ARCHIVED -  Telecom Order CRTC 99-346

Telecom Order

Ottawa, 13 April 1999

Telecom Order CRTC 99-346

File No.: 8340-B2-0020/00

1.In an application dated 25 September 1998, Bell Canada (Bell) filed for approval, an agreement that provides for the swapping of optical fibre between Bell and Bell Mobility Cellular Inc. (Bell Mobility). Bell submitted that both companies have a mutual interest in optimizing the use of their fibre optic networks at this time, particularly in the Metro-Toronto area. Both Bell and Bell Mobility have optical fibre in that area that they do not need themselves but would be useful to the other party.

2.Bell also indicated that the proposed fibre swapping agreement provides for each party to use fibre owned by the other. The fibre is and will at all times be owned by the original owner of the fibre. The agreement also provides that, wherever practical, the fibre swapping will be in equivalent amounts, measured in meters of fibre. An annual review will be conducted to establish the total fibre-meters used by each party during the previous annual period. Where the uses are not in equivalent amounts, the party that used the greater amount must provide to the other party the excess amount the next year. The proposed agreement is for an initial 10-year period.

3.Clearnet Communications Inc. (Clearnet) and Rogers Cantel Inc. (Cantel) requested that the Commission deny the proposed agreement. They submitted that the agreement would give Bell Mobility an undue advantage over its competitors, as Bell Mobility would be able to access Bell's fibre services at rates below the General Tariff (GT) rates. They submitted that the existing GT for optical fibre should be used to service Bell Mobility's requirement.

4.They also cautioned that the Commission should not treat this application as a limited case dealing with Toronto only, as Bell and Bell Mobility will expand the scope or enter into more agreements to cover additional facilities in more locations. This will give Bell Mobility preferential and reduced cost access to the most extensive fibre network in Ontario and Quebec, bestowing significant advantage to Bell Mobility over its competitors. Cantel indicated that it was not aware Bell had fibre optic surplus in Metro-Toronto and that opportunity exists for its use.

5.In reply, Bell submitted that Bell Mobility is not obtaining any fibre facilities at a more favourable rate than could be obtained by other wireless providers, as the proposed agreement contemplates an equivalent swap of facilities. If Bell were to provide Bell Mobility with fibre under the GT, and Bell Mobility provided Bell with fibre of equivalent technical specifications, then the two companies would be in exactly the same position under the agreement. Bell also indicated that it initiated the arrangement with Bell Mobility, and it has been using Bell Mobility's fibre and paying the latter for that use. Bell denies any allegations by Clearnet and Cantel that the "fibre swap" is artificial, stating that it has no intention of circumventing the tariff.

6.Bell also indicated that it is prepared to negotiate similar arrangements with other parties, subject to Bell requiring those facilities that other parties may have. Without similarly desirable fibre facilities to offer Bell, however, it would decline such an arrangement. In Bell's view, given that Clearnet has not approached Bell, Clearnet's concerns are premature.

7.Bell also submitted that while the company's GT provides for the lease of fibre facilities to other carriers under GT Item 960, Optical Fibre Service, the GT applies in situations where a carrier requires facilities from Bell, but the company does not require any facilities in exchange. The fact that this is a two-way arrangement makes the fibre exchange appreciably different from a one-way arrangement from the company to the customer contemplated by the tariff. Therefore, it is the company's view that no existing tariff applies to the situation in question, and an agreement under section 29 of the Telecommunications Act (the Act) is appropriate.

8.Bell further submitted that where a tariff does not exist for the provision of a particular service or facility, it has been historical practice that a carrier entering into an arrangement with another carrier for the provision of that service or facility can choose to file an agreement under section 29 of the Act. Bell submitted that many of these agreements could have been construed as agreements for the provision of telecommunications services by one carrier to the other and vice versa, and the Commission has always permitted unique arrangements under section 29 of the Act. Bell also submitted that it has entered into similar arrangements with other companies in the past.

9.In the Commission's view, the main issues in this proceeding are whether an agreement is appropriate, given that there are GTs for optical fibre, and whether concerns regarding unjust discrimination or undue preference are justified.

10.Contrary to Bell's position, the Commission does not accept the view that there is no existing tariff for the facilities which are the subject of the proposed agreement.

11.The Commission considers that while the agreement involves the swap of equivalent units of fibre, the costs of such identical physical units may not necessarily be the same. In a situation where Bell Mobility has built fibre at lower costs but is swapping with Bell's fibre built at a higher cost, there would be preference to Bell Mobility if the facilities were swapped.

12.The Commission notes that local fibre facilities are provided by Bell pursuant to its GT Item 960. The Commission considers that where a service is available under the GT, then the tariff should be used to provide service instead of an agreement. In the Commission's view, the use of the GT appropriately addresses concerns regarding unjust discrimination or undue preference.

13.The Commission further notes that while local fibre facilities are available under Bell's GT, the prices for any such facilities provided by Bell Mobility are detariffed.

14.With respect to the instances that Bell cites where the Commission has approved fibre-swap agreements before, the Commission notes (i) that optical fibre facilities were not available under the GT, and (ii) these agreements did not involve the provision of local fibre facilities by a dominant telco to an affiliate.

15.In view of the foregoing, the proposed Bell/Bell Mobility agreement is denied.

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Secretary General