ARCHIVED - Telecom - Commission Letter - Commission Decision Regarding CRTCInterconnection Steering Committee Dispute on ILEC Service Intervals associatedwith the Provision of New Unbundled Loops (Type A&B) (BODI011a)

Letter

File No. 96-2376

Ottawa, 31 October 2000

To: PN 2000-17 Distribution List

Subject: Commission Decision Regarding CRTC Interconnection Steering Committee Dispute on ILEC Service Intervals associated with the Provision of New Unbundled Loops (Type A&B) (BODI011a)

Dear Madam, Sir:

1. The central issue is service intervals associated with the provision of new unbundled loops (Type A&B) by Incumbent Local Exchange Carriers (ILECs) to Competitive Local Exchange Carriers (CLECs). The Competitors requested shorter service intervals. They stated that the current service intervals (eight to 10 days) impede their ability to compete on an equal footing with the ILECs. They submitted that the Incumbents are in violation of subsection 27(2) of the Telecommunications Act by providing shorter service intervals to themselves than provided to the Competitors. The Competitors proposed that the ILECs provide loops with service intervals no longer than those taken to provide loops to themselves.
2. The Incumbents indicated that they are unable to offer shorter service intervals due to system and process limitations. However, this could change if the CLECs agreed to pay for the costs of upgrading or creating new ILEC systems and provide accurate demand forecasts. In the latter case, the ILECs stated that the forecast loops must be subject to contracted periods and volume commitments on the part of CLECs. The Competitors argued that the ILECs should recover their own costs. However, they agreed that demand forecasts should be included in the service interval guidelines, but stated that such forecasts should not be of a contractual nature.
3. In order to offer unbundled local loops to their competitors, as mandated by Local Competition, CRTC Telecom Decision 97-8 (Decision 97-8), the Incumbents needed systems and processes that did not exist. The ILECs had systems in place to provide primary exchange service (of which local loops are a major underlying component) to retail customers. But, according to them, these delivery systems depend on the association of a given primary exchange service line to a telephone number; and an unbundled loop does not have a telephone number associated with it. Instead, the ILECs decided to use delivery systems established for non-switched local private lines, noting that these do not require telephone number association.
4. According to the Competitors, the Incumbents were aware, well before Decision 97-8, that their systems and processes needed to be changed and/or updated. They noted that the Commission has required a number of services and systems to be developed by the ILECs in order to achieve the public interest goal of equitable competition in telecommunications, including equal access arrangements, local number portability and unbundled local loops. These were mandated because they were seen as essential for the development of competition, not because the ILECs had a valid business case for them. The Competitors submitted that the Incumbents are in violation of subsection 27(2) of the Act by giving preference to themselves for the provisioning of unbundled local loops. According to the Incumbents, it is inappropriate to compare service intervals for their end-to-end retail local service with those applicable to unbundled local loops. The Incumbents submitted that the provision of non-switched local private lines is more appropriately comparable to the provision of unbundled local loops.
5. The Commission disagrees with the Incumbents' statement that local loops compare to non-switched local private lines. The Commission considers that comparisons should not be driven by administrative and operational systems already in place. Rather, they should be based on the purpose of the facility at issue.
6. In this case, the unbundled loop underlies the basic telephone service that ILECs and CLECs provide to customers to give them access to switched local voice and long distance services. Therefore, if ILECs provide loops to themselves in shorter time periods than they deliver them to CLECs, it means that they can deliver basic telephone service to customers faster than CLECs can. In the Commission's view, the result is a competitive advantage to the ILECs. The Commission is of the view that to achieve competitive neutrality in this respect, the service intervals provided by the ILECs to the CLECs must be no greater than those provided to themselves.
7. To give effect to this conclusion, the Commission directs ILECs to provide unbundled loops to CLECs within service intervals no greater than those within which they provide loops to themselves, at least 90 percent of the time.
8. The Commission considers that the Incumbents should pay their own costs for upgrading or creating systems and processes to implement this directive.
9. The Commission notes that rates have already been established to recover ILEC costs of providing loops to CLECs on a competitively neutral basis and is of the view that, absent evidence to the contrary, no ILEC cost recovery beyond what the loop rates provide for is required.
10. As far as forecasts are concerned, the Commission does not accept the ILEC position that CLEC loop requirement forecasts that are not contractual commitments for length of time and quantity of loops are unacceptable. A CLEC could quite accurately, and in good faith, forecast loop needs within a context of general economic growth, and then be faced with a downturn that adversely affected its own growth and thus reduced its loop needs. While the ILECs say that to force them to build to forecasts without contracts could inflict stranded investment on them, the same would be true for CLECs that were forced to commit contractually to loops that they forecast. Moreover, the ILECs build loops to major business customer growth forecasts now without imposing contracts on them.
11. The Commission acknowledges that there is some risk that CLECs will forecast excessive loop needs. While it is of the view that requiring contractual commitments would be too onerous, the Commission requires that CLECs support their loop forecasts with reasonable assumptions. The Commission directs ILECs, through their Carrier Services Groups, to accept CLEC forecasts that are based on reasonable assumptions and directs CLECs to provide full support for their forecasts. In the event that a CLEC and an ILEC cannot agree on a forecast, the two parties may seek Commission assistance either at the staff level or through a formal application.
12. In this proceeding, Axxent-AT&T requested that the Commission mandate the implementation of the reduced service intervals over a prescribed timeframe. The Commission notes that the record of the proceeding does not contain a proposed specific timeframe. However, due to the fact that it has been over three years since the Commission mandated the provision of local loops to CLECs, the Commission is of the view that a three-month period should be sufficient. Accordingly, the ILECs are directed to meet this objective within three months of the date of this ruling.

Yours sincerely,

Secretary General
c.c. Renée Gauthier, CRTC (819) 953-8608

Date modified:

2000-10-31