ARCHIVED -  Telecom Order CRTC 99-355

Telecom Order

Ottawa, 15 April 1999

Telecom Order CRTC 99-355

On 9 September 1998, Bell Canada (Bell) filed Tariff Notice (TN) 6278, proposing a Special Facilities Tariff (SFT) for co-location of customer provided Asymmetric Digital Subscriber Line (ADSL) equipment in Bell's central offices for a specific customer. The application included a Central Office License Agreement (COLA). The company stated that the proposed COLA would apply to all ADSL service providers (ASPs) requesting co-location. In addition, Bell proposed a revision to ADSL Access Service General Tariff Item 5400.

File No.: TN 6278

1.The application was granted final approval on 13 October 1998 in Telecom Order CRTC 98-999, without taking into account the comments of parties as they were received at approximately the same time as the Order was released. Given this, the Commission has examined the application on a de novo basis, in light of the comments received.

2.Interlog Internet Services Inc. (Interlog), Netcom Canada Inc. (Netcom) and T. M. Denton Consultants representing the Responsible Internet Service Companies (RISC) provided comments.

3.Interlog requested that the tariff be approved with changes or be granted interim approval until the issues it had raised were addressed. RISC requested that the application not be approved until the issues that it had raised had been addressed. Netcom stated that it shared the concerns raised by Interlog, but unlike Interlog, submitted that the application should be denied.

4.Interlog and Netcom objected to clauses 5.04 and 9.10 of the COLA that proposed restrictions on cross-connecting to other services in the Central Office. Interlog submitted that the prohibitions in these clauses are an undue preference that Bell has conferred unto itself. Interlog noted that in Co-Location, Telecom Decision CRTC 97-15, 16 June 1997 (Decision 97-15), no prohibition was placed on interconnecting carriers (ICs). Interlog also submitted that the proposed restriction is inconsistent with the competitive environment for interconnection envisioned by the Commission in paragraph 77 of Regulation Under the Telecommunications Act of Certain Telecommunications Services Offered by "Broadcast Carriers", Telecom Decision CRTC 98-9, 9 July 1998 (Decision 98-9).

5.Bell submitted that ASPs are not by definition ICs. Bell further submitted that the interconnection of an ASP's co-located equipment with the co-located equipment of other service providers or competitive carriers represents a different functionality than that contemplated in the proposed tariff. Bell further submitted that if Interlog or any other service provider wishes to locate equipment in the central offices of the company and/or wishes to acquire functionality from the company to support its contemplated service offerings, it should bring its service requirements to the company's Carrier Services Group (CSG) for consideration.

6.The Commission notes that the restrictions on interconnection in the proposed COLA are specific to the co-location arrangement proposed by Bell in this SFT. The Commission considers that an ASP is not an IC, and to date the Commission has mandated permission to interconnect or cross connect co-located equipment for IC's only. If an ASP wanted such an arrangement, it could request it of the relevant company's CSG. To the extent that the carrier and the ASP are unable to resolve issues arising out of a request for such an arrangement, it is open to the parties to ask the Commission to rule on these. The Commission is therefore of the view that it would be premature to rule at this time on whether Bell is conferring an undue preference on itself. The Commission is also not persuaded that the proposed SFT is inconsistent with Decision 98-9.

7.Interlog and Netcom objected to the provisions in the COLA that prevent ASPs from installing and maintaining their own equipment in Bell's central offices (COs). Interlog requested that it be allowed to perform its own maintenance and installation. Interlog argued that the proposed tariff rates include the provision of these services by Bell and requested that the tariff rate be changed to remove these components.

8.Bell submitted that TN 6278 constitutes a form of co-location similar to that identified as virtual co-location under Stentor Resource Centre Inc. (Stentor) National Services Tariff (NST) Item 636. Further, Bell submitted that virtual co-location under NST Item 636 requires the company to install and maintain the equipment on behalf of the co-locator, because the equipment in question is physically positioned in the same area as the company's Public Switched Telephone Network (PSTN) equipment where access is strictly limited to authorized personnel. Bell argued that the request by ASPs to install and maintain their own equipment implies the need for some form of physical co-location.

9.Bell stated that it would not be averse to developing such an arrangement, if and when an ASP chooses to initiate appropriate negotiations. However, Bell submitted that this type of arrangement would require separate rooms or floors and would therefore be considerably more expensive.

10.The Commission notes that the same issue arose in the proceeding leading to Decision 97-15. In that proceeding, Stentor proposed that ICs' personnel be escorted when they perform installation and maintenance of co-located equipment. The Commission approved the use of standard labour rates for this escort service. The Commission considers that there is merit in considering whether Bell should make a similar escort service available to ASPs that co-locate equipment in the company's central office.

11.Bell's application included a copy of a Letter of Authorization (LOA) that the company stated should be signed as evidence of authorization before an ASP would be allowed to access the customer's loop. In addition, the LOA proposed specific wording to the effect that the telephone company would be unable to fulfil its obligations with respect to maintenance and repair of telephone service to the same extent as set out in the company's Terms of Service.

12.Interlog, Netcom and RISC opposed the need for a LOA. Interlog submitted that this requirement was discriminatory and was intended to discourage customer use of ASP services. Interlog also submitted that, to the best of its knowledge, the Bell affiliate that was providing ADSL service was not required to obtain a LOA from its customers.

13.RISC submitted that the LOA constitutes an unlawful self-preference. RISC questioned the need for a LOA arguing that it constitutes a further barrier to effective competition in the ADSL marketplace.

14.Bell submitted that as ADSL requires changes in customer wiring which could affect basic telephone service, some authorization from customers is warranted. Bell also noted that where a service provider used Bell's ADSL Access service, the use of the LOA was not required as it would be Bell's staff who would be maintaining the ADSL terminal equipment at both ends of the loop (including any changes to the customer's inside wiring). As a consequence, under the company's ADSL Access service, the company controls the equipment and therefore remains capable of maintaining primary exchange service in accordance with its Terms of Service.

15.Bell stated that its affiliate is a customer of Bell's ADSL service and as such its affiliate does not co-locate any ADSL equipment in the company's central office.

16.By contrast, Bell submitted when an ASP provides ADSL service utilizing its own ADSL terminal equipment in conjunction with Bell primary exchange service, Bell has no control over the ASP's equipment. Even if the company were to maintain the CO located ADSL equipment provided by the ASP, Bell submitted that maintenance of the ADSL terminal equipment and associated changes to the inside wiring at the customer location are beyond the company's purview.

17.The Commission is of the view that a LOA is appropriate and notes that it has approved LOAs for other telephone companies. Therefore, the Commission considers that it is appropriate that customer authorization be obtained before Bell does work in the CO on behalf of the ASP, and before the ASP makes any modifications to the customer's inside wiring.

18.The Commission agrees with Bell that where an ASP provides ADSL service, maintenance of the ADSL terminal equipment and of the inside wiring at the customer location are beyond the company's control, and that this may impede the company's ability to perform some maintenance functions. In the circumstances, the Commission considers that subscribers should be advised that the maintenance of the line might involve activities not usually associated with primary exchange service. However, the Commission is of the view that the wording proposed by Bell provides the company with too much discretion. Accordingly, the Commission considers that this matter should be examined further.

19.Interlog submitted that there was not sufficient information provided on the costs to justify the Equipment Cabinet and Space Service Charge of $26,420. Interlog stated that the highest service charge for co-location by a telephone company that it was aware of was $8,900. Interlog requested that the Commission direct Bell to lower the proposed rate to $5,000. Netcom also stated that it had received quotes from other Stentor members of one-time fees ranging from $2,000 to $5,000.

20.Bell stated that all charges except space and power were put into the non-recurring charge so as to minimize the future financial impact associated with subsequent service periods. Bell also submitted that the SFT was predicated on the customer's desire to utilize company provided transmission facilities between the company's central office and the customer's point of presence, rather than implementing alternate transmission facilities for which the customer would be responsible.

21.The Commission notes the SFT proposed in this application was designed to meet the specific requirements of a particular customer and contains facilities required for the specific arrangement requested by that customer. Based on the costing data provided, the Commission is of the preliminary view that the costs are not excessive. However, the Commission notes that Netcom has stated that it has received quotes for similar service from other telephone companies that range from $2,000 to $5,000. The Commission considers that this matter should be considered further.

22.Interlog raised concerns about a number of other clauses of the COLA. Interlog claimed that the following clauses were too restrictive:

- Clause 10.09 (which states that response time objectives stipulated in the agreement will depend upon availability of spare parts from the ASP.)

- Clause 11.03c) (which assigns liability to the ASP for activities related to the provision of the service to the ASP and the use or misuse of the equipment and facilities of the ASP.)

- Clause 12.01e) (which permits Bell to terminate the agreement where the company, in its sole opinion, finds that the co-located equipment poses a threat to the public, its personnel or to the network.)

- Clause 17.01 (which states that only equipment acceptable to Bell may be installed in the company's CO.)

23.Bell submitted that the wording proposed in these clauses is appropriate, particularly in view of the company's revised maintenance and repair obligations set out in the proposed LOA.

24.In the Commission's view clause 10.09 is reasonable.

25.Interlog submitted that clause 11.03c) assigns liability to the ASP for activities that are only within Bell's power to perform. The Commission notes that the wording of clause 11.03c) is virtually identical to the wording in the COLA associated with IC co-location approved in Telecom Order CRTC 97-1926 dated 23 December 1997. Given that there are aspects of the service that the ASP provides to its customers that are not within the company's control, the Commission considers that clause 11.03c) is reasonable.

26.With regard to clause 12.01e), the Commission considers that the clause should be amended to make it clear that Bell must have reasonable grounds for terminating the agreement.

27.With regard to the clause 17.01, the Commission is of the view that given that Bell is responsible for protecting the integrity of the PSTN, clause 17.01 is appropriate. Should an ASP consider that Bell has adopted an unreasonable position with respect to the equipment to be co-located, it is always open to the ASP to apply to the Commission for relief.

28.The Commission notes that in Telecom Order CRTC 98-121 dated 9 February 1998 (Order 98-121), it concluded that charges for the use of floor space or electrical power services of COs are to be equal to the co-location General Tariff rates for these services. Consistent with Order 98-121, the Commission considers that Bell should amend the proposed tariff pages to specify that the unit rates reflect those in NST 636.

29.Because there are matters that require further examination, the Commission is not in a position to rule on TN 6278 and the COLA on a final basis at this time. In the circumstances, the Commission grants interim approval to TN 6278 and directs Bell (1) to file within 30 days a revised COLA agreement reflecting the changes to clause 12.01(e) noted above, and (2) to amend the tariff pages to specify that the unit rates reflect those in NST 636.

30.Intervenors may file submissions on the following issues within 21 days of the date of this Order, serving a copy on Bell. Bell may file a reply within 10 days of receipt of the submissions, serving a copy on interveners. The issues are:

- whether Bell should make an escort service available to ASPs that co-locate equipment in the company's central office;

- the wording of the LOA with respect to the ability of the company to meet its Terms of Service; and

- the appropriateness of the equipment cabinet and space service charge.

31.To the extent that intervenors wish to rely on quotes for similar services from other telephone companies, they should provide evidence of the same.

32.The Commission will dispose of TN 6278 on a final basis following the completion of the process initiated by this Order.

33.Submissions and reply submissions are to be actually received, not merely mailed, by the above dates.

This document is available in alternative format upon request and may also be viewed at the following Internet site: www.crtc.gc.ca

Secretary General