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Decision CRTC 2001-204

Ottawa, 30 March 2001

Our file number: 8622-C74-01/00

To: Interested Parties to PNs CRTC 2000-17 and 27
CLG Participants List
Registered Resellers of High-speed Retail Internet Services

Re: The Commission, by majority decision, approves the Coalition for Better Co-Location (CBC) - Part VII application for expedited relief with respect to the current co-location regime, dated 17 July 2000

Dear Sir or Madam:

  1. On 17 July 2000, CBC1 filed a Part VII application requesting expedited relief with respect to the existing co-location regime and arrangements available from the incumbent local exchange carriers (ILECs). CBC stated that it was willing to withdraw its application and refer the matter to the Commission's ad hoc Co-location Sub-Working Group (CLG) provided the ILECs agreed or consented, in principle, to the relief sought.
  2. By letter dated 6 November 2000, the Commission was informed that CBC wished to suspend the majority of its application as agreement had been reached between CBC and the Respondents2 to refer various items to the CLG. CBC then indicated that it wished to rely upon the procedures set out in Part VII of the CRTC Telecommunications Rules of Procedure for the disposition of three issues:
  • Type 2 co-location at the option of the party requesting co-location;
  • Unescorted access to ILEC central offices (COs); and
  • An order directing the ILECs to commence implementation discussions within the CLG with respect to the above two items.

Background

  1. In Decision 94-193, the Commission found that the development of effective competition in telecommunications markets required, among other things, the option of co-locating competitors' transmission facilities at the telephone companies' COs without the need to lease transmission lines from the telephone company. In response to a call in Decision 94-19, Stentor Resource Centre Inc. filed physical co-location tariffs and a Central Office License Agreement (COLA). AGT Limited, now TELUS Communications Inc. (TCI) separately filed a virtual co-location tariff and a COLA. Descriptions of physical and virtual co-location are provided in Attachment 1.

  2. Stentor proposed two types of physical co-location arrangements (Type 1 and Type 2) whereby the interconnecting carrier (IC) would own and bear responsibility for the equipment to be co-located in the CO. TCI proposed a virtual co-location arrangement whereby the IC would specify and generally supply the equipment to be co-located, but TCI would be responsible for its installation and maintenance.

  3. In Decision 97-154, the Commission found that all ILECs should offer both physical and virtual co-location options: Stentor was directed to file a tariff for virtual co-location similar to TCI's, and TCI was directed to file a physical tariff similar to Stentor's physical Type 1. The Commission also approved Stentor's Type 2 proposal as the companies were prepared to offer such an arrangement, which includes the provision that the former Stentor companies, other than TCI, offer it at their discretion. As a result, three types of co-location are available, that is Type 1, 2 and virtual in most parts of the country. In TCBC's territory, all three are supposed to be available, but with certain restrictions. Escorts are not available and all installation, maintenance and repair of IC equipment for Type 2 co-location, and all associated cable placements are performed by TCBC or its contractor. In TCI's territory, Type 1 and virtual are available, but not Type 2.

Type 2 co-location at the option of the co-locator

  1. The Commission notes CBC's contention that although some competitive local exchange carriers (CLECs) have begun to deploy their own fibre networks, these builds are still in their early stages of rollout and are largely limited to major arteries in urban core areas. Thus, for the foreseeable future, co-location is critical for the rollout to non-core areas of competitive local exchange services and next generation data services, many of which are based on the Internet protocol (IP).

  2. At present, physical and virtual co-location are offered by the ILECs only where appropriate CO floor space, facilities and necessary resources are available after the current and future needs of the ILEC are taken into account. These include, for example, adequate entrance ducts, riser space, and power.

  3. CBC stated that while some competitors might indicate a preference for Type 1 physical co-location, most would opt for more cost-effective forms of co-location if they were available. Currently, the ILECs' tariffs grant them total discretion when determining the arrangements that will be delivered to competitors. CBC said ILECs often decline to make Type 2 co-location available, requiring the IC to contract for Type 1 instead. Furthermore, where Type 1 co-location is not available, the ILECs often decline to offer Type 2 and instead offer virtual co-location. Added to the problem is the fact that Type 2 co-location is not uniformly available across the country. CBC submitted that ILECs should be directed to modify their tariffs so as to ensure that Type 2 co-location can be obtained at the option of the party requesting the co-location arrangement.

  4. TELUS contended that mandating Type 2 physical co-location is not warranted given the alternative forms of co-location and interconnection currently being developed. TELUS stated that Loop Extension Service (LES) and the possible introduction of a Type 3 co-location arrangement (CLEC common area) would provide the benefits desired by the CBC within shorter timeframes. According to TELUS, LES requires the provision of transmission facilities from the CO to another location leased or owned by the CLEC. In addition, this option provides the CLEC unrestricted access to its equipment and places the CLEC in direct control over the costs associated with placement of the equipment.

  5. The Respondents indicated a willingness to discuss the availability of a CLEC common space alternative. Under such a concept CLEC equipment would continue to be segregated from the companies' equipment area but would not be segregated from other co-locators. A single, separate and secure entrance would be provided to the common area. Thus, it is anticipated that, "up-front, one time costs" will be reduced and that such an arrangement could yield additional useable Type 1 co-location floor space.

  6. Bell Canada et al. argued that the Commission fully understood and accepted Stentor's position that Type 1 physical co-location was the default arrangement and that Type 2 would only be offered where segregated floor space was not practical. Bell Canada et al. contended that although integrated equipment is available and that digital subscriber loop (DSL) service providers make use of co-location space for installation of DSL access multiplexors, these developments do not result in a requirement to re-design co-location.

  7. Bell Canada et al. indicated that CBC had failed to consider the rebate process associated with Type 1 co-location, which reduces the start-up cost for the initial and subsequent co-locators. These costs for conditioning common areas and provision of separate entranceways are shared among Type 1 co-locators. According to Bell Canada et al., if CBC's request were granted and exploited by new co-locators, it would effectively reduce the likelihood that existing Type 1 co-locators would receive rebates for the costs they have incurred.

  8. In reply, CBC submitted that it had not requested that Type 2 co-location be provided in all instances, rather that co-locators be given the option to designate this form of arrangement. CBC noted that its membership is comprised of all the major existing co-locators and, despite the fact that they currently have equipment which is co-located in Type 1 co-location areas, and therefore entitled to rebates, each is committed to pursuing the relief requested.

  9. According to CBC, LES is far from a complete alternative to co-location for the following reasons:
  • The full range of services currently available through co-location such as connecting links for DS-0 (Type A & B Loops), DS-1 (Type C Loops) and DS-3 can not be supported.
  • AT&T Canada has been negotiating for over a year with TELUS and MT&T in an attempt to obtain DS-1 and DS-3 connecting link functional equivalency, without success.
  • LES can degrade the quality of certain types of services that are dependent on short loop lengths (e.g., DSL). Since the purpose of LES is to extend the length of existing loops out and beyond the ILECs' COs this can have a negative impact on the speed and quality of the services delivered over these loops.
  • Limited history associated with the provision of LES, therefore, it is not possible to assert whether it is superior to physical or even virtual co-location.
  • LES is not as cost-effective as other co-location arrangements.
  1. CBC argued that co-location represents one of the single largest components of the capital budgets of many new entrants. Therefore, it is in the public interest to ensure that competitors can actually obtain the provision of lower cost alternatives such as Type 2 co-location in order to reduce costs of market entry, facilitate competition and increase customer choice. CBC stated that Type 2 co-location promotes the efficient and effective use of a finite resource, namely, co-location space within ILEC COs and does not involve the lengthy time intervals associated with Type 1 co-location. Moreover, Type 2 arrangements allow the co-locator to carry out installation, maintenance and repair work on their own equipment so that they are not forced to pay for the training of ILEC personnel to perform these functions.

  2. In the Commission's view, neither LES nor the establishment of a CLEC common area are substitutes for Type 2 co-location. LES does not support the same range of services and CLECs are encountering unsuccessful and untimely delays when negotiating with the ILECs to obtain equivalent functionalities. In addition, in some cases, LES extends the length of loops to an extent which degrades DSL (digital subscriber loop) type services that are dependent on shorter loops. Thus, competitors' services are placed at a competitive disadvantage.

  3. The Commission considers that a CLEC common area is not as efficient a use of valuable floor space as Type 2 co-location and, in addition, the initial up-front costs associated with Type 1 co-location still remain. Furthermore, this form of co-location is not yet offered and is still under negotiation.

  4. The Commission notes that the competitive landscape has changed since the issuance of Decision 97-15. The marketplace now consists of ILECs, interexchange carriers, CLECs and DSL service providers. Accordingly, there will be additional requests for co-location and the Commission notes TELUS' concern that the primary problem it faces is the rapidly decreasing amount of available floor space and mainframe capacity in specific COs. However, the Commission notes that Type 2 co-location consumes less floor space than Type 1 and, at the least, no more space than virtual. Further, the Commission is of the view that in order to ensure that competitors are treated in a non-discriminatory fashion, co-location arrangements must be designed to ensure that competitive equity exists between the ILECs on the one hand and new entrants on the other.

  5. The Commission is not convinced by TELUS' argument that based on labour-related issues, TCBC should not be directed to provide Type 2 co-location. Pursuant to section 27(2) of the Telecommunications Act (the Act), no Canadian carrier shall, in relation to the provision of a telecommunications service, "unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage". The Commission notes that based on the record of this proceeding, TCBC has provided Type 2 co-location arrangements to some customers (i.e. Internet service providers), but not others. In the Commission's view, such discriminatory provisioning in a competitive context constitutes a prima facie violation of section 27(2).

  6. Two of the telecommunication policy objectives that the Commission is charged with under the Act are s.7(c), to enhance the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications, and s.7(f) to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective. The Commission is of the view that the same problems exist in Canada that the Federal Communications Commission (FCC) is attempting to mitigate in its ruling5 released in 1999, that is6, Type 1 co-location construction costs are tremendously expensive; in cases where site conditioning is required, provisioning of co-location space can take up to half a year and, according to the record, CO users are facing a rapid depletion of floor space.

  7. The record shows that the members of the CBC are frequently forced to obtain Type 1 co-location. This arrangement involves an up-front fee. Estimates totalling as much as $800,000 per CO have been quoted, which may include, but are not limited to costs for such items as building modifications, perimeter walls, additional riser requirements, lighting and environmental conditions, and securing company property in the CO.

  8. The Commission considers that granting CBC's request for cageless co-location will foster competition. It will reduce substantially the financial outlay associated with Type 1 co-location construction costs, which should facilitate facilities-based competition. It will also encourage the deployment of timely, cost-effective, competitive local exchange services and next generation data services to residential areas. Finally, permitting co-locators to request Type 2 co-location at their discretion will ensure that floor space in the COs is utilized in such a manner as to control the exhaust of available floor space.

Unescorted access to ILEC central offices

  1. CBC stated that in those limited instances where Type 2 co-location is made available, the ILEC requires the IC's personnel to be escorted by an ILEC technician. This requirement is costly due to the hourly rates charged for the escort's time. Furthermore, it adds an unnecessary layer of administrative complexity, as a significant amount of time is spent co-ordinating "appointment times". In CBC's view, escorted access to the CO interferes with the IC's ability to gain access to its co-located equipment in a timely manner. This is particularly problematic in instances where the IC's equipment requires immediate maintenance due to an emergency or in other instances where a competitor would like to perform routine maintenance or repair work during non-business hours.

  2. CBC submitted that the FCC concluded in its ruling7 that incumbent LECs must allow co-locating parties to access their equipment 24 hours a day, seven days a week, without requiring a security escort of any kind or delaying a competitor's entry into the incumbent LEC's premises by requiring, for example, an incumbent LEC employee to be present. The FCC also concluded that this level of access to the CO was required in order to ensure that competitors "will be able to service and maintain equipment or respond to customer outages in a timely manner".

  3. In order for new entrants to provide customers with a competitive level of service, the Commission considers they require access to their co-located equipment 24 hours a day, seven days a week. This would enable them to service and maintain their equipment when they wish, whether during business or non-business hours. In addition, it would give them the means to respond to emergency situations and customer outages in a timely manner. The Commission is of the view that ICs throughout the country should be permitted to install, maintain and repair their own equipment where they wish to do so. The record indicates that the current escorted access requirement impedes ICs' access to their equipment, owing to the need to establish appointments with ILEC personnel. Under such conditions, ICs do not have unimpeded access at any time. Thus, they cannot respond instantly to emergency situations. This, in turn, puts ICs' customers at greater risk. In the event of an IC co-located equipment failure, the IC customer is forced to await service restoration that is much longer while the IC deals with the ILEC to make available ILEC personnel for escort purposes.

  4. CBC argued that the ILECs should be directed to immediately modify their tariffs and COLAs to permit parties that have obtained both virtual and Type 2 physical co-location, unescorted access to their co-located equipment. CBC submitted that the ILECs frequently provide unescorted access to their own third party contractors. In CBC's view, subsection 27(2) of the Act dictates that CBC's employees and ICs' third party contractors should receive treatment which is no less favourable than that accorded by the ILECs to their own employees and contractors.

  5. The Commission considers that it is in the public interest that IC customers should not be made worse off owing to an administrative requirement for escorted access unless there is a security or other reason for it so compelling that it outweighs this public interest.

  6. The Commission notes CBC's comments that the Supreme Court of Canada upheld a Commission decision8 allowing cable companies to do their own installation and repair on BC TEL support structures, reversing a BC TEL attempt to have only its own personnel engaging in these activities. The Court upheld the Commission's jurisdiction to establish policies with respect to telecommunications even if they supersede collective agreements. In the Commission 's view, allowing ICs full and unescorted access to their co-located equipment would be fully consistent with the Commission's findings in Decision 95-139 and Order 2000-1310. In these rulings, the telephone companies were directed to permit cable television undertakings and telecommunications carriers to construct, maintain and operate their own plant and equipment on or in telephone company support structures using their own labour forces or contractors.

  7. The Commission notes that CBC is not requesting unrestricted or unfettered access to all areas of the CO, only to those areas in which their own equipment is co-located. The Commission also notes that Bell Canada et al. has indicated that when Type 1 physical co-location is unavailable, the companies provide Type 2. In such cases the co-locator's equipment is typically placed in a separate area from that of the company to minimize the potential for service disruption to the companies' customers, arising from work activities of co-locators and vice versa.

  8. TELUS argued that unescorted access was not a requirement of Decision 97-15 and it has not initiated actions required to cordon-off TELUS floor space occupied by itself in its COs nor has it investigated whether this would even be possible and the costs entailed. In the company's view, unescorted access would result in a number of unacceptable conditions such as exposure of confidential customer information, labour/union issues, liability provisions, safety and security issues.

  9. Bell Canada et al. argued that access to COs is highly restricted and that it is reasonable for the companies to require that escorts accompany any persons over whom the companies do not have direct management and control. The companies utilize knowledgeable technical personnel to escort and monitor the co-locator's personnel to ensure that all equipment grounding, power arrangements, cable pulling, etc. activities are followed in accordance with the companies' practices. This is done to minimize the prospect of service outages or arrangements that may impact the safety of CO personnel and the operation of the companies' own network facilities.

  10. The Commission notes CBC's points that stringent security measures exist today to limit access to terminals containing customer information, i.e., pass cards and/or user identification and passwords, which are changed frequently. These security measures are commonplace across the industry and have existed for several years. So, even if the personnel of a competitor somehow came into contact with such a terminal it would not be possible to gain access to it without knowing both the user ID and password that applies to the terminal in question. The Commission notes further that the Respondents did not dispute these points.

  11. The Commission notes that the new co-location arrangement that both Bell Canada et al. and TELUS are proposing in order to reduce co-location costs would necessitate the CLECs' equipment residing in an unsecured common area. If there are such extreme possibilities of network damage as suggested by the ILECs, it is inconsistent for ILECs to ask the CLECs to submit to a proposal that they find unacceptable for themselves.

  12. The Commission is of the view that ILEC application to IC personnel in the ILEC CO of security measures that they apply to their own personnel and contractors, should be sufficient for their security requirements. In this regard, the CLG recently approved a consensus report with respect to the procedures ICs have to follow in order to obtain a TELUS security clearance ID card. These include provision of the original copy of a criminal record history or a clearance letter from a law enforcement agency. Applicants outside of Calgary and Edmonton must also provide a passport photo. The Commission also considers that reasonable security measures taken by the ILECs could include, among other things:
  • installation of security cameras or other monitoring systems;
  • installation of barriers to segregate their equipment if they deem it necessary;
  • requiring competitors' personnel to wear badges with computerized tracking systems; and
  • ensuring that competitor's employees and third party contractors undergo the same level of security training as the ILEC employees. To facilitate this, the ILEC should provide information to the competitor on the specific type of training required so that the competitor can conduct its own training.
  1. In light of the above, the Commission is of the view that unescorted access by IC personnel that are subjected to the same security restrictions and checks as ILEC personnel, is reasonable. Therefore, in the Commission's view, there is not a compelling public policy reason that outweighs the public interest in permitting unescorted access, as described earlier. In view of this, the Commission considers that ILEC refusal to allow unescorted access constitutes a violation of s.27(2) of the Act.

CLG to revisit liability in view of unescorted access

  1. Bell Canada et al. noted that their exposure in relation to physical or material damages in the event of accidents or other incidents in COs is substantially different depending upon whether the physical or material damages are incurred by the company's own employees and contractors, or by the competitor's employees or contractors.

  2. TELUS submitted that these limits were predicated on the existence of escorted access and would require re-examination given an unescorted access scenario.

  3. CBC indicated that it would not be opposed to such an exercise, provided it did not delay the implementation of unescorted access to ILEC COs.

  4. The Commission considers that it would be appropriate to revisit the levels of liability established in Decision 97-15. The Commission directs the CLG to discuss the issue.

Implementation at CLG

  1. All parties to the record have indicated a willingness to discuss implementation issues at the CLG. The Commission notes that the CLG is currently dealing with a wide variety of co-location issues and that significant progress is being made. The Commission considers that the CLG is the appropriate forum to discuss any implementation issues that arise from this proceeding, as well as the liability question.

Review and vary of Decision 97-15

  1. In the Commission's view, CBC's application does not constitute a review and vary of Decision 97-15 as it does not take issue with the original correctness of the decision11 but rather is concerned with the continuing appropriateness or ability of the decision to address today's market realities. Decision 97-15's record contained little or no consideration by parties as to the impact the introduction of local competition would have on the co-location regime. The regime is over three years old, there has been a significant shift in technologies, and participants now include, in addition to interexchange carriers, CLECs and DSL service providers.

Determinations

  1. In light of the above, the Commission, by majority decision, directs that Type 2 co-location is to be made available at the option of the party requesting co-location and that unescorted access to the ILECs' COs be permitted. In addition, the ILECs are directed to commence implementation discussions within the CLG.

  2. The Respondents are directed to issue approved Tariffs and COLAs, within 30 days of the date of this decision, based on the Bell Canada Model, as modified below:
  • remove the requirement for escoted access in all co-location arrangements;
  • allow ICs to install, maintain and repair their equipment in all co-location arrangements; and
  • allow ICs access to Type 2 co-location at their request.

The CLG is directed to address any implementation issues, including liability, that arise from this decision.

Yours sincerely,

Ursula Menke,
Secretary General

cc: Brenda Jolicoeur (997-4571)

1The members of the CBC are the following companies: AT&T Canada Inc., C1.com Inc., Call-Net Enterprises Inc., Covad Canada Communications Inc., Gateway Telephone Limited, GT Group Telecom Services Corp., NorthPoint Canada Communications Inc., AXXENT Corp., PSINet Limited, Riptide Networks Inc., UUNET Canada Inc. and Wispra Networks Inc.
2Bell Canada, on behalf of itself, Island Telecom Inc., MTS Communications Inc., Maritime Tel & Tel Limited, NBTel Inc., NewTel Communications Inc. and Saskatchewan Telecommunications (Bell Canada et al.) and TELUS Communications Inc. and TELUS Communications (B.C.) Inc. (TELUS)
3Review of regulatory framework, Telecom Decision CRTC 94-19, 16 September 1994
4Co-location, Telecom Decision CRTC 97-15, 16 June 1997
5Federal Communications Commission in Deployment of Wireline Services Offering Advanced Telecommunications Capability, First Report and Order and Further Notice of Proposed Rulemaking, CC Docket 98-147
6In its ruling, the FCC concluded that: "...we require incumbent LECs to make cageless collocation arrangements available to requesting carriers. In general, we agree with commenters that the use of a caged collocation space results in the inefficient use of the limited space in a LEC premise, and we consider efficient use of collocation space to be crucial to the continued development of the competitive telecommunications market. While we do not prevent incumbent LECs from offering caged collocation arrangements, we require incumbent LECs to make cageless collocation available so as to offer competitors a choice of arrangements ... incumbent LECs must allow competitors to collocate in any unused space without requiring the construction of a room, cage, or similar structure, and without requiring the creation of a separate entrance to the competitor's collocation space."
7See footnote 4
8Telecom Letter Decision CRTC 92-4, British Columbia Telephone Company - Support Structure Agreement, dated 26 June 1992
9Telecom Decision CRTC 95-13, Access to telephone company support structures, dated 22 June 1995
10Telecom Order CRTC 2000-13, dated 18 January 2000
11The Commission set out its current rules for determining whether an application is one for review and variance of a decision in Telecom Public Notice CRTC 98-6, 20 March 1998. In PN 98-6, the Commission stated that, where the application goes to substantial doubt as to the correctness of the original decision at the time it was made, it is a request for a review and variance of that decision. However, where the application relates to the continuing correctness of the decision, the application will generally be treated as a new one.

 

Attachment 1

A physical co-location arrangement generally allows ICs to physically locate transmission facilities owned by the IC in the telephone company's CO. The IC may, in some cases, install the equipment and is generally responsible for its maintenance.

Type 1 physical co-location provides the IC with segregated floor space within the CO for the purpose of locating the IC's transmission equipment. Access to this area by IC personnel or contractors is done through a separate entrance designated to the IC location.

Type 2 physical co-location (sometimes referred to as "cageless co-location") provides the IC with unsegregated floor space within the CO for the purpose of locating the IC's transmission equipment. Where permitted by the ILEC, access to this area by IC personnel or contractors, who have been approved by the ILEC, is only allowed with an escort.

Virtual co-location allows ICs to exchange traffic at a point outside the CO, but provides for dedicated facilities of the IC's choice to be located in the CO to complete the IC's transmission system. Under a virtual co-location arrangement, the telephone company is responsible for the installation and maintenance of the co-located equipment, which is generally supplied by the IC.

Date Modified: 2001-03-30

Date modified: