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Ottawa, 13 October 1994
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Telecom Public Notice CRTC 94-44
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FORBEARANCE - SERVICES PROVIDED BY NON-DOMINANT CANADIAN CARRIERS
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I BACKGROUND
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In CNCP Telecommunications - Application For Exemption From Certain Regulatory Requirements, Telecom Decision CRTC 87-12, 22 September 1987 (Decision 87-12), the Commission approved the detariffing of all services offered by CNCP Telecommunications (CNCP), with the exception of Public Message Service and interconnected voice services (because of regulatory concerns unique to these services). In Decision 87-12, the Commission stated that it was not inappropriate to subject different groups of carriers to different regulatory regimes based on different circumstances. The Commission determined that CNCP was subject to competition in all areas of its business sufficient to make it unlikely that it could raise its prices to any significant degree without losing business; thus, it was not capable of materially cross-subsidizing any of its services with revenues from others.
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In 1989, the Federal Court of Appeal reversed Decision 87-12 in Telecommunications Workers' Union v. Canadian Radio-television and Telecommunications Commission and CNCP Telecommunications [1989], 2 F.C. 280, determining that the Commission lacked the power to forbear from regulating services over which it had jurisdiction.
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In October 1993, the Telecommunications Act (the Act) came into effect. Section 34 of the Act specifically empowers the Commission to forbear from regulation in the circumstances enumerated therein. Specifically, section 34 of the Act states as follows:
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34.(1) The Commission may make a determination to refrain, in whole or in part and conditionally or unconditionally, from the exercise of any power or the performance of any duty under sections 24, 25, 27, 29 and 31 in relation to a telecommunications service or class of services provided by a Canadian carrier, where the Commission finds as a question of fact that to refrain would be consistent with the Canadian telecommunications policy objectives.
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(2) Where the Commission finds as a question of fact that a telecommunications service or class of services provided by a Canadian carrier is or will be subject to competition sufficient to protect the interests of users, the Commission shall make a determination to refrain, to the extent that it considers appropriate, conditionally or unconditionally, from the exercise of any power or the performance of any duty under sections 24, 25, 27, 29 and 31 in relation to the service or class of services.
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(3) The Commission shall not make a determination to refrain ... if the Commission finds as a question of fact that to refrain would be likely to impair unduly the establishment or continuance of a competitive market for that service or class of services.
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The sections enumerated in section 34 can be summarized as follows:
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(1) section 24: the offering and provision of any telecommunications service by a Canadian carrier are subject to any conditions imposed by the Commission or included in a tariff approved by the Commission;
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(2) section 25: among other things, no Canadian carrier shall provide a telecommunications service except in accordance with a tariff filed with and approved by the Commission, specifying the rate or the maximum or minimum rate, or both, to be charged;
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(3) section 27: among other things, every rate charged by a Canadian carrier for a telecommunications service shall be just and reasonable, and the Canadian carrier shall not unjustly discriminate or give an undue or unreasonable preference in relation to the provision of a telecommunications service or the charging of a rate for it;
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(4) section 29: no Canadian carrier shall, without the prior approval of the Commission, give effect to any agreement or arrangement, whether oral or written, with another telecommunications common carrier respecting the interchange of telecommunications, the management or operation of facilities or the apportionment of rates or revenues; and
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(5) section 31: no limitation of a Canadian carrier's liability in respect of a telecommunications service is effective unless it has been authorized or prescribed by the Commission.
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Since the passage of the Act, the Commission has initiated a number of proceedings to consider forbearing from regulating various telecommunications services. The Commission has already issued decisions forbearing, with respect to various sections enumerated in section 34, from the regulation of (1) the outright sale of terminal equipment by Canadian carriers (see Telecom Decision CRTC 94-14, 4 August 1994), (2) the provision of mobile wireless services, unless offered directly by a telephone company (see Telecom Decision CRTC 94-15, 12 August 1994), and (3) the offering of Digital Video Compression Services by Telesat Canada (see Telecom Decision 94-20, 3 October 1994).
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In addition, in Review of Regulatory Framework, Telecom Decision CRTC 94-19, 16 September 1994 (Decision 94-19), the Commission found it appropriate to forbear, with limited exceptions, with respect to the sale, lease and maintenance of terminal equipment by the telephone companies subject to that Decision. In Decision 94-19, the Commission also detailed the factors that it will take into account when assessing whether a particular market is sufficiently competitive for the Commission to refrain from regulating that market pursuant to section 34.
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With this Public Notice, the Commission seeks comment regarding the appropriateness of forbearing from regulating the services of Canadian carriers, other than Teleglobe Canada Inc., Telesat Canada, mobile service providers and carriers that provide basic local telephone service. Specifically, the Commission seeks comment on the following:
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(1) are there any such carriers that have the ability to exercise market power with respect to services that they provide?
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(2) with respect to which services or classes of services provided by these carriers should the Commission refrain from exercising powers and performing duties?
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(3) for those services or classes of services identified in (2) above, which of the powers and duties enumerated in section 34 of the Act should the Commission refrain from exercising and performing?
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(4) for each power or duty, should the Commission refrain in whole or in part, conditionally or unconditionally?
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The Commission notes that, on 17 August 1994, it received a letter from Sprint Canada Inc. (Sprint) requesting that the Commission refrain, pursuant to section 34, from the exercise of powers and the performance of duties with respect to the telecommunications services that Sprint provides. By letter dated 7 September 1994, the Commission notified Sprint of its intention to initiate a broader proceeding to deal with the issues raised by Sprint's letter, stating that Sprint could set out its position in this proceeding.
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II PROCEDURE
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1. Sprint is made party to this proceeding. Other persons wishing to participate in this proceeding must file a notice of intention to participate by writing to Mr. Allan J. Darling, Secretary General, CRTC, Ottawa, Ontario, K1A 0N2, fax: 819-953-0795, by 14 November 1994. The Commission will issue a complete list of parties and their mailing addresses.
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2. Parties may file comments with the Commission, serving copies on all other parties, by 12 December 1994.
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3. Parties may file reply comments with the Commission, serving copies on all other parties, by 11 January 1995.
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4. 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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Allan J. Darling
Secretary General
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