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ARCHIVED - Order CRTC 2000-632

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Order CRTC 2000-632

Ottawa, 7 July 2000

MTS Communications Inc.: IXPL forbearance on the Winnipeg-Emerson route

Reference: 8640-M3-01/00
The Commission forbears from the provision of interexchange private line (IXPL) services on the Winnipeg-Emerson (U.S. border) route.

1.

In a letter dated 22 February 2000, MTS Communications Inc. requested forbearance from regulation for the provision of high capacity and digital data services (DDS) interexchange private line (IXPL) services offered by MTS as the Winnipeg-Emerson (U.S. border) route.

2.

MTS noted that in Follow-up proceeding to Telecom Decision CRTC 97-20: Establishment of criterion and process for considering further forbearance for high capacity/DDS interexchange private line services, Telecom Order CRTC 99-434, dated 12 May 1999, the Commission established the following criteria with respect to forbearance for high capacity/DDS IXPL services offered by the telephone companies on specific routes not already forborne pursuant to Stentor Resource Centre Inc. - Forbearance from regulation of interexchange private line services, Telecom Decision CRTC 97-20, dated 18 December 1997:
.high capacity/DDS services. will be granted forbearance on a particular route upon the Commission being satisfied that one or more competitors of .[a company] are offering or providing, on that route, the equivalent of DS-3 bandwidth (or greater) on a private line basis to at least one customer, using terrestrial facilities from a company other than [the company in question] or an affiliate of [that] company.

3.

In support of its application, MTS filed in confidence documents prepared by competitors which, in the company's submission, demonstrated that there is more than one competitor offering DS-3 (or greater) high capacity private line service on the route. MTS stated that the documents were filed in confidence because they contain sensitive pricing information.

Position of parties

4.

In response to a Commission letter dated 7 March 2000, TELUS Communications (B.C.) Inc. and TELUS Communications Inc. (collectively, TELUS), Bell Canada, AT&T Canada Corp. and AT&T Canada Telecom Services Company (collectively, AT&T Canada) and Call-Net Enterprises Inc. stated that they did not offer or provide the equivalent of DS-3 bandwidth (or greater) on a private line basis using terrestrial facilities from other than MTS or an affiliate of MTS on the Winnipeg-Emerson (U.S. border) route. In a letter dated 23 May 2000, WFI Urbanlink Ltd. advised that it does provide such service.

5.

In its response, Call-Net noted and relied on the definition of an IXPL route referred to in Order 99-434. For its part, AT&T Canada stated that it owns an interest in the America-Canada-1 fibre route, and that these holdings include fibre strands between Winnipeg and Windsor, Ontario (passing through Emerson, Detroit and Chicago), but that it does not offer IXPL from Winnipeg to Emerson since there is no break out at any point between Winnipeg and Windsor.

6.

In reply comments, MTS stated that, similar to AT&T Canada, its IXPL facilities between Winnipeg and U.S. destinations, such as Minneapolis and Chicago, do not have a break out at Emerson, as the route through Emerson is simply the Canadian portion of the route between Winnipeg and U.S. destinations. MTS noted that it is only seeking forbearance for the Canadian portion of the overall route between Winnipeg and U.S. destinations because it is only the domestic portion of the route that is under the Commission's jurisdiction.

7.

With respect to Call-Net's response, MTS stated that it is aware that Call-Net provides service in the Winnipeg-Chicago corridor that transits the U.S. border at Emerson. MTS submitted that Call-Net is likely taking a position similar to that of AT&T Canada in this proceeding, specifically that if circuits are not broken out at Emerson, service is not being offered on the Emerson cross-section. MTS submitted that Call-Net is making use of a questionable interpretation of Order 99-434 in order to avoid reporting that the Winnipeg-U.S. border route is competitive and eligible for forbearance.

Conclusions

8.

The Commission notes that MTS framed its application in terms of the Winnipeg-Emerson route based on the proposition that the Commission's jurisdiction ends at the border. The Commission further notes that this position is consistent with the rating of interexchange channels in the telephone companies' tariffs as channels between a Canadian rate centre and an international border point.

9.

The Commission disagrees with AT&T Canada's and Call-Net's interpretation of Order 99-434. The Commission notes that Order 99-434 stated that the definition of an IXPL route contained in the telephone companies' tariffs (i.e. service between two exchanges) would be applied when assessing whether a particular route met the criteria set out in that order. In stating that they do not provide service on the Winnipeg-Emerson route, the Commission considers that Call-Net and AT&T Canada are choosing to treat Emerson as an exchange where an IXPL terminates. In the Commission's view, it is obvious that Emerson is not an exchange contemplated by Order 99-434, but is merely a crossing point to the U.S. The Commission notes with considerable concern the interpretation sought to be placed on Order 99-434 by Call-Net and AT&T Canada, and further notes that one of the consequences of such an interpretation is that the route that is the subject of MTS' application in this proceeding failed to be reported in the semi-annual filing process established in that order.

10.

The Commission reminds competitors of their obligation to report, as part of the semi-annual reporting process, routes that satisfy the criteria set out in Order 99-434.

11.

Based on the record of this proceeding, the Commission is satisfied that one or more competitors of MTS are offering or providing on the route that is the subject of MTS' application, the equivalent of DS-3 (or greater) bandwidth on a private line basis to at least one customer, using terrestrial facilities from other than MTS or an affiliate of MTS. Accordingly, the Commission is satisfied that the criteria set out in Order 99-434 have been met.

12.

Based on the information filed in this proceeding, the Commission finds that the provision of high capacity/DDS IXPL services on the Winnipeg-Emerson route satisfy the criteria under section 34 of the Telecommunications Act for a forbearance determination.

13.

In particular, the Commission finds that a determination to forbear from regulation of the high capacity/DDS services on the Winnipeg-Emerson route, would, under subsection 34(1) of the Act, be consistent with the Canadian telecommunications policy objectives set out in section 7. In addition, the Commission finds that it would be appropriate to forbear under subsection 34(2) of the Act on the basis that the forborne services are or will be subject to a level of competition sufficient to protect the interests of users of these services. Finally, the Commission finds that to forbear would not impair unduly the establishment or continuance of a competitive market for the forborne services.

14.

The scope of forbearance hereby granted is the same as that granted in Decision 97-20.

15.

MTS is directed to issue tariff pages removing the tariffs for the services that are the subject of this proceeding, to be effective on the date of issuance of the tariff pages. Pursuant to subsection 34(4) of the Act, the Commission hereby declares sections 24 (in part), 25 and 31 and subsections 27(1), 27(2), 27(4), 27(5) and 27(6) will no longer apply to MTS' high capacity/DDS on the Winnipeg- Emerson route to the extent that they are inconsistent with the Commission's determinations herein.
Secretary General
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