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Ottawa, 28 March 1990
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Telecom Decision CRTC 90-4
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ROGERS CANTEL INC. - INTERCONNECTION WITH NEWFOUNDLAND TELEPHONE COMPANY LIMITED
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I THE APPLICATION
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On 3 November 1989, Rogers Cantel Inc. (Cantel) filed an application requesting that the Commission order Newfoundland Telephone Company Limited (Nfld Tel), on an interim and final basis, to allow Cantel to connect its cellular radio telephone network with Nfld Tel's public switched telephone network (PSTN). Pursuant to section 336(1) of the Railway Act, Cantel sought orders permitting interconnection on the terms and conditions set out in Radio Common Carrier Interconnection With Federally Regulated Telephone Companies, Telecom Decision CRTC 84-10, 22 March 1984 (Decision 84-10), and in Cellular Radio Service, Telecom Decision CRTC 84-29, 19 December 1984 (Decision 84-29). Alternatively, Cantel sought orders pursuant to section 275(1) of the Railway Act and sections 49 and 50 of the National Telecommunications Powers and Procedures Act for all reasonable and proper facilities for the interchange of traffic, also on the terms and conditions specified in Decision 84-10 and Decision 84-29.
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Cantel stated that the development of cellular service since 1984 confirms the Commission's conclusion in Decision 84-10 that the interconnection of cellular service is in the public interest. Cantel submitted that interconnection with Nfld Tel would allow it (1) to provide service to Newfoundland in accordance with Cantel's licence from the federal Department of Communications (DOC), (2) to extend its network coverage in Atlantic Canada, (3) to provide more national coverage for Canadians travelling to and from Newfoundland, and (4) to construct a truly national network.
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Cantel stated that it is a condition of its licence that it provide cellular service to 23 Metropolitan Areas (MAs) in Canada by the middle of 1990. Cantel stated that St. John's, Newfoundland, is one of those 23 MAs and one of only two specified MAs yet to be served during Cantel's current five-year licence.
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Cantel stated that it had requested interconnection with Nfld Tel three times in the past five years, but that Nfld Tel has failed to file tariffs or to conclude an interconnection arrangement with it.
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II NFLD TEL'S ANSWER
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In its answer to Cantel's application, Nfld Tel stated that interconnection is best achieved through negotiation between the two parties. Nfld Tel submitted that it had responded negatively to Cantel in 1983 and in 1985 because, according to its assessment, demand for cellular radio service and interest in it was years away. Nfld Tel stated that, since Cantel did not pursue its enquiries further with either the company or the Board of Commissioners of Public Utilities of Newfoundland, St. John's and Newfoundland were not then a priority for Cantel. Nfld Tel submitted that Cantel's present interest in St. John's is solely a result of its licensing commitment to serve St. John's by 30 June 1990.
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Nfld Tel indicated that, by letter dated 3 October 1989, it had proposed a meeting to discuss Cantel's request, but that Cantel had launched its application to the Commission before responding to that proposal. Nfld Tel stated that it plans to introduce cellular service in the province on an "equal start" basis with Cantel. To this end, Nfld Tel indicated that it is ready and willing to begin meaningful negotiations with Cantel to achieve the mutually satisfactory introduction of cellular radio service in Newfoundland. Nfld Tel submitted that the Commission should therefore dismiss or defer Cantel's application so that the parties can initiate negotiations.
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Nfld Tel argued that the circumstances of its network and its subscribers are distinct from those of British Columbia Telephone Company (B.C. Tel) and Bell Canada (Bell), the two companies addressed in Decision 84-10 and Decision 84-29. Nfld Tel also argued that the terms and conditions of interconnection with its network will not necessarily be the same as those previously approved by the Commission.
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Nfld Tel stated that, in Bell and B.C. Tel territory and in most other jurisdictions, Cantel negotiated with the telephone company in question and agreed upon most, and sometimes all, of the terms and conditions of interconnection. Accordingly, those terms and conditions vary from jurisdiction to jurisdiction across Canada. Nfld Tel stated that the appropriate process would be for Cantel to nego-tiate terms and conditions with it.
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Nfld Tel stated that it could develop cost-based access rates to accommodate a starting date of 30 June 1990. The company submitted that the absence of such rates is not a reason for the Commission to issue an interim order or to order access based on interim rates. Nfld Tel acknowledged that cellular service should be introduced in Newfoundland. It stated that, if the parties can negotiate terms and conditions, including an acceptable starting date, both could initiate service before 30 June 1990.
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Nfld Tel submitted that, if the Commission is not prepared to defer or dismiss the application, it should be dealt with in a full and complete public proceeding.
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III CANTEL'S REPLY
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In reply, Cantel noted that, with the exception of New Brunswick, it did not achieve interconnection in any other jurisdiction through negotiation. Cantel noted that the terms of interconnection with various telephone companies had been established by various means, including provincial order-in- council and municipal by-law. Cantel noted that, in the Commission's jurisdiction, negotiations between it and Bell and B.C. Tel took place only after the issuing of Decision 84-10, and within the broad framework established in that decision.
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Cantel submitted that Decisions 84-10 and 84-29 should form the basis for any negotiations between Nfld Tel and itself, since they contain the principles upon which interconnection between Cantel and federally regulated telephone companies has been sanctioned by the Commission. Cantel further submitted that, once the principles set forth in the two decisions are accepted, there is little of a contentious nature left to negotiate, other than specific rate levels.
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Cantel did not deny that the terms and conditions of cellular interconnection vary from jurisdiction to jurisdiction. Cantel submitted that this is not a good situation for any carrier attempting to offer a national telecommunications service. Cantel submitted that, in light of the Supreme Court of Canada's decision in the Alberta Government Telephones case and statements by the Minister of Communications concerning a national telecommunications policy, "it makes no sense to perpetuate the fragmentation and confusion".
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While Cantel acknowledged that not all of the Commission's decisions should be applied automatically to Nfld Tel, it argued that the onus should lie with Nfld Tel to justify any departures.
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Cantel contended that, in asserting that Cantel's only motivation with respect to the present application is to fulfil its licensing commitment to DOC, Nfld Tel is ignoring Cantel's earlier requests for interconnection arrangements. Cantel stated that, if Nfld Tel had granted those earlier requests, Newfoundland might have been one of the first provincial jurisdictions to receive cellular service. Cantel also stated that its licensing commitment has always been subject to obtaining suitable interconnection arrangements.
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Cantel stated that it was not prepared to commit to delaying its initiation of service until six months after interconnection has been approved on an interim or final basis. Cantel contended that, unlike itself, Nfld Tel has been in a position to start construction of its own cellular network with the knowledge of exactly when and where it would permit itself interconnection. Cantel argued that the DOC requirement that the telephone company wait until six months after the approval of interconnection to begin service was meant to help overcome this disadvantage. Cantel stated that it would require the six-month period following interim or final approval of Nfld Tel's access tariffs and rates in order to start service on an equal footing with Nfld Tel.
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In its application, Cantel requested that the Commission direct Nfld Tel to develop cost-based rates for the services and facilities necessary for interconnection. Cantel also requested that, pending the approval of cost-based rates, the Commission issue interim orders requiring Nfld Tel to interconnect with Cantel on the terms and conditions and at the rates set out in the current Bell tariff for Cellular Access Service. Cantel proposed that, if final rates are not approved prior to 30 June 1990 (Cantel's proposed service commencement date), there be an accounting as to the difference between the interim and final rates for the period between 30 June and the date that final rates are approved. Cantel indicated such an approach would be consistent with that adopted by the Manitoba Public Utilities Board.
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In light of Nfld Tel's expressed interest in introducing cellular service in Newfoundland, its ability to introduce cost-based rates and its willingness to negotiate with Cantel, Cantel proposed the following in its reply:
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(1) that Nfld Tel be directed to file, within 30 days, cost-based rates for cellular access service and facilities;
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(2) that Nfld Tel be directed to show cause within 30 days why any of the terms and conditions in Decisions 84-10 and 84-29 should not apply to it;
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(3) that Nfld Tel be directed to begin immediately to negotiate terms and conditions of interconnection with Cantel, based on the principles contained in Decisions 84-10 and 84-29; and
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(4) that Nfld Tel and Cantel be directed to identify to the Commission, within 45 days of the Commission's order, any terms and conditions of interconnection (other than those specified in paragraph (2) above) on which they have not reached agreement.
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IV CONCLUSIONS
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Nfld Tel has indicated that it is not opposed to interconnection per se and that it is prepared to develop cost-based rates, but that specific terms and conditions must be addressed, particularly matters of timing and rates. Consistent with its previous finding with respect to cellular interconnection, the Commission finds that the inter-connection of Cantel's network with the Nfld Tel PSTN would be in the public interest. Moreover, the Commission considers it desirable to assure the introduction of cellular service in Newfoundland on a timely basis.
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Until some form of interconnection arrangement has been approved by the Commission, Cantel will be unable to proceed with plans to begin service, and Newfoundland residents will be denied access to cellular service. Nfld Tel suggests that any interconnection agreement be obtained through negotiation. However, negotiations, in and of themselves, will not ensure the introduction of cellular service in Newfoundland on a timely basis. On the other hand, the Commission is not persuaded that the 30-day period suggested by Cantel would permit Nfld Tel sufficient time to develop and file appropriate cost-based rates.
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In light of the above, the Commission concludes that, if final rates are not approved prior to the commencement of service, the rates, terms and conditions of the Bell Canada Cellular Access Service tariff should be used on an interim basis for the interconnection of Cantel's network with the Nfld Tel PSTN. Once approved, final rates will be applied back to the date that service is commenced, and any necessary adjustments made.
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In the Commission's view, a number of benefits would be derived if the terms and conditions for cellular interconnection were similar for all telephone companies under its jurisdiction. However, the Commission also considers it essential that Nfld Tel be given a full opportunity to establish the extent to which its particular circumstances warrant any differences in the terms and conditions of interconnection within its operating territory.
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Accordingly:
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(1) Nfld Tel is directed to file, by 17 April 1990, proposed interim rates, terms and conditions for the interconnection of Cantel's network, using the Bell Canada Cellular Access Service tariff.
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(2) Nfld Tel and Cantel are directed to negotiate the final terms and conditions of interconnection, other than rates. Nfld Tel and Cantel are also directed to identify to the Commission, by 28 May 1990, any such terms and conditions on which they have not reached agreement. The Commission will adjudicate any outstanding issues.
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(3) Nfld Tel is directed to file, by 25 July 1990, proposed final rates for the cellular access service and facilities specified in paragraph 12 of Cantel's application of 3 November 1989.
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(4) With respect to the proposed final rates specified in paragraph (3) above, for services and facilities for which there is no comparable Nfld Tel general tariff offering, Nfld Tel is directed to develop and file cost-based rates; for those services and facilities for which there is a comparable Nfld Tel general tariff offering, Nfld Tel is directed (a) to file cellular access service tariffs that reference the comparable general tariff offering, or (b) to develop and file cost-based rates.
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Fernand Bélisle
Secretary General
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