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Telecom Public Notice
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Ottawa, 3 August 1990
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Telecom Public Notice CRTC 1990-73
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UNITEL COMMUNICATIONS INC. AND B.C. RAIL TELECOMMUNICATIONS/LIGHTEL INC. - APPLICATIONS TO PROVIDE PUBLIC LONG DISTANCE VOICE TELEPHONE SERVICES AND RELATED RESALE AND SHARING ISSUES: SCOPE AND PROCEDURE
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I APPLICATION BY UNITEL COMMUNICATIONS INC.
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On 16 May 1990, Unitel Communications Inc. (Unitel) applied to the Commission for the interconnection of its network with the public switched telephone networks of Bell Canada (Bell), British Columbia Telephone Company (B.C. Tel), The Island Telephone Company Limited, Maritime Telegraph and Telephone Company, Limited, The New Brunswick Telephone Company, Limited (NBTel), and Newfoundland Telephone Company Limited (Nfld Tel) (referred to collectively as the Unitel respondents), for the purposes of providing public long distance voice telephone services, i.e., Message Toll Service (MTS) and Wide Area Telephone Service (WATS).
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In a letter to Unitel and the Unitel respondents dated 23 May 1990, the Commission set out procedures governing any requests for particulars that the Unitel respondents might wish to address to Unitel with respect to its application. Pursuant to that letter, the Unitel respondents filed requests for particulars, Unitel filed objections to answering certain of those requests, and the Unitel respondents filed replies. By letter dated 27 June 1990, the Commission determined that particulars were to be provided, with the exception of those regarding Unitel's business plan and related information, and specifics on contribution payments to the Unitel respondents. The Commission also determined that the remaining information requested, including Unitel's business plan, should be provided at a later date, along with Unitel's evidence. Unitel filed particulars on 10 July 1990.
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By letter dated 14 June 1990, Unitel requested that it be permitted to address interrogatories to the Unitel respondents and submitted copies of its proposed interrogatories. By letter dated 20 June 1990, the Commission established procedures to permit the Unitel respondents to file objections to Unitel's proposed interrogatories, and Unitel to file a reply thereto. Following receipt of those submissions, the Commission determined, by letter dated 6 July 1990, that the Unitel respondents were to provide responses to Unitel's interrogatories, except those dealing with some specifics on local calling. The Unitel respondents filed their responses on 27 July 1990.
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Pursuant to the Commission's letter of 23 May 1990, the Unitel respondents filed their answers to Unitel's application on 20 July 1990 and Unitel filed its reply on 30 July 1990.
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In Unitel Communications Inc. - Application to Provide Public Long Distance Telephone Service: Scope of Proceeding, CRTC Telecom Public Notice 1990-57, 11 June 1990 (Public Notice 1990-57), the Commission sought comment from interested persons with respect to the issues that should be considered in this proceeding. The Commission also set out certain proposals on the scope of the proceeding that it had received from Bell and B.C. Tel in letters dated 4 June 1990.
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In response to Public Notice 1990-57, the Commission received a wide range of suggestions regarding the scope of the proceeding. Some of those who commented suggested dealing exclusively with Unitel's application. Others recommended consideration of alternatives to Unitel's application, as well as related issues, including: (1) rate adjustments within the context of the existing MTS/WATS market structure, (2) an expanded role for resellers, and (3) a fully competitive environment.
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Many of those who commented also proposed that the Commission examine the regulatory rules that should apply in a competitive market. As well, some submitted that there was a need for a detailed examination of the technical and economic framework governing the terms and conditions of interconnection.
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Some who commented suggested that, prior to considering the Unitel application, the Commission hold a generic proceeding regarding issues related to competition and, if competition is found to be in the public interest, establish criteria for assessing specific applications.
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Finally, the Commission also received suggestions regarding matters of procedure, including suggestions that the Commission conduct formal hearings, involving cross-examination of sworn witnesses, not only in Hull but also in Vancouver and elsewhere.
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II APPLICATION BY B.C. RAIL TELECOMMUNICATIONS AND LIGHTEL INC.
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On 30 July 1990, the Commission received a joint application from B.C. Rail Telecommunications (B.C. Rail) and Lightel Inc. (Lightel) (referred to collectively as BCRL) for an order requiring Bell, B.C. Tel and Unitel (referred to collectively as the BCRL respondents) to connect BCRL's telecommunications networks to the public switched telephone networks and to Unitel's telecommunications network for the purpose of providing dedicated voice and data telephone service and MTS/WATS.
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BCRL requested that the Commission permit its application to be considered in the same proceeding as Unitel's application. BCRL submitted, among other things, that its application raises substantially the same issues of legal, public and regulatory policy as does Unitel's. BCRL stated that it does not wish to delay the Unitel application or disturb the Commission's contemplated time frame for reaching a decision on the issue of interexchange competition.
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III SCOPE OF THE PROCEEDING
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The Commission considers it important to dispose of Unitel's application as expeditiously as possible. Furthermore, in the Commission's view, consideration of the Unitel application will provide an appropriate context for a focused and detailed examination of the social, technical and economic issues associated with various entry scenarios. Accordingly, the Commission does not consider it appropriate or necessary to conduct a generic proceeding on interexchange competition before dealing with Unitel's application.
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The Commission notes BCRL's submission that its application raises substantially the same issues of legal, public and regulatory policy as Unitel's application. At BCRL's request, the Commission is prepared to include consideration of BCRL's application in this proceeding. However, the Commission is not prepared to countenance delays in considering either Unitel's application or the issues set out in this public notice.
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Accordingly, in order not to prejudice timely consideration of the other matters in this proceeding, it is essential that BCRL comply with the procedures set out in Part V of this public notice, commencing with the requirement for it to file and serve its evidence, including its business plan, by 24 August 1990.
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Given the above considerations, in the Commission's judgment it would be extremely difficult to accommodate consideration of any further applications for the provision of public long distance voice telephone services in this proceeding.
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At the present time, the Commission's resale and sharing rules, as set out in Resale and Sharing of Private Line Services, Telecom Decision CRTC 90-3, 1 March 1990 (Decision 90-3), do not apply in the territories of those of the Unitel respondents operating in the Atlantic provinces. The Commission has before it an application from Call-Net Telecommunications Inc. (Call-Net) to allow resale and sharing in the territories of those companies on the basis of the rules set out in Decision 90-3. Marathon Telecommunications Corp. also requested that the Commission liberalize the resale and sharing rules in those territories. In their answers to Call-Net's application, NBTel and Nfld Tel noted the relationship between the question of resale and sharing and the issues raised by Unitel's application. In its reply, Call-Net argued that the Unitel application does not raise the issue of resale of private line services and, therefore, consideration of Call-Net's application should not be delayed in the expectation that the relevant issues will be dealt with in the Unitel proceeding.
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The Commission considers that Unitel's application and the question of resale and sharing in the Atlantic provinces raise related issues and, therefore, should not be considered in isolation. Accordingly, the Commission intends, in this proceeding, to determine whether or not the resale and sharing rules set out in Decision 90-3 should apply in the territories of the four Unitel respondents operating in the Atlantic provinces.
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Some of those who commented in response to Public Notice 1990-57 noted that Unitel proposes to resell WATS. They submitted that Unitel's application raises the question of whether current restrictions on the resale of WATS should be liberalized. The Commission is of the view that Unitel's application and the question of the resale of WATS raise related issues and should be considered together. The Commission therefore concludes that the current proceeding is the appropriate forum in which to determine whether or not to liberalize the resale of WATS in the operating territories of the respondents.
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Unitel submits that approval of its application would result in lower long distance rates and generate the benefits commonly associated with competitive markets. Some of the comments received in response to Public Notice 1990-57 suggested consideration of alternative scenarios for lowering long distance rates, such as rate rebalancing in the existing MTS/WATS environment and open market entry.
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The Commission considers that the focus of this proceeding should be the impact of market entry by Unitel and/or BCRL, and the related issues of resale and sharing set out above. However, in order for the Commission to determine if approval of the applications, or of more liberal resale, is in the public interest, it will be necessary to compare the advantages and disadvantages of various scenarios for lowering long distance rates. In this context, the Commission invites interested persons to address the advantages and disadvantages associated with the market scenarios set out below:
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(1) the approval of Unitel's and/or BCRL's applications, and
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(2) alternative market scenarios, including:
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(a) existing MTS/WATS environment;
(b) extension of Decision 90-3 resale and sharing rules to the Atlantic provinces;
(c) resale of WATS; and
(d) multiple entry by facilities-based carriers.
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The Commission notes that the scenarios in (1) and (2) above will be considered individually and in various combinations. While the Commission intends to assess the advantages and disadvantages of all scenarios, it does not intend to consider, as part of this proceeding, other applications to offer competing public long distance voice services or specific applications for rate rebalancing.
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IV ISSUES
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A. Introduction
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In Interexchange Competition and Related Issues, Telecom Decision CRTC 85-19, 29 August 1985 (Decision 85-19), the Commission found that a number of benefits could arise from competition in the MTS/WATS market, including lower rates, increased productivity, greater customer choice and supplier responsiveness, innovation and flexibility in the pricing and marketing of interexchange services and a more rapid diffusion of new technology. However, based on its assessment of the application, including the business plan, filed by Unitel's predecessor, CNCP Telecommunications (CNCP), the Commission considered that approval of CNCP's application would not yield these benefits to a significant extent throughout the territories served by Bell and B.C. Tel. Interested persons are invited to address the issues set out below, taking into account the findings in Decision 85-19.
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B. Impact of Competition
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Interested persons are invited to indicate the advantages and disadvantages associated with either or both of the applications and with the alternative market scenarios, both with and without rate restructuring by the respondents, in terms of their impact on, among other things, the following:
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(1) the revenues of the respondent telephone companies;
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(2) rates for interexchange services and the practice of route averaging;
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(3) affordability and accessibility of local service;
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(4) regional differences and different classes of subscribers, such as rural, urban, residence and business;
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(5) telephone companies' obligation to serve;
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(6) non-respondent telephone companies and their subscribers;
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(7) the long-run costs of supplying telecommunications services;
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(8) the efficiency of telecommunications network planning and design;
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(9) service quality and choice, supplier responsiveness, innovation, research and development, and supplier efficiency;
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(10) international competitiveness of Canadian business; and
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(11) bypass of Canadian network facilities.
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C. Regulatory Regime
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Interested persons are requested to comment on the regulatory regime that would be required to maximize any advantages and reduce any disadvantages associated with approval either or both of the applications and with the alternative market scenarios. Comments are requested, in particular, on the following:
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(1) the general rules governing the treatment of competitors and existing suppliers in the MTS/WATS market, bearing in mind that the Commission does not have the legal authority to forbear from regulation at this time;
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(2) alternative types of interconnection, including equal access, that could technically be provided and the implications for network costs;
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(3) access to other tariffed services or non-tariffed features of the network, such as billing and collection, operator and directory services, network support services and other operational capabilities, including access to data bases;
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(4) the basis for rates to be paid for interconnection and their relationship to costs, existing tariffs and quality of interconnection;
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(5) the type and level of contribution payments, if any; and
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(6) other mechanisms to mitigate any impact on the provision of universally affordable and accessible service.
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D. Issues not Included
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The Commission considers that the preceding list of issues encompasses most of the comments received in response to Public Notice 1990-57. However, the Commission has determined that certain other issues should not be included in this proceeding. Such issues include: (1) the monopoly of Teleglobe Canada Inc. (Teleglobe) in the provision of overseas services, (2) resellers' arrangements with Teleglobe, (3) local measured service, (4) public pay telephones with access to the local public switched telephone network, (5) local service competition in general, including provision of cable television distribution services by telephone companies, and (6) the certification of switching equipment, as discussed in Decision 90-3. Finally, as stated above, the Commission does not intend in this proceeding to consider other applications to offer competing public long distance voice services or specific applications to rebalance rates.
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V PROCEDURE
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1. In this proceeding, the Commission will consider issues relating to questions of market structure that have significant implications both for carriers subject to regulation by the Commission and for carriers subject to regulation by other authorities. Therefore, as in the proceeding leading up to Decision 85-19, the Commission invites the participation of federal, provincial and territorial departments and agencies concerned with telecommunications regulatory policy and of telecommunications common carriers that are not respondents in this proceeding, as well as that of other interested persons and organizations.
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2. Persons wishing to receive copies of Unitel's or BCRL's applications, replies and evidence, or the answer and evidence of any Unitel or BCRL respondent, should write to the originator of the material at the address set out in paragraph 34. Unitel, BCRL and respondents are to provide the information requested as soon as possible.
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3. The central public hearing in this proceeding will be held in Hull, Quebec, and is scheduled to commence in April 1991.
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Persons wishing to participate in this formal hearing (interveners) must file a notice of intention to participate with the Commission, serving copies on Unitel, BCRL and on the Unitel respondents, by 14 September 1990. Addresses for service are set out in paragraph 34.
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Unitel, BCRL, respondents and interveners will be considered parties to the proceeding. The Commission will distribute a full list of parties along with their mailing addresses.
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4. In order to assist interveners in addressing interrogatories by the date specified in paragraph 8, forthwith upon receipt of a notice of intention to participate:
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Unitel is directed to serve on interveners copies of its application, particulars, reply and, once filed, its evidence (including its business plan).
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Each Unitel respondent is directed to serve on interveners copies of its answer and its responses to Unitel's 14 June 1990 interrogatories.
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BCRL is directed to serve on interveners copies of its application and, once filed, its evidence (including its business plan).
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5. The Commission anticipates that some persons will wish to make informal oral representations with respect to the applications or issues relevant to the proceeding without having to participate in the central hearing. In view of this, the Commission has decided to provide such persons with an opportunity to make oral representations in a less formal setting than the April 1991 central hearing, without the necessity of filing written evidence in advance or of being available for cross-examination.
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Accordingly, the Commission intends to conduct additional hearings, prior to the central hearing, in the territory of each of the Unitel respondents. Unitel, the respondent in question, and BCRL in Bell and B.C. Tel territory, will be directed to send senior representatives to the additional hearings to provide points of clarification. The record of the additional hearings will form part of the record of the proceeding.
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6. Persons who wish to comment on the applications or on issues relevant to the proceeding may also do so by writing to the Commission prior to the completion of the central hearing.
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7. By 24 August 1990, remaining particulars and evidence to be submitted by Unitel in support of its application, including its business plan, must be filed with the Commission and served on other parties.
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By 24 August 1990, evidence to be submitted by BCRL in support of its application, including it business plan, must be filed with the Commission and served on other parties.
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8. Parties may address interrogatories to Unitel with respect to its application and its evidence filed pursuant to paragraph 7.
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Parties may address interrogatories to BCRL with respect to its application and its evidence filed pursuant to parapraph 7.
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Any such interrogatories are to be filed with the Commission and served on Unitel and/or BCRL, as appropriate, by 14 September 1990.
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9. Unitel and BCRL are to file responses to such interrogatories, serving copies on all other parties, by 12 October 1990.
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10. Parties may file, with respect to the responses noted in paragraph 9, requests for public disclosure of information for which confidentiality has been claimed, setting out the reasons for disclosure, and, with respect to responses to their own interrogatories, requests for further responses, specifying why a further response is both relevant and necessary. Any such requests must be filed with the Commission and served on Unitel and/or BCRL, as appropriate, by 19 October 1990.
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11. Replies to requests for public disclosure and to requests for further responses must be filed with the Commission and served on the party making the request by 26 October 1990.
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12. The Commission will issue a decision with respect to requests for disclosure and for further responses as soon as possible. The Commission intends to direct Unitel and BCRL to file any material required by that decision, serving copies on all other parties, by 9 November 1990.
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13. Each BCRL respondent may, by 20 November 1990, file its answer to BCRL's application, serving copies on all other parties.
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14. Each Unitel and BCRL respondent may file evidence in support of its answer and with respect to the issues set out in this public notice, serving copies on all other parties, by 30 November 1990.
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15. Unitel and BCRL may file evidence with respect to the issues set out in this public notice, serving copies on all other parties, by 30 November 1990.
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16. BCRL may, by 30 November 1990, file a reply to the answers filed by the BCRL respondents pursuant to paragraph 13, serving copies on all other parties.
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17. Parties may address interrogatories to the respondents concerning their answers, their evidence filed pursuant to paragraph 14 and any issues set out in this public notice. Parties may address interrogatories to Unitel with respect to its evidence filed pursuant to paragraph 15 and any issues set out in this public notice.
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Parties may address interrogatories to BCRL with respect to its evidence filed pursuant to paragraph 15 and reply and the issues set out in this public notice.
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Any such interrogatories must be filed with the Commission and served on the party to whom they are addressed by 28 December 1990.
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18. Unitel, BCRL and the respondents are to file responses to any such interrogatories, serving copies on all other parties, by 25 January 1991.
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19. Any party may file, with respect to the responses noted in paragraph 18, requests for public disclosure of information for which confidentiality has been claimed, setting out the reasons for disclosure, and, with respect to the responses to its own interrogatories, requests for further responses, specifying why a further response is both relevant and necessary. Any such requests must be filed with the Commission and served on the party to whom they are addressed by 1 February 1991.
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20. Replies to requests for public disclosure and to requests for further responses must be filed with the Commission and served on the party who made the request by 8 February 1991.
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21. The Commission will issue a decision with respect to any such requests as soon as possible. The Commission intends to direct parties to file any material required by that decision, serving copies on all other parties, by 22 February 1991.
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22. Interveners wishing to file evidence may do so, serving copies on all other parties, by 4 March 1991.
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23. Parties may address interrogatories with respect to evidence filed pursuant to paragraph 22. Any such interrogatories are to be filed with the Commission and served on the intervener to whom they are addressed by 25 March 1991.
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24. The Commission will conduct a pre-hearing conference to settle all outstanding preliminary matters and issues with respect to this proceeding, including the organization and conduct of the central hearing. The conference has been scheduled to begin at 9:30 a.m., 8 April 1991, in the Outaouais Room of the Conference Centre, Phase IV, Place du Portage, Hull, Quebec. The Commission will distribute an agenda for the conference prior to its commencement.
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25. The Commission expects to issue, as soon as possible thereafter, an oral ruling on matters arising out of the pre-hearing conference, including the order in which evidence will be presented and the order of cross-examination.
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26. The central hearing is scheduled to begin at 9:30 a.m., 15 April 1991, also in the Outaouais Room of the Conference Centre.
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27. Interveners' responses to interrogatories addressed pursuant to paragraph 23 must be filed with the Commission and served on all other parties by the commencement of the central hearing on 15 April 1991.
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28. Any party may file, with respect to the responses noted in paragraph 27, requests for public disclosure of information for which confidentiality has been claimed, setting out the reasons for disclosure, and, with respect to the responses to its own interrogatories, requests for further responses, specifying why a further response is both relevant and necessary. Any such requests must be filed with the Commission and served on the party to whom they are addressed by 22 April 1991.
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29. In the event that requests are made pursuant to paragraph 28, the Commission will establish a procedure for dealing with them at the central hearing.
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30. Opportunity will be provided for rebuttal evidence, final argument and reply argument in a manner to be determined by the Commission in the course of the hearing.
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31. Where a document is to be filed or served by a specific date, the document must be actually received, not merely mailed, by that date.
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32. The Commission reminds all parties that claims for confidentiality should be accompanied by a detailed explanation as to why it is considered that specific direct harm would likely result from disclosure of the information in question. Parties are also reminded that, where confiden- tiality is claimed, abridged versions, abridging only that information considered confi- dential, must be provided for the public file. Where an abridged version is not provided, detailed reasons must be given.
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33. Unitel's application, BCRL's application and other documents filed in this proceeding can be examined at the business offices of Unitel, B.C. Rail or Lightel, or at the offices of the CRTC in the following locations:
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Room 201
Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage
Hull, Quebec
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Suite 1007
Bank of Commerce Building
1809 Barrington Street
Halifax, Nova Scotia
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Complex Guy-Favreau
200 René-Lévesque Blvd. West
6th Floor
East Tower
Montréal, Quebec
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275 Portage Avenue
Winnipeg, Manitoba
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Suite 1500
800 Burrard Street
Vancouver, British Columbia
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34. The mailing addresses to be used in connection with this proceeding are set out below:
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Mr. Alain-F. Desfossés
Secretary General
CRTC
Ottawa, Ontario
K1A 0N2
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Mr. Michael H. Ryan
Vice-President, Law, and General Counsel
Unitel Communications Inc. 3300 Bloor Street West
Toronto, Ontario
M8X 2W9
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Mr. Tom Elliott
President,
Lightel Inc.
105 Gordon Baker Road
5th Floor
Willowdale, Ontario
M2H 3P8
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Mr. Peter J. Knowlton
Assistant General Counsel
Bell Canada
25 Eddy Street
4th Floor
Hull, Quebec
J8X 4B5
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Ms. Dorothy E. Byrne
Vice-President
Legal and Regulatory Matters
British Columbia Telephone Company
3777 Kingsway
Burnaby, British Columbia
V5H 3Z7
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Mr. D.W. McLane
Vice-President
Customer Services
The Island Telephone Company Limited
P.O. Box 820
Charlottetown, P.E.I.
C1A 7M1
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Mr. C.D. Dexter
Regulatory Affairs Manager
Maritime Telegraph and Telephone Company, Limited
P.O. Box 880
Halifax, Nova Scotia
B3J 2W3
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Mr. H.S. Mercer
Director
Business Planning and Regulatory Matters
The New Brunswick Telephone Company, Limited
P.O. Box 1430
Saint John, New Brunswick
E2L 4K2
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Mr. Donald R. Tarrant
General Manager
Rates and Regulatory Matters
Newfoundland Telephone Company Limited
Fort William Building
P.O. Box 2110
St. John's, Newfoundland
A1C 5H6
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Alain-F. Desfossés
Secretary General
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