ARCHIVED -  Telecom Order CRTC 99-991

Telecom Order

Ottawa, 13 October 1999

Telecom Order CRTC 99-991

File No.: 8640-S1-04/98

1.On 14 December 1998, Stentor Resource Centre Inc. (Stentor) requested that the Commission refrain from exercising some of its powers, pursuant to section 34 of the Telecommunications Act (the Act), in relation to the provision of current and future mobile wireless services by BC TEL, Bell Canada (Bell), Island Telecom Inc., Maritime Tel & Tel Limited, MTS Communications Inc., NBTel Inc. (NBTel), NewTel Communications Inc. and Québec-Téléphone (the companies).

2.Stentor requested that the Commission refrain from the regulation of the provision of:

(1) mobile wireless services connected to the public switched network, otherwise known as public switched mobile voice services, with respect to sections 24 (in part), 25, 29, 31 and subsections 27(1), 27(5) and 27(6) of the Act; and

(2) other mobile wireless services, with respect to sections 24, 25, 27, 29 and 31 of the Act.

3.Stentor stated that the companies are not requesting forbearance for primary exchange services where the local exchange carrier utilizes mobile radio technology, in whole or in part, to provision local exchange services. As well, the application does not include certain older mobile radiotelephone services which use obsolete technology, are costly to provision, and are thus not viable competitive alternatives to cellular or personal communications service (PCS). Also, the application excludes wireless wide area networking (WAN) service (i.e., wireless data networking services which are connected to customers' equipment using an Ethernet, Token Ring or asynchronous transfer mode (ATM) interface).

4.Stentor copied the application to interested parties to Review of Joint Marketing Restrictions, Telecom Public Notice CRTC 97-14, 25 April 1997 and Review of Bundling and Joint Marketing Restrictions, Telecom Public Notice CRTC 97-21, 6 June 1997. Comments were received from TELUS Communications Inc. (TCI).

Background

5.As defined in Regulation of Mobile Wireless Telecommunications Services, Telecom Decision CRTC 96-14, 23 December 1996 (Decision 96-14), public switched mobile voice services include cellular services, personal communications services (PCS), enhanced specialized mobile radio (ESMR) services, and satellite-based mobile services. The category "other mobile wireless services" includes paging services, other mobile data services, and two-way non-switched radio services such as repeater and trunk radio services.

6.In Regulation of Wireless Services, Telecom Decision CRTC 94-15, 12 August 1994 (Decision 94-15), the Commission found that the cellular and public cordless telephone service markets were sufficiently competitive to warrant forbearance pursuant to section 34(2) of the Act. The Commission forbore in part from regulating these services where offered through a structurally separate affiliate of a regulated telephone company providing primary exchange service.

7.In Decision 96-14, the Commission extended this forbearance regime to include all mobile voice wireless telecommunications services provided by Canadian carriers, other than regulated telephone companies providing primary exchange service (in-house dominant primary exchange service providers), in respect of sections 24 (in part), 25, 29 and 31, and subsections 27(1), (5) and (6) of the Act.

8.In NBTel Inc. - Forbearance from Regulating Cellular and Personal Communications Services, Telecom Decision CRTC 98-18, 2 October 1998 (Decision 98-18), the Commission forbore in part from regulating the provision of cellular services and PCS by NBTel. In the Decision, the Commission stated that competitive safeguards such as the split rate base and price cap regime are in place to effectively limit anti-competitive cross-subsidies to wireless services provided by a telephone company.

9.In Decision 96-14, the Commission also forbore from regulation of other mobile wireless services in respect of sections 24, 25, 27, 29 and 31 of the Act, when such services were not provided by a regulated telephone company providing primary exchange service.

10.In Application by Bell Canada to Review and Vary Telecom Decision CRTC 96-14, Telecom Decision CRTC 98-15, 2 September 1998 (Decision 98-15), the Commission extended complete forbearance, as granted with respect to other mobile wireless services, to paging services provided by Bell on an in-house basis.

Positions of Parties

11.Stentor submitted that, consistent with the Commission's approach in Decision 94-15 and its conclusions in Decision 98-18, additional measures such as the split rate base and price cap regime have been imposed on its member companies to limit the likelihood and incentive of cross-subsidization from Utility to Competitive segments of the companies, thereby sufficiently reducing their incentives and ability to pursue an anticompetitive cross-subsidy strategy.

12.Further, Stentor noted that the Commission has already forborne from regulation of certain mobile wireless services provided in-house by the companies, such as Bell's paging services in Decision 98-15, and, in part, from regulation of cellular services and PCS provided by NBTel in Decision 98-18.

13.TCI submitted that, not only have mobile wireless services already been found by the Commission to be sufficiently competitive to warrant forbearance, but that additional separate competitive safeguards for certain mobile wireless and wireline services, beyond those safeguards pertaining to other competitive services, have been found by the Commission to be unnecessary. TCI also submitted that with price cap regulation of Utility segment services, and the split rate base regime, telephone companies have neither the incentive nor the ability to anti-competitively cross-subsidize competitive segment operations from Utility segment revenues.

Conclusion

14.The Commission is of the view that granting the forbearance requested by Stentor would be consistent with the Commission's conditions for forbearance established in Decisions 94-15 and 96-14, with its finding in Decision 98-15, where the Commission forbore fully from regulating paging services provided by Bell on an in-house basis, and in Decision 98-18, where the Commission forbore in part from regulating the provision, on an in-house basis, of cellular services and PCS by NBTel.

15.Further, the Commission continues to be of the view that the costing safeguards imposed by the Commission since the release of Decisions 94-15 and 96-14, such as the split rate base and price cap regime, sufficiently limit the opportunities for anti-competitive cross subsidies to wireless services.

16.The Commission notes that the degree of forbearance requested by Stentor is similar to the degree of forbearance granted mobile wireless services in Decision 96-14, and cellular services and PCS in Decision 98-18. Further, it is consistent with the degree of forbearance granted to TCI in Telecom Order CRTC 98-1343, 23 December 1998. In that Order, the Commission granted forbearance from regulation of the provision of mobile wireless services by the newly-amalgamated entity comprising the former TELUS Communications Inc., TELUS Mobility Inc., and others, which now supplies mobile wireless services on an in-house basis.

17.In light of the above, in respect of public switched mobile voice services, the Commission finds:

(a) pursuant to subsection 34(1) of the Act, that to refrain from exercising powers and performing duties under sections 24 (in part), 25, 29 and 31 and subsections 27(1), 27(3) (in part), 27(5) and 27(6) is consistent with the Canadian telecommunications policy objectives;

(b) pursuant to subsection 34(2) of the Act, that the provision of these services is subject to sufficient competition to protect the interests of users;

(c) pursuant to subsection 34(3) of the Act, to refrain from exercising the powers and performing the duties to the extent set out in this Order would not likely impair unduly the continuance of a competitive market for these services; and

(d) that it is appropriate to retain its powers and duties under section 24 (in part) and subsections 27(2), 27(3) (in part) and 27(4) of the Act.

18.However, the Commission notes that the determinations in this Order do not apply to the services described in paragraph 3, above.

19.The Commission will retain in part its powers under section 24 of the Act to ensure that the existing conditions regarding disclosure of confidential information to third parties continue to apply, and to impose conditions as may be needed in the future. Accordingly, on a going forward basis, the existing conditions concerning customer confidentiality are to be included, where appropriate, in all contracts or other arrangements with customers for the provision of the services forborne in this Order.

20.The Commission is of the view that consistent with Decision 96-14 and Decision 98-18, it is important to retain subsections 27(2), 27(3) and 27(4) in order to, for example, ensure that the companies do not unjustly discriminate against other service providers or customers, or confer an undue or unreasonable preference with respect to access to their networks.

21.The Commission considers it necessary to retain subsection 27(3) to the extent that it does not refer to compliance with any of the powers and duties forborne from in this Order.

22.In respect of other wireless services, the Commission finds:

(a) pursuant to subsection 34(1) of the Act, that to refrain from exercising powers and performing duties under sections 24, 25, 27, 29 and 31 is consistent with the Canadian telecommunications policy objectives;

(b) pursuant to subsection 34(2) of the Act, that the provision of these services is subject to sufficient competition to protect the interests of users; and

(c) pursuant to subsection 34(3) of the Act, to refrain from exercising the powers and performing the duties to the extent set out in this Order would not likely impair unduly the continuance of a competitive market for these services.

23.In light of the foregoing, the Commission directs that 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(3) (in part), 27(5) and 27(6) do not apply to the companies' public switched mobile voice services, to the extent that they are inconsistent with the Commission's determinations herein.

24.In addition, effective the date of this Order, sections 24, 25, 27, 29 and 31 do not apply to the companies in respect of the provision of other wireless services. The companies are directed to issue tariff pages, within 15 days of this Order, withdrawing the tariffs for those services.

Secretary General

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