ARCHIVED -  Telecom Order CRTC 99-1201

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Telecom Order CRTC 99-1201

  Ottawa, 22 December 1999
  Interconnection tariffs for carriers and telephone companies at a central office
  Stentor Resource Centre Inc. (Stentor) [the telephone companies], TELUS Communications Inc. (TCI) and TELUS Communications (Edmonton) Inc. (TCEI) proposed co-location central office link tariffs to provide facilities to connect an interconnecting carrier's (IC's) co-located equipment to the companies' facilities at a central office. This order gives final approval with changes to those tariffs.
  File Nos.: Stentor TN 668; TCI TN 1061; and TCEI TN 90
  1. Stentor, TCI and TCEI filed the initial tariff notices on 29 June 1998. The proposed tariffs were given interim approval by Telecom Order CRTC 98-754 on 30 July 1998 (Order 98-754) and apply to all federally-regulated incumbent telephone companies.
  2. The proposed rates are for central office links at DS-1 and DS-3 transmission speeds for connection to the telephone companies' facilities and for IC-to-IC cross-connection within a central office. The central office link provides the cable and connection between IC equipment co-located in a telephone company central office and the transport cross-connect facility of the telephone companies. An existing digital network access (DNA) link tariff provides the further link from the transport cross-connect to the telephone companies' service required by the co-located IC at the central office.
  3. The proposed central office link rates comprise a monthly charge and a non-recurring service charge. The monthly rates ($60 for DS-1 and $100 for DS-3) are the same as the DNA link recurring rates which apply for all incumbent telephone companies. The proposed non-recurring service charges would apply per metre of Type C loop cable used for the proposed central office link arrangements. The proposed non-recurring cable charges ranged from $15 to $52 per metre for the various companies and data rates. The exception is MTS Communications Inc. (MTS) which offers only DS-1 co-location link service under a previously approved tariff at a monthly rate of $75 and a non-recurring charge of $200 for any cable length.
  4. The telephone companies currently have an approved IC-to-IC cross-connection monthly rate of $60 for DS-1 cross-connection. The proposed tariff changes would add a $100 DS-3 option for IC-to-IC cross-connection.
  5. The telephone companies provided a cost study which indicated that the proposed non-recurring cable charges include a reasonable mark-up over costs. Stentor proposed that the existing $60 DS-1 and $100 DS-3 DNA link monthly rates should also apply for central office links, but it provided no cost justification for the rate levels as these are existing rates which the telephone companies argued are appropriate.
  6. AT&T Canada Long Distance Services Company (now AT&T Corp.) (AT&T Canada) claimed that the proposed tariffs are unjustified and discriminatory, and are of significant importance since they will effectively determine the principles for connection with respect to the majority of services for co-located carriers.
  7. AT&T Canada argued that the central office link proposed in the current tariff notices covers functions which are already included in existing DNA link tariffs. AT&T Canada argued that, where access facilities to the central office are provided by the telephone companies, only one DNA link charge should apply. AT&T Canada stated that the DNA link charge covers the facilities in the central office to connect from the central office access facility, such as leased lines, through the transport cross-connect to the telephone companies' services. AT&T Canada noted that this link charge also covers the administration of the service request, provisioning and ongoing billing. It is $60 per month (DS-1) with no initial service charge.
  8. AT&T Canada noted that, where the central office access is provided by a co-located carrier, a central office access link charge is proposed to apply to connect from the co-located facilities to the transport cross-connect. AT&T Canada noted that this is an additional charge that is not incurred when telephone companies' leased access facilities are used. AT&T Canada contended that this represents an unjust and discriminatory additional charge which amounts to double charging for the link function in the central office.
  9. MetroNet Communications Group Inc. (MetroNet) argued that the proposed link tariffs constitute double-charging for the link facility. Metronet noted that the proposed tariffs describe the central office link as a "connecting link between the co-locator's equipment and each Company's Transport Cross Connect." MetroNet argued that this definition overlaps with the definition of a DNA link which the telephone companies submitted would also be required to complete a link between a co-located equipment and a telephone company's service. Stentor National Services Tariff Item 300.2, Digital Network Services, states that a link provides the central office equipment required to connect: a) an access to an intra-exchange channel; b) an access to a network service at the rate centre; c) an intra-exchange channel to a network service at the rate centre; and d) an access to an access. MetroNet argued that a link connecting an intra-exchange channel to a network service at the rate centre is what an IC needs to connect its co-located equipment to a telephone companies' service at a central office. MetroNet therefore argued that the proposed link charges are a duplication of the existing DNA link tariff.
  10. MetroNet further argued that the additional charges make co-location competitive access arrangements uneconomic. MetroNet argued that this is contrary to the objectives for co-location set out in Review of regulatory framework, Telecom Decision CRTC 94-19, 16 September 1994 (Decision 94-19), which stated that co-location should provide "the option of delivering traffic to the local switches over either leased or owned facilities, based on cost and efficiency considerations."
  11. MetroNet also asserted that, while co-location link arrangements may cause some additional activity for the telephone companies, the addition of a $60 DS-1 monthly central office link charge and up to a $52 per metre service charge are unjustified.
  12. Cable Atlantic Inc. argued that the additional link charges would not be just and reasonable, would unjustly raise the costs of competitors and would impair development of competition in local access services.
  13. In their reply comments, the telephone companies noted that the proposed central office link provides the link between the co-located equipment and the transport cross-connect. They argued that without this additional charge the costs of this link would not be recovered.
  14. The telephone companies further argued that the proposed link charge provides the completion of the access facility for co-located carriers which is supplied by the leased DNA access facilities where no co-location is involved. They argued that recovery of this link cost is consistent with its other tariff provisions.
  15. The telephone companies noted that the proposed central office link would provide functions similar to the DNA link and that the $60 DS-1 and $100 DS-3 monthly rates were justified. They further noted that the proposed per-metre service charges for central office links were supported by a cost study.
  16. The Commission considers that, contrary to the position taken by the interveners, the current DNA link does not provide for the incremental facilities required between the transport cross-connect and the co-located carrier's equipment. Accordingly, the Commission considers that, in addition to the DNA link charge, a charge should apply for these incremental facilities.
  17. In Decision 94-19 the Commission found that the availability of co-location was required to remove barriers to competitive entry. The Commission classified co-location services as "competitor services" in the price cap framework and set major co-location rates at cost plus a 25% markup. The Commission is of the view that the proposed central office link tariffs are a necessary component of co-location.
  18. The Commission notes that the central office link facilities involved in these tariff applications are similar to the connecting link requirements for local loops. In Final rates for unbundled local network components, Telecom Decision CRTC 98-22, dated 30 November 1998 (Decision 98-22), the Commission addressed the issue of connecting links for local loops and established rates for links between the unbundled loops and competitors' co-located equipment. In that decision the Commission determined that the links would be provisioned in increments of 100 pairs. The one-time service charge for links was based on cost studies provided by the telephone companies. The one-time service charge was capped at $1,600 per 100-pair link cable. The monthly recurring maintenance cost was found to be minimal and set at $1.25 per month per 100-pair cable. The service charge for some companies was proposed to be below the $1,600 cap and rates were approved at the proposed levels for those companies.
  19. In the proposed central office link tariff applications, the one-time service charges for 28 or less DS-1 co-location links varied from $5,100 to $945, based on the proposed per-metre rate and estimated average link distances. A cable providing a link for 28 DS-1s would contain 56 copper pairs.
  20. Given the smaller number of pairs by comparison with the 100-pair cable, the Commission considers it is appropriate that the rates for the central office links should be less than the rates approved in Decision 98-22.
  21. The Commission approves a one-time service charge for the provisioning of co-location central office links capped at $1,000 per increment of 28 DS-1 connections or less for any link length for all companies. This rate is based on a pro-ration of the $1,600 rate for local loop links of 100 pairs and also recognizes that some costs are not dependent on the number of pairs in the cable. The Commission also approves a service charge cap for each DS-3 connection of $1,000. Where a company proposed service charges below $1,000 for an average link, those rates are approved.
  22. The approved central office link service charges per link are as follows:
  28 DS-1 DS-3
BC TEL 1,000 1,000
Bell 1,000 1,000
Island Tel 1,000 880
MTT 1,000 920
NBTel 1,000 750
NewTel 1,000 800
TCI 945 810
TCEI 945 810
  23. The Commission notes that in Decision 98-22 the recurring maintenance cost for connecting links was found to be minimal. The Commission further notes that in the case of the proposed central office links, each connection would also incur a monthly DNA link charge or an IC-to-IC cross-connection link charge. The Commission concludes that a recurring charge in addition to those charges is not justified. The proposed central office link recurring rates are therefore denied.
  24. The Commission approves the proposed $60 DS-1 and $100 DS-3 recurring rates for IC-to-IC cross-connection between co-located carriers.
  25. The Commission considers that, for an IC-to-IC cross-connection link, only the IC-to-IC link charge of $60 per month (DS-1) and $100 (DS-3) should apply, together with the approved central office link service charge, capped at $1,000, for each incremental (28 DS-1 or DS-3) link to co-located equipment. As an example, a DS-1 link for IC-to-IC cross-connection would incur a recurring charge of $60 per month plus the maximum $1,000 service charge for up to 28 DS-1s for each of the two links from the transport cross-connect to each IC's co-located equipment.
  26. The Commission notes that MTS has a central office link tariff for DS-1 service with a $75 per month recurring charge and a $200 non-recurring service charge per link.
  27. MTS Tariff Item 6690, Central Office Access, is made interim as of the date of this order. The Commission requests MTS to show cause, within 30 days of the date of this order, as to why the rates approved in this order for central office co-location links and IC-to-IC cross-connections should not also apply to MTS. It is to include in its response a proposed service charge rate for central office links should the Commission decide that a service charge similar to those approved in this order is appropriate for MTS.
  28. The proposed tariff pages include provisions which would allow the companies to recover any costs of special equipment or unusual expenses in addition to the proposed rates. The Commission considers that those provisions are unnecessary. Stentor Item 638.3(b), TCI Item 212.3.2 and TCEI Item 5035.3.2 are denied.
  29. The Commission notes that, at the request of the several parties who provided comments, the proposed tariffs were given interim approval in Order 98-754.
  30. The Commission gives final approval to the central office link arrangements proposed in tariff notices Stentor 668 and 668A, TCI 1061 and 1061A, and TCEI 90 and 90A as modified in this order. The Commission directs billing adjustments to be made for differences between the rates given final approval and the interim rates during the period from 30 July 1998 to the date of this order.
  31. The Commission directs that tariff pages are to be issued forthwith to give effect to the determinations in this order.
  Secretary General
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