ARCHIVED -  Telecom Order CRTC 98-856

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Telecom Order

Ottawa, 27 August 1998
Telecom Order CRTC 98-856
The Commission received an application by Télébec ltée (Télébec) on 9 May 1997 pursuant to section 34 of the Telecommunications Act (the Act) requesting forbearance from the regulation of the installation, maintenance and repair of inside wiring.
File No.: 8640-T5-01/97
1.Télébec requested that the Commission refrain from exercising its powers and performing its duties under sections 24, 25, 27, 29 and 31 of the Act.
2.The services in question are currently provided pursuant to Télébec's General Tariff Item 4.1.4.
3.Télébec proposed changes to its tariffs that would specify that inside wiring and jacks are those facilities on the customer's side of the demarcation point, and delete references to charges for the installation and repair of inside wiring and equipment. Télébec also requested changes that would make it the responsibility of each subscriber to ascertain Télébec's labour and other charges for performing work on customer inside wiring.
4.Télébec did not request any changes to the diagnostic charge set out in the company's tariffs.
5.In response to Télébec's application, the Commission issued Telecom Public Notice CRTC 97-32, Regulation of Inside Wiring in Télébec ltée's Service Territory, 15 September 1997, and addressed interrogatories to Télébec.
6.Télébec submitted that the market for installation, maintenance and repair of inside wiring is competitive. The company stated that there are no competitive entry barriers and that many competitors have entered the market in a short period of time.
7.Télébec submitted that the company has lost a significant share of the inside wiring market. Specifically, Télébec stated that it has lost 61% of the market for repairs, 84% of the market for new installations, and experienced a pronounced decline in service orders per new network access service unit since 1994.
8.Télébec also submitted copies of Yellow Page advertisements of companies promoting telecommunications inside wiring services. In addition, the company listed numerous enterprises that it considered capable of performing inside wiring work.
9.In response to Commission interrogatories, Télébec stated that for single-line residential and business subscribers, and for multi-line subscribers, the demarcation point is between the company's protector and the customer's inside wiring. For multi-unit dwellings, the demarcation point is inside the customer's unit, generally at the same location as the first jack. According to Télébec's terms of service, both single and multi-line customers are responsible for inside wiring beyond the demarcation point.
10.Télébec submitted that its policy is to install a demarcation jack on the first visit to customers' premises.
11.Télébec stated that if a subscriber without a demarcation jack reports wiring trouble, the company will install a demarcation jack at no cost to the subscriber. The company stated that if the problem is with the inside wiring, the subscriber is informed that Télébec or other entities could repair the inside wiring. It stated that the subscriber incurs a charge only if Télébec repairs the inside wiring, or if the premises already have a demarcation jack.
12.Télébec stated that a diagnostic charge applies only if the premises have a demarcation jack, and if the subscriber requests that Télébec test the inside wiring. If the subscriber incurs the diagnostic charge, Télébec will inform the subscriber of the cause of the wiring trouble, and suggest alternatives for repairs. Télébec stated that this policy, and the diagnostic charge, would not be changed without Commission approval.
13.Télébec undertook to continue to provide wiring guides to subscribers on request for another three years.
14.Télébec also outlined its Phase III/Split Rate Base assignment procedures relating to any activities involving inside wiring.
15.Télébec stated that inside wiring owned by Télébec may be used for services not provided by Télébec, and that Télébec may offer an insurance plan for inside wiring in the future.
16.No other comments were received in this proceeding.
17.In Télébec ltée - Development Plan for 1995-1999 and Revenue Requirement for 1995, Telecom Decision CRTC 94-26, 29 November 1994 (Decision 94-26), the Commission transferred to subscribers the responsibility for installing and maintaining inside wiring. In that Decision, the Commission denied an insurance plan for repairs and maintenance of inside wiring proposed by the company. The Decision also transferred inside wiring activities from the Utility rate base to the Competitive segment of the company.
18.In the context of this proceeding, Télébec listed 187 companies that performed or are capable of performing telecommunications inside wiring work. Several of the businesses enumerated by Télébec advertise telecommunications inside wiring work in the Yellow Pages. Some of these firms have specialized in telephone inside wiring, and serve several communities in Télébec's service territory. The Commission notes that subscribers may also install their own wiring.
19.When the Commission denied Télébec's application for an insurance plan in Decision 94-26, it noted the low frequency of failure of inside wiring, and stated that customers would be better served during the development of a competitive market if Télébec offered maintenance services at compensatory hourly rates with an option to pay over several months.
20.Based on the evidence presented by Télébec, including the decline in Télébec's market share in the inside wiring market, the Commission is of the view that a competitive market for inside wiring services has been established and that subscribers are better informed about their responsibility for inside wiring installation and repair. Further, the required parts and materials to install and repair inside wiring are now widely available. Moreover, the Commission notes that competing inside wiring installers are able to offer their own maintenance insurance plans (similar to the situation in the home heating industry where independent contractors offer insurance plans for heating equipment in competition with the gas utility). In view of these changed market conditions, the Commission concludes that Télébec would not obtain an undue preference from offering an insurance plan for inside wiring.
21.The Commission is also of the view that Télébec's Phase III/Split Rate Base assignment procedures for inside wiring activities are adequate to protect against anti-competitive cross subsidies if inside wiring services are provided on a forborne basis.
22.Based on the record of this proceeding, the Commission concludes that there are no barriers to entry, and that the market for inside wiring in the company's territory is sufficiently competitive to protect the interests of users. Accordingly, with respect to Télébec's inside wiring installation, maintenance and repair services, the Commission finds that it would be appropriate to forbear from exercising its powers and duties under sections 24 (in part), 25, 29 and 31, and subsections 27(1), 27(2), 27(3) (in part), 27(4), 27(5) and 27(6) of the Act.
23.The Commission finds that it would not be appropriate to refrain from exercising all its powers and duties under section 24 and subsection 27(3) of the Act.
24.The Commission notes that the CRTC Industry Steering Committee (CISC) is examining, among others, issues related to the location of the demarcation point and access to inside wiring by local exchange competitors.
25.The Commission therefore will retain sufficient powers under section 24 of the Act to specify possible future conditions on the offering and provision of inside wiring installation, maintenance and repair services, including possible conditions of access by competitors to inside wiring owned by Télébec. The Commission will also retain its powers under section 24 to ensure that existing conditions regarding the confidentiality of customer information continue to apply.
26.The Commission also considers it necessary to retain subsections 27(3) of the Act to ensure compliance with powers and duties not forborne from in this decision.
27.The Commission is of the view that subscribers without a jack-ended demarcation device should not be charged for diagnostics or inside wiring work performed by the company. Accordingly, the Commission will continue to exercise its powers and perform its duties under the Act with respect to Télébec's diagnostic service and installation of jack-ended demarcation devices.
28.Pursuant to subsection 34(1) of the Act, the Commission finds as a question of fact, that to refrain from exercising its powers and duties under sections 25, 29 and 31, and subsections 27(1), 27(2), 27(4), 27(5) and 27(6) and under section 24 and subsection 27(3) of the Act, to the extent set out in this Order, with respect to Télébec's installation, maintenance and repair of inside wiring would be consistent with the Canadian telecommunications policy objectives.
29.Pursuant to subsection 34(2) of the Act, the Commission finds as a question of fact that the provision of these services is subject to sufficient competition to protect the interests of users.
30.Pursuant to subsection 34(3) of the Act, the Commission finds that to refrain from exercising the powers and performing the duties to the extent set out in this Order would not likely impair the establishment or continuance of a competitive market for these services.
31.In light of the foregoing, the Commission orders that:
(a) Pursuant to subsection 34(4) of the Act, effective the date of this Order, sections 24 (in part), 25, 29 and 31, as well as subsections 27(1), 27(2), 27(3) (in part), 27(4), 27(5) and 27(6) of the Act do not apply to Télébec's installation, maintenance, and repair of inside wiring to the extent that they are inconsistent with the Commission's deliberations herein.
(b) The tariff revisions proposed by Télébec are approved effective the date of this Order.
(c) Télébec is directed to issue forthwith revised tariff pages.
Laura M. Talbot-Allan
Secretary General
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