulated telephone companies. These companies interchange traffic across discrete boundaries and have, as a matter of regulatory policy, an objective to offer universal public telephone service at affordable rates. Cantel, on the other hand, is licensed to provide a specialized form of telephone service within specified areas already receiving basic exchange service from conventional telephone companies. In the opinion of the Commission, while Cantel's competitive service is dependent on interconnection to Bell's or B.C. Tel's PSTN, and such interconnection has been found to be in the public interest, it would not be in the public interest for the general body of Bell or B.C. Tel subscribers to assume the costs associated with achieving such interconnection. In light of the foregoing, the Commission denies Cantel's proposed tariff for Wireline Access Service. Further, the Commission denies Cantel's request that the Commission issue orders to Bell and B.C. Tel in support of Cantel's position.
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Central Office Codes
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Having considered the arguments of the parties concerning the assignment of, and payment for, telephone numbers, the Commission considers the position of Bell, as set out in its 16 July 1984 status report, to be reasonable and consistent with previous Commission decisions.
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In Decision 80-16, the Commission set rates for blocks of 100 telephone numbers and associated outpulsing based on the causal costs associated with this service and including a contribution to fixed common costs. Further, in Decision 84-10, the Commission included rates for telephone numbers and associated outpulsing as one of the rate elements to be included in Bell and B.C. Tel proposed tariffs for interconnection of cellular systems. In addition, Bell and B.C. Tel were directed to negotiate with Cantel and any telephone company affiliate and to develop proposed cost-based rates for discrete central office codes. The Commission continues to be of the view that cellular operators, requiring telephone numbers and associated outpulsing, should provide appropriate compensation for these.
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With regard to the assignment of discrete NXX codes, the Commission notes Bell's willingness to do so where forecasts of Cantel's requirements so warrant. Given the need to administer and utilize such codes efficiently, the Commission finds Bell's position to be reasonable provided that forecasts of demand are based on five year projections so as to reflect the longer term requirements of cellular providers. Further, the Commission finds that Bell's approach is not discriminatory in that Bell Cellular would be subject to the same terms and conditions in regard to telephone numbers as Cantel.
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Bell Tariff
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The Commission notes the concern expressed by some interested parties that the start-up of cellular radio service not be unduly delayed. In order to ensure that there is no delay in the commencement of service arising from the absence of an approved tariff, the Commission approves, on an interim basis, as hereinafter set out, tariff revisions filed under Bell's Tariff Notice 1373 providing for the introduction of Cellular Access Service. In order to assist it in establishing final rates, the Commission intends to address a number of interrogatories to Bell regarding the methodology employed for developing its tariff and the costs associated with each rate element in its tariff, to ensure that the proposed rates are appropriate. The Commission intends to provide interested parties to this proceeding with a further opportunity to comment on Bell's Tariff Notice 1373 in light of its responses to the CRTC interrogatories.
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While this process may result in final rates that differ from those approved on an interim basis, the Commission considers that the decisions made herein should remove the major obstacles preventing Bell, Bell Cellular and Cantel from reaching agreement on interconnection. Moreover, the Commission expects that final rates will be in place prior to the commencement of cellular service. However, if charges are imposed on the basis of the interim rates approved in this decision, the final rates are to be applied retroactively, once approved.
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With regard to proposed rates for blocks of 100 telephone numbers and associated outpulsing, Bell is directed to charge, on an interim basis, rates under General Tariff Item 4190(5), pending disposition by the Commission of Bell's Tariff Notice 1375 for Telephone Number Access Service. For the digital access channel, Bell is directed to charge, on an interim basis, the same rates as those set out in its Tariff Notice 1374 for Megaroute service, pending disposition of that proposed tariff by the Commission.
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Further Directions
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In Decision 84-10, the Commission directed Bell to enter into negotiations with Bell Cellular and Cantel to develop cost-based rates for an entire NXX code. Such rates should take account of the specific technology associated with cellular service and any economies resulting from the application of an entire NXX code to a single user. In developing cost-based rates for an entire NXX code, Bell, Bell Cellular and Cantel should consult regarding the appropriate method of reserving numbers where the demand for an entire NXX code is likely to arise over a number of years. These parties are directed to enter into such negotiations and Bell is directed to file proposed rates for an entire NXX code on or before 1 April 1985. A copy of this filing should also be served on all parties to this proceeding. These parties will be permitted 30 days to comment on the proposed rates.
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In order to avoid delays in pre-service operational testing, Bell is directed to develop jointly with Bell Cellular and with Cantel interim technical specifications for interconnection to remain in force until final specifications are developed by the Department of Communications. If an agreement on interim specifications cannot be completed prior to the commencement of testing, parties should so inform the Commission and include their recommendations for interim specifications.
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With regard to the interconnection of cellular systems to the B.C. Tel PSTN, it is the intention of the Commission to deal with this matter at the time it disposes of B.C. Tel's Tariff Notice 988 for the interconnection of all public mobile radio systems.
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Fernand Bélisle
Secretary General
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