ARCHIVED - Order CRTC 2001-92

Order CRTC 2001-92

Ottawa, 1 February 2001

Terms and rates approved for large cable carriers' higher speed access service - Follow-up to Order CRTC 2000-789

Reference: Cogeco Cable Canada inc. Tariff Notices 3 and 3A; Rogers Communications Inc., Tariff Notices 9 and 9A; Shaw Communications Inc. Tariff Notice 03; Vidéotron ltée Tariff Notices 6 and 6A; and related agreements

Higher speed access service (access service) enables competitive Internet Service Providers (ISPs) to provide higher speed Internet service (IS) using a cable carrier's infrastructure. In Terms and rates approved for large cable carriers' higher speed access service, Order CRTC 2000-789, dated 21 August 2000, the Commission, among other things, approved with respect to the four larger cable carriers: (a) on an interim basis, terms of service and related agreements, and (b) on a final basis, end-user rates and volume usage rate restrictions. The larger cable carriers are Cogeco Cable Canada inc., Rogers Communications Inc., Shaw Communications Inc., and Vidéotron ltée (the cable carriers). The Commission initiated a proceeding to consider its preliminary views respecting winback guidelines, and the applicability to cable carriers of certain terms approved for the telephone companies in respect of customers that are also competitors. The Commission also stated that it intends to initiate a follow-up proceeding to consider outstanding rating issues, including point of interconnection (POI) and service charges.

The Commission invited comments on the following issues:

a) whether the terms that apply to the cable carriers' access services relating to:

· liability for anti-competitive acts,

· termination clauses, and

· service outages

should be the same as the terms approved in Altering terms of service for competitors that are customers, Order CRTC 2000-397, dated 12 May 2000 for telephone companies and, if not, what the terms in question should be; and

b) the Commission's preliminary view that its determination on winback made under the Broadcasting Act in respect of competition in cable service should also apply to cable carriers' access service. The Commission set out its determination on winback guidelines with respect to cable service in a letter dated 1 April 1999, "Re: CISC Dispute - Rules Regarding Communication Between the Customer and the Broadcast Distribution Undertaking".

Comments were received from the Canadian Cable Television Association (CCTA) and the Canadian Association of Internet Providers (CAIP).

Terms of service

In Order 2000-789, the Commission approved for the cable carriers, on an interim basis, terms contained in paragraph 32 of Order 2000-397 with respect to: 1) termination of service for past due amounts, and 2) liability for anti-competitive acts. The CCTA and CAIP agreed that the terms should apply to the cable carriers. The Commission considers that it is appropriate to continue to include these terms in the cable carriers' tariffs for access service.

Service outage reporting

In Order 2000-397, the Commission stated that an interruption in service to competitors, or lack of timely restoration, may indicate anti-competitive conduct by a telephone company. In order to enable the Commission to determine whether an outage could indicate anti-competitive conduct, the Commission directed the telephone companies to report to the Commission the following information for all outages exceeding 15 minutes in duration that affect service to competitor(s):

· the time and location of the outage;

· the competitor(s) affected by the outage;

· the duration and reason for the outage;

· the extent to which the outage affected service to the telephone company's other customers;

· the time at which service was restored to the competitor(s) affected by the outage; and

· the time at which service was restored to the telephone company's other customers.

The CCTA submitted that the Commission's rationale for requiring the reporting of service outages by the telephone companies does not apply to cable carriers because the local networks of cable carriers are shared capacity facilities. The CCTA stated that, if there is a service outage in the network, it would impact all customers served by the affected segment of the network, irrespective of whether they are customers of an ISP or of the cable company. The CCTA submitted that since the opportunity for anti-competitive conduct is minimal to non-existent, service outage reporting would be an unnecessary administrative burden.

CAIP submitted that cable carriers should be obliged to report all service outages that exceed 15 minutes. CAIP noted that while the cable network is a shared resource, a network segment could be serviced heavily by a third-party ISP, which could be affected to its competitive disadvantage by an outage or service interruption in that segment.

The Commission agrees with CAIP that service outages could indicate anti-competitive conduct, particularly if a series of outages affect segments of the network used exclusively by competitive ISPs. The Commission considers that the cable carriers should be required to report service outages in cases where the outage affects customers of competitive ISPs and does not affect the cable carrier's end-customers. The Commission is of the view that a requirement to report outages that exceed one hour would be appropriate to determine whether the carrier may have engaged in anti-competitive conduct.

The Commission directs the cable carriers to report to the Commission, on a monthly basis, the following information for outages exceeding one hour in duration that affect competitive ISPs using access service, but do not affect the cable carrier's own end-customers:

· the time, location and duration of the outage;

· the reason for the outage; and

· the competitor(s) affected by the outage.

Winback rules

The CCTA argued, among other things, that winback rules should not be applied to the access market as the cable carriers are not dominant in the retail IS market (which is defined to include both low and high speed service).

The CCTA submitted that if the Commission concludes that some form of winback restriction is necessary, it is important that the winback rule be applied equally to all facilities-based providers, particularly to the incumbent local exchange carriers (ILECs) and be expressly limited to end-users who switch to an ISP using the underlying facilities-based provider's access service.

CAIP submitted that winback rules are necessary to further the development of a competitive high-speed Internet market. CAIP argued that the current situation is analogous to the local telephone market and the broadcasting distribution market given that the incumbent cable carriers serve almost the entire base of high-speed Internet customers. CAIP argued that ISPs who wish to offer higher speed IS using access service will face a formidable challenge in establishing a competitive marketplace as the incumbents have the ability and incentive to use winback activities to impede competition.

The Commission notes that the appropriateness of applying the existing winback rules to the cable carriers' access services should be considered with reference to the cable carriers' market power in the higher speed access market. The Commission disagrees with the CCTA's position that winback rules are not necessary because the Commission has found that the retail IS market, which includes both low and high speed service, is competitive. As the incumbent cable carriers have a dominant position and substantial market power with respect to higher speed access services, the Commission considers that these carriers would have the incentive and ability to attempt to winback customers that have indicated their intention to transfer to competitive ISPs using the cable carriers' facilities. The Commission also considers that winback activities could impede the development of competition in the higher speed segment of the Internet market.

In light of the above, the Commission confirms its preliminary view that it is appropriate for the winback rules developed in the broadcasting services market to be applied, with some modifications, to the larger carriers' access services.

The Commission directs the larger cable carriers to:

· refrain from direct marketing to customers who, through an agent, have given notice of their intention to cancel Internet service, where the customer wishes to transfer to an ISP that uses the cable carrier's access service, from the date of receipt of the notice to terminate until 90 days from the date of disconnection of Internet service.

· refrain from offering discounts or other inducements not generally offered to the public where customers personally initiate contact with the cable carrier for the purpose of cancelling Internet service, where the customer wishes to transfer to an ISP that uses the cable carrier's access service, from the date of receipt of notice to terminate until 90 days from the date of disconnection of Internet service.

With respect to CCTA's submission that if winback restrictions are found to be necessary, they should apply to all facilities-based service providers, including ILECs, the Commission notes that the scope of this proceeding was limited to determining the appropriate terms for the cable carriers' access services. The Commission is not persuaded that it would be appropriate to initiate, at this time, a proceeding to consider applying winback restrictions more broadly. Such a proceeding may be appropriate in the event that the relative market power of other parties with respect to access service increases.

Terms re confidential information

In Order 2000-789, the Commission gave interim approval to terms respecting the treatment of confidential competitor information by the cable carriers with respect to access service.

In Approval of CSG agreement for third-party Internet access services provided by larger cable carriers, Order CRTC 2000-1079, dated 30 November 2000, the Commission approved, with changes, a standard CSG agreement governing access services requests by competitive ISPs to the larger cable carriers. The Commission determined that this agreement would become effective at the same time as the cable carriers' tariffed terms and conditions of service become effective on a final basis. Accordingly, as of the date of this order, the agreement is effective.

The Commission directs the cable carriers to remove the terms from their tariffs and service agreements dealing with confidential competitor information that are inconsistent or duplicate the terms and conditions contained in the standard CSG agreement.

Final approval of terms

The Commission grants final approval, with changes as outlined in paragraph 19, to the cable carriers' terms and conditions of service and related service agreements, with the exception of schedules 2 and 3 of Vidéotron's interconnection agreement.

Secretary General

This document is available in alternative format upon request and may also be examined at the following Internet site: www.crtc.gc.ca