ARCHIVED -  Telecom Order CRTC 97-1818

Telecom Order

Ottawa, 12 December 1997

Telecom Order CRTC 97-1818

On 30 August 1996, Stentor Resource Centre Inc. (Stentor) filed, on behalf of the federally regulated Stentor owner companies (SOCs), an application under Tariff Notice (TN) 347, for approval of a two-way Dedicated Access Line (DAL) option for Advantage Outbound Service and to grandfather the one-way DAL option for BC TEL and MTS NetCom Inc. An amended application was filed on 25 November 1996 under TN 347A.

File No.: Tariff Notice 347

1. On 27 September 1996, AT&T Canada Long Distance Services Company (AT&T Canada LDS) filed comments, submitting that the two-way DAL proposed under TN 347 is not a DAL as defined by the Commission because it connects the customer premises with the local switch and not the toll network. Accordingly, AT&T Canada LDS submitted that the telephone companies should be directed to impute contribution on all traffic carried over these facilities.

2. By letter dated 11 October 1996, Stentor replied that the two-way DALs are consistent with the DAL definitions embodied in various Commission decisions. Stentor asserted that the DALs are local services, are functionally equivalent to private lines, are dedicated to Advantage Outbound Service and connect the customer premises to the companies' toll network at the Class 5 switch.

3. In its responses to Commission interrogatories filed 29 November 1996 and 20 February 1997, Stentor indicated that the connection at the Class 5 switch can be provisioned physically or via a software programmed connection through which the completion of calls to other local or toll services is denied. Stentor asserted that, functionally, the two methods provide the same result, a dedicated access between the customer's premises and the toll network. Stentor further submitted that AT&T Canada LDS is trying to make the case that DALs should be limited to those provisioned through a physically dedicated facility, and that any other type of facility utilized to provide this service functionality is not a DAL. This approach, Stentor submitted, ignores the current provisioning practice, does not acknowledge the efficiencies that are inherent with other approaches to provisioning and is not supported by any Commission decision.

4. Stentor noted that AT&T Canada LDS relied on a similar argument concerning a connection (referred to as a nailed-up connection) in an 18 October 1995 application for a contribution exemption for Unitel Communications Company (now AT&T Canada LDS) Canada-U.S. cross-border circuits, which was approved by the Commission in Telecom Order CRTC 96-828. Stentor argued that should the Commission determine that AT&T Canada LDS' argument concerning software defined connections has merit, it would be necessary to re-examine AT&T Canada LDS' contribution exemption application, and any other applications which rely on a similar principle.

5. AT&T Canada LDS noted that the contribution exemption does not depend on a particular connection between two trunk groups and submitted that it does not dispute that nailed-up connections can equally be provisioned using either a hard-wired or software programmable connection. AT&T Canada LDS submitted that when such a connection is established using switching software inherent in the end-office switch, which the Commission has defined as a bottleneck, then the entire configuration should be considered a bottleneck. AT&T Canada LDS concluded that there is no need to revisit the previous contribution exemption.

6. AT&T Canada LDS submitted that Stentor's proposal contains network elements which it has failed to unbundle and provide at Carrier Access Tariff service rates to alternate providers of long distance service (APLDS). AT&T Canada LDS noted that in Review of Regulatory Framework, Telecom Decision CRTC 94-19, 16 September 1994, the Commission determined that when the telephone companies introduce new competitive services, the underlying bottleneck network elements should be unbundled and made available to competitors on the same terms and conditions as they are provided to the Competitive segment of the telephone companies. Since a two-way DAL is a local facility included as a component of a Competitive segment service, Stentor's Competitive segment must obtain this facility from its Utility segment at tariffed rates.

7. Stentor argued that DALs are not a bottleneck service as alternative sources of access, as well as methods for provisioning DALs, are available from the companies. Stentor also cited the Commission's determination in Telecom Order CRTC 95-301 dated 13 March 1995 (Order 95-301) that DALs, being local private lines, are not bottleneck services. Stentor concluded that there is no requirement to unbundle the DAL network service element from Advantage Outbound Service and it is, therefore, unnecessary for the companies' Competitive segments to obtain this facility from its Utility segment at tariffed rates. Stentor considered that the unbundling of Advantage DALs would be inconsistent with previous Commission determinations and that mandated unbundling should be limited to essential facilities which can be practically provided.

8. In response to a Commission request, Stentor submitted that the rates for local loops and connecting links proposed in Stentor's submission of 15 March 1995 in the proceeding leading to Local Competition, Telecom Decision CRTC 97-8, 1 May 1997 (Decision 97-8) would be its preferred set of unbundled rates to be used for the provision of Advantage-like dedicated access arrangements to APLDS.

9. Stentor, in reply dated 30 April 1997, reiterated its position that, as determined in Order 95-301, DALs are not a bottleneck service and that Advantage DALs meet the functional definitions of DALs. However, Stentor noted that it has submitted proposed rates for the unbundled network access elements that would be used for the provision of Advantage-like dedicated access arrangements (i.e. local loop and connecting link) to APLDS. Stentor submitted that the loop arrangements proposed in the 15 March 1995 submission, in conjunction with the co-location filings, would provide interexchange carriers (IXCs) with the additional option to connect a Stentor company local loop to IXC provided transmission facilities co-located with a Stentor company's local switch.

10. AT&T Canada LDS considered that the unbundling rules for competitive local exchange carriers (CLECs) versus the unbundling rules for APLDS differ significantly. AT&T Canada LDS maintained its position that the Commission should explicitly direct the telephone companies to unbundle their DALs and make them available to APLDS.

11. The Commission notes that it has in past decisions defined dedicated access arrangements. The Commission remains of the view that Advantage DALs are appropriately considered DALs in that they connect subscriber premises directly to the telephone companies' toll networks.

12. In Decision 97-8 the Commission determined that local loops that are situated in small urban and rural areas meet the criteria of an essential facility and that the loops subject to this finding conform to the list of local loops that Stentor proposed should be considered essential. The Commission also found that local loops are not an essential facility in larger centres, typically referred to as Rate Bands A and B, where there is a competitive, but limited supply. Nevertheless, the Commission directed that the Local Loops in Bands A and B be unbundled for a period of five years.

13. The Commission finds reasonable the view that the facilities employed in providing local loops and Advantage DALs are substantially the same. The Commission therefore concludes that it would be appropriate to modify the company's tariffs to allow APLDS to acquire local loops and connecting links at the same rates as they are made available to CLECs. The Commission considers that such a regime will provide APLDS with the unbundled components to replicate Advantage-like DALs at the Class 5 switch.

14. The Commission further concludes that for the purposes of the imputation test, the SOCs must incorporate the tariffed rates for local loops for Advantage service traffic carried over DALs in the rate bands where local loops are considered essential.

15. In light of the foregoing, the Commission directs that Stentor submit within 30 days:

(a) proposed tariff amendments to provide for the availability of unbundled local loops and connecting links to APLDS; and

(b) imputation test results incorporating tariff rates for the local loops in rate bands where they have been determined to be essential facilities.

Laura M. Talbot-Allan
Secretary General

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