ARCHIVED -  Telecom Decision CRTC 99-10

TELECOM DECISION

Ottawa, 6 August 1999

TELECOM DECISION CRTC 99-10

Location of Demarcation Point for Inside Wire in Multi-Dwelling Units and Associated Issues

File No.: 8644-C12-01/98

Summary

In Local Competition (Telecom Decision CRTC 97-8) the Commission established a framework for competition in local telephone service. In paragraph 206 of that Decision, the Commission determined that a local telephone company must ensure that customers are able to access services provided by any other local telephone company operating in the same area under reasonable terms and conditions. In this Decision, the Commission sets out its presumption that any agreement between a local telephone company and another party that results in the provision of local telephone service to a multi-dwelling unit (MDU) on an exclusive basis is a violation of the Telecommunications Act (the Act).

The ability of competing service providers to have access to the wiring at some point in an MDU is central to the implementation of the policy of end-user choice. This point is referred to as the "service provider demarcation point". In Telecom Public Notice CRTC 98-35 (PN 98-35), the Commission sought comments on various issues relating to the location of the demarcation point in MDUs and the transfer of control of in-building wiring to owners of such properties.

The Commission has concluded that in MDUs located in the service territories of Bell, MTT, MTS and BC TEL, the service provider demarcation point for telephone wire and related facilities used by a local telephone company will be located in the main terminal room of each building. This will apply to all newly constructed MDUs as well as existing ones where the local telephone company obtains the property owner's written acceptance of responsibility for in-building wire and related facilities.

There are a number of other related issues that remain to be examined. The Commission therefore requests that CISC, an industry working group, consider and provide a status report to the Commission within four months on the following matters:

a) Any implications arising from requiring a local telephone company to comply with paragraph 206 of Decision 97-8, using either its own serving technology or other facilities;

b) The appropriate service provider demarcation points in MDUs for coaxial cable, fibre or fixed wireless technologies which are used for the provision of single line telephone service,

c) How much notice should a local telephone company provide of its intention to install facilities in an MDU (unless the property owner has waived notice); and

d) Criteria which could be used to define a given MDU as a "new building" for the purpose of this Decision.

The Commission directs NewTel, NBTel, Island Tel and TCI to show cause within 30 days of the date of this Decision why the approach taken with regard to Bell, MTT, MTS and BC TEL should not be taken in their territories.

Issues relating to fees, terms, and agreements for access to MDUs are not discussed in this document. The Commission intends to initiate a proceeding in the near future to consider such matters.

Introduction

1.In Telecom Public Notice CRTC 98-35, 2 December 1998, Location of Demarcation Point for Inside Wire in Multi-Tenant Buildings and Associated Issues (PN 98-35), the Commission began a proceeding related to the manner in which local exchange carriers (local telephone companies or LECs) gain access and provide service to end-users in MDUs.

2.In Telecom Decision CRTC 97-8, 1 May 1997, Local Competition (Decision 97-8) the Commission established a framework for the implementation of competition in local exchange services. It also established a sub-group of the CRTC Interconnection Steering Committee (CISC) to deal with building access and inside wire issues with respect to telecommunications services (the Sub-group). In paragraphs 205 and 206 of Decision 97-8, the Commission established a policy of customer, or end-user choice in local exchange services. In PN 98-35, the Commission stated that the location of the demarcation point in MDUs may have implications for the application and implementation of this policy and sought comment on various issues in this regard. It further requested comment on the transfer of responsibility for in-building wiring to property owners.

3.The Sub-group noted above has discussed the location and implications of the demarcation point for inside wire in MDUs, one of the key issues on which the Commission sought comment. The following parties, which includes many of the Sub-group's participants, made submissions in this proceeding: AT&T Canada Long Distance Services Company; British Columbia Public Interest Advocacy Centre (on behalf of BC Old Age Pensioners' Organization, Consumers' Association of Canada (BC Branch), Council of Senior Citizens' Organizations of BC, federated anti-poverty groups of BC, Senior Citizens' Association of BC, West End Seniors' Network, End Legislated Poverty, BC Coalition for Information Access, and Tenants Rights Action Coalition); Bell Canada (Bell), Island Telecom Inc. (Island Tel), Maritime Tel & Tel Limited (MTT), MTS Communications Inc. (MTS), NB Tel Inc. (NBTel), and NewTel Communications Inc. (NewTel), (the Companies); BC TEL; Building Owners and Managers Association of Canada, Canadian Institute of Public Real Estate Companies, Canadian Federation of Apartment Associations (BOMA); Canada Payphone Corporation; Call-Net Enterprises Inc.; Canadian Association of Internet Providers; Fundy Cable Ltd./Ltée; GT Grouptelecom Networks Inc.; MaxLink; MetroNet Communications Group Inc.; Paytel Canada, Inc.; Optel Communications Corp.; Public Interest Advocacy Centre (on

4.behalf of Action Réseau Consommateur, the Consumers' Association of Canada, and the National Anti-Poverty Organization); Quartet Service Corporation; Rogers Cablesystems Limited; TELUS Communications Inc. (TCI); University of Manitoba; Vidéotron Télécom ltée.; and 3427978 Canada Inc.

5.The Commission thanks all of the parties noted above for their submissions in the course of this proceeding, and notes that details of the submissions of all of the parties noted above can be found on the public record of this proceeding.

6.In this Decision, the Commission addresses two key issues:

a) the achievement of choice in local telephone services for end-users (i.e. customers) in MDUs, while taking into account the concerns of property owners, and

b) whether the service provider demarcation point in MDUs should be closer to the building entrance in territories where it is now at or near the customer's suite door (Bell, BC TEL, MTT, MTS).

6.A number of parties addressed the impact of such relocation on the achievement of end-user choice. Many parties addressed the role property owners may play as "gatekeepers" with respect to access by LECs to customers in MDUs.

7.Traditional business relationships between incumbent LECs (ILECs) and property owners have changed, and will continue to change, as a result of the introduction of competition in local exchange telephone service. Competitive LECs (CLECs) and owners of MDUs are now establishing business relationships. The Commission notes that a wide range of parties to the proceeding support end-user choice in local exchange services, including new and incumbent LECs, as well as building owners and consumer representatives. A number of parties also emphasized the fact that competition is in the early stages of implementation, and that they require the opportunity to develop good working relationships. The Commission expects that they will continue their efforts to do so.

8.A number of parties raised issues relating to fees, terms and agreements between building owners and LECs serving end-users for access to MDUs. The Commission acknowledges that achieving and implementing choice for customers in MDUs raises such issues, including costs, and accordingly will initiate a proceeding to examine these issues in the near future.

Context

9.The Commission uses the following terminology in this Decision:

a) "demarcation point" - the physical location ("point") where the wires and facilities on one side of the point are under the responsibility and control of one party, and the wires and facilities on the other side of the point are under the responsibility and control of a different party;

b) "inside wire" - wire and other facilities which are usually in, or in the proximity of, the unit of the end-user, and which are under that customer's responsibility and control;

c) "in-building wire" - wire and other facilities which are in the MDU (e.g. wires in the MDU's risers, running from the main terminal room to the telephone closet on each floor and from there to the customer's suite); in-building wire may be owned by a telecommunications service provider or by the property owner;

d) "customer demarcation point" - the point where the inside wire and the in-building wire meet; and

e) "service provider demarcation point" - the point where the telecommunication service provider's facilities and the wire in the building meet (for example, in Bell's territory the service provider demarcation point is at the customer's suite door, and therefore is in the same location as the customer demarcation point).

10.The locations of the customer and service provider demarcation points define the extent to which in-building wire may be under the responsibility and control of the property owner (because these demarcation points identify the points beyond which responsibility and control for facilities is with the customer and service provider, respectively).

11.The service provider demarcation point for single line services in an MDU is in a different location depending on the ILEC territory: in Bell, MTT and MTS territory, it is at the customer's suite door; in BC TEL territory, it is at the telephone closets; and in TCI territory, it is in the main terminal room. The ILECs retain responsibility for all in-building and inside wire in NBTel, NewTel and Island Tel territories and in the territory formerly served by TELUS Communications (Edmonton) Inc. (TCEI) and now served by TCI.

12.Parties in this proceeding focused on the location of the service provider demarcation point in MDUs in Bell, BC TEL, MTT and MTS (Bell et al), and TCI territories and, in particular, on whether that service provider demarcation point should be re-located in the territories of Bell et al. One effect of moving the service provider demarcation point in MDUs in those territories would be to identify the in-building facilities that would no longer necessarily be under the service provider's responsibility and control.

Customer Choice of Local Exchange Services

13.Parties commenting were in general agreement that the policy of end-user choice contemplated by Decision 97-8 remains appropriate. There was also a general consensus that LECs and property owners should not enter into exclusive agreements for the provision of local exchange services to a MDU.

14.In Decision 97-8, the Commission determined that it is in the public interest for end-users to have access to the LEC of their choice in all situations. In the same decision, it required, as a condition of providing service, that a LEC ensure that the end-users it serves have direct access, under reasonable terms and conditions, to services provided by any other LEC serving in that area. This condition requires, for example, that a LEC not take any action, either alone or in conjunction with another party, which would preclude such access.

15.The Commission therefore considers that an agreement between a LEC and another party for the provision of local telephone service to a MDU on an exclusive basis is, prima facie, a violation of subsection 27(2) of the Act.

16.With respect to the matter of preferred marketing arrangements raised in some comments, the Commission considers that there is insufficient information on the record, and, accordingly, makes no determination with respect to such arrangements in this proceeding.

Location of the Service Provider Demarcation Point and Related Issues

Serving Technologies and Facilities Subject to this Decision

17.The Commission notes that while the record of this proceeding does not provide a sufficient basis for determining the service provider demarcation point for coaxial, fibre or fixed wireless technologies, exclusive rooftop agreements may pose a barrier to end-user choice. The record of this proceeding is also not sufficient to address the appropriate service provider demarcation point for MDUs on campuses or situations where more than one MDU is built on contiguous property. The determinations in this Decision are therefore confined to copper wire and related facilities used to provide single line local telephone service in a stand-alone MDU.

18.The policy of end-user choice nevertheless applies to all LECs, regardless of the technology used. Some parties took the position that if a LEC uses technology that does not allow for a demarcation point in the main terminal room, it should be required to use that technology to provide an alternative by which other LECs may serve customers. An alternative approach would be for the LEC in question to provide access to end-users using alternate technology such as copper wire. However, further exploration of the practical implications of each approach is warranted.

19.Accordingly, the Commission requests that the Sub-group identify and address the advantages, disadvantages and all implications of requiring a LEC to provide an alternative access arrangement using (a) the technology it uses to provide its own service in the MDU, and (b) an alternate technology. The Sub-group is requested to provide a status report on these discussions within four months from the date of this Decision.

20.The Commission further requests that the Sub-group address the issue of the appropriate service provider demarcation points for each of: (a) coaxial cable, (b) fibre, and (c) fixed wireless technology used to provide single line local exchange services in MDUs. A status report on these discussions should also be submitted within four months from the date of this Decision.

Re-Locating the Service Provider Demarcation Point

21.The general consensus among commenting parties is that the service provider demarcation point in Bell, BC TEL, MTT and MTS territories should be moved. Various advantages of such a move were identified, including reduced reliance on facilities controlled by ILECs for access to customers and less potential for disputes regarding wiring congestion in MDUs. The Commission agrees that the service provider demarcation point should be moved.

22.The Commission requires under section 24 of the Act that, as a condition of offering or providing service to customers in each MDU where the service provider demarcation point moves, each LEC shall provide clear written information to each of its customers regarding: (a) the changes in responsibility and control for in-building wiring, (b) the process customers should follow to resolve telecommunications service problems and complaints, and (c) the customer's option of having their serving LEC act as a single point of contact in respect of service problems that may relate to in-building wire.

Defining the Service Provider Demarcation Point

23.In PN 98-35, the Commission sought comment on what the implications would be if the service provider demarcation point varied by ILEC territory. The general consensus of parties commenting was that there are operational advantages if the service provider demarcation point is uniform in all territories. However, parties also considered that concerns other than national consistency were of greater importance at this time. In the Commission's view, while the service provider demarcation point need not be the same in all MDUs, the location of that point in a given MDU should be identified as clearly as possible.

24.With respect to the proposal made by BOMA, that a property owner should be able to re-locate the service provider demarcation point, the Commission notes that the service provider demarcation point defines the point at which LEC responsibility and control over telecommunications facilities ends. It would not be appropriate for a property owner to determine unilaterally the location of that point.

25.In view of the foregoing, the Commission considers that the best approach is to define the service provider demarcation point as being in the main terminal room. The Commission notes the suggestion that locating the service provider demarcation point at the minimum point of entry would permit property owners to respond to situations such as requests for access to the building from different directions. It expects, however, that service providers and owners should be able to resolve any such situation. The Commission is of the opinion that the benefits of locating the service provider demarcation point in the main terminal room outweigh any concerns.

26.With respect to concerns expressed about "gatekeeping" by property owners, some parties recommended that in MDUs where the service provider demarcation point has moved, and the existing service provider uses the building owner's in-building wire to serve an end-user, the rights to use this in-building wire should be unilaterally assignable to a competitor as an unbundled local loop. While the sublessee or assignor would not be required to obtain the building owner's consent, it would have to provide formal notification of the transaction to the building owner. Some parties considered that, in this way, if any tenant is getting telephone service, all could have access to the service provider of their choice, assuming existing lines are adequate.

27.This suggests the second LEC could use the property owner's in-building wire originally used by the first LEC, in conjunction with a leased loop to the central office, to serve the customer. This proposal (reselling a local loop where it is the only means available to serve a customer) would still give rise to the end-user choice contemplated in Decision 97-8.

28.The Commission intends to consider this proposal in its forthcoming proceeding on fees and agreements referred to above.

Payphones and MDUs

29.The Commission notes that a pay telephone access line (PAL) is provided for competitive pay telephones, and can terminate in outdoor phone booths, airports, subways and shopping malls. The service provided by a PAL in a MDU, however, is technically similar to other local services. The Commission therefore considers that the demarcation point for PALs terminating in MDUs should be in the main terminal room, as it is for local loops. The Commission expects discussions within CISC on other issues associated with PAL service to continue.

The Service Provider Demarcation Point for CLEC Facilities

30.Some parties considered that demarcation point requirements should not apply to CLECs. One rationale was that in-building wire is forborne pursuant to Forbearance - Services Provided by Non-Dominant Canadian Carriers, Telecom Decision CRTC 95-19, 8 September 1995 (Decision 95-19).

31.The advantages of moving the service provider demarcation point, including management of the in-building wire by the property owner, pertain to all local service providers, not just the incumbent provider in a given MDU. The Commission considered all facilities (both ILEC and CLEC) used to provide public switched local voice services to be within the scope of Decision 97-8. The Commission disagrees with the position that CLEC in-building wire is forborne under Decision 95-19. Accordingly, the findings in this proceeding with respect to the service provider demarcation point apply to all LECs (CLECs and ILECs).

Timing of the Move of the Service Provider Demarcation Point

32.The Companies proposed a staged approach to moving the service provider demarcation point. It would be moved to the main terminal room in each of the following circumstances: (a) all new buildings, (b) where the property owner provides a written notice for transfer of responsibility and control of in-building wire to the serving LEC, and (c) where more than one LEC has installed feeder transmission facilities to the main terminal room in the MDU and wishes to use existing in-building wire, and the property owner accepts responsibility and control for it (the Companies also proposed an exception, which is discussed separately below). The proposal received significant support on the record from parties to the proceeding.

33.The Commission considers that the approach proposed by the Companies to moving the service provider demarcation point should be adopted in all ILEC territories (in new MDUs and where the property owner accepts responsibility and control for in-building wire). Pursuant to section 24 of the Act, the Commission requires that, where responsibility and control for in-building wire is transferred from a LEC to a property owner, as a condition of providing service, the LEC must obtain written acceptance of the transfer from the property owner. Where a property owner accepts responsibility and control for in-building wire, it also assumes responsibility for managing those facilities.

34.BOMA submitted that all LECs should be required to use the property owner's facilities where the property owner has responsibility and control for the in-building wire. The Commission considers it appropriate that LECs use in-building wire under the property owner's control where the property owner makes such facilities available on reasonable, non-discriminatory terms and conditions.

35.A suggestion was made that a LEC that wants to install facilities in a MDU should provide 90 days formal notice to the property owner, unless the property owner waives notice. The Commission agrees that the LEC should provide formal advance notice to the property owner, and requests that the Sub-group consider the issue of an appropriate timeframe for the provision of such notice. The Sub-group should provide a status report on these discussions within four months from the date of this Decision.

36.The Commission notes that a property owner cannot relinquish responsibility and control for the in-building wire once it has been accepted. However, a property owner who has declined or not elected to accept responsibility and control for in-building wire can later decide to accept it.

37.In cases where the ownership of an MDU changes, the Commission notes that, where a LEC owns the in-building wire, any purchaser of an MDU may accept or decline such responsibility, notwithstanding that the previous owner had assumed responsibility and control.

38.The circumstances in which an MDU will constitute a "new building" for the purpose of re-locating the service provider demarcation point were not addressed in this proceeding. The Sub-group is therefore requested to identify criteria which could be used to determine when a MDU is a "new building" for the purpose of this Decision, and to report to the Commission within four months from the date of this Decision.

The "Exception Scenario"

39.In circumstances where the property owner is not willing to accept responsibility and control for the in-building wire, but is willing to permit a LEC to install facilities in the MDU, the Companies proposed an exception to the approach set out above. In such cases, the service provider demarcation point would not move, and each LEC would manage the in-building wire it installs.

40.The Commission considers that the service provider demarcation point should not move if the property owner will not assume responsibility and control for the in-building wire. Each LEC will have responsibility and control for in-building wire it installs. A CLEC that does not wish to install its own in-building wire may resell another LEC's local loop, which will continue to be available to the customer demarcation point.

Local Loop Rates

41.The issue of whether LECs incur charges for the use of ILEC in-building wire, related pathways and other building facilities maintained by the property owner will be addressed in the context of a proceeding to be initiated shortly. Until that time, the Commission considers that costs and rates established in Final Rates for Unbundled Local Network Components (Telecom Decision CRTC 98-22, 30 November 1998) remain appropriate.

Other Matters

42.Bell, BC TEL, MTT and MTS are directed to file forthwith for approval, tariff pages reflecting the Commission's determinations in this Decision.

Demarcation Points in Other Territories

43.Parties in this proceeding did not address the issue of whether the Commission's findings in this Decision should apply in the territories of NewTel, NBTel and Island Tel. However, the Commission notes these companies joined Bell Canada, MTT and MTS in their submission. The Commission considers it may be appropriate to apply its determinations in this Decision in the territories of NewTel, NBTel, Island Tel and the territory formerly served by TCEI and now served, following an amalgamation, by TCI. In its view, such an approach would foster consistency in demarcation points between operating territories. It would also recognize the regulatory framework for competition in local exchange services that have been put in place in these territories. However, since responsibility for inside wire has not been transferred to the customer in the territories of NewTel, NBTel, Island Tel and the territory formerly served by TCEI, there is no customer demarcation point or service provider demarcation point.

44.The Commission is of the preliminary view that in the territories of NewTel, NBTel, and Island Tel and in the territory formerly served by TCEI: (a) responsibility for inside wire should be transferred to end-users on the model of the MTT inside wire tariffs (that is, a customer demarcation point should be established), (b) a service provider demarcation point should be established at the same location and (c) that its findings in this Decision should apply in the territories of these telephone companies. The Commission directs NewTel, NBTel, Island Tel and TCI to show cause within 30 days of the date of this Decision, why this approach should not be taken in their respective territories.

The Customer Demarcation Point in BC TEL Territory

45.The customer demarcation point in MDUs in BC TEL territory currently exists only with respect to the installation of facilities. For the purpose of applying its determinations in this Decision, the Commission considers it may be appropriate to recognize the current customer demarcation point for all purposes. It also considers that customer diagnostic capability of inside problems should be provided similar to the capability provided in other ILEC territories.

46.The Commission therefore directs BC TEL to show cause within 30 days of the date of this Decision: (a) why the current customer demarcation point in MDUs in the operating territory of BC TEL should not also apply in respect of the maintenance of inside wire, and (b) why BC TEL customers should not have the capability to identify problems with inside wire either by means of a self-test jack at the customer demarcation point or through a diagnostic service provided by the LEC at no charge.

Secretary General

This decision is available in alternative format upon request, and may also be viewed at the following Internet site: :

www.crtc.gc.ca