ARCHIVED - Telecom Decision CRTC 2002-37

Telecom Decision CRTC 2002-37

Ottawa, 27 June 2002

Independent Members of the Canadian Association of Internet Providers - Digital Subscriber Line Internet services by Bell Canada and Bell Nexxia

Reference: 8622-C51-02/01

The Independent Members of the Canadian Association of Internet Providers (IMCAIP) requested that the Commission issue orders to address issues related to the provision of Digital Subscriber Line (DSL) Internet service in the Ontario and Quebec market.

In this decision, the Commission denies the request by IMCAIP, with the following exception. The Commission approves the request by IMCAIP for an order to impose winback rules on Bell Canada with respect to residential retail DSL services in order to prevent potential abuses that may arise from access to commercially sensitive information. The Commission also invites other large incumbent local exchange carriers to show cause, within 30 days, as to why they should not be subject to similar winback rules.

IMCAIP's application

1.

The Independent Members of the Canadian Association of Internet Providers (IMCAIP), submitted an application dated 15 August 2001, seeking relief pursuant to Part VII of the CRTC Telecommunications Rules of Procedure and the Telecommunications Act (the Act), with respect to addressing issues associated with the provision of digital subscriber line (DSL) high-speed Internet services (IS) by independent Internet service providers (ISPs).

Procedural matters

2.

In its application, IMCAIP cited Bell Canada, Bell Nexxia and Bell ActiMedia as respondents.

3.

The Commission initiated an interrogatory process in response to this application. Interrogatories were also submitted by IMCAIP, Bell Canada and Mr. François Ménard. Based on the information in responses to the interrogatories, IMCAIP submitted an amended application dated 22 October 2001 that cited only Bell Canada and Bell Nexxia as respondents.

4.

Bell Canada, on behalf of itself and Bell Nexxia, submitted comments, dated 30 October 2001, on IMCAIP's revised application. Comments in support of IMCAIP's application were submitted by Granite Internet Services Inc., Cybersurf Corp., efni CONNECT, Internet Horizons Inc., and Kingston Online Services. IMCAIP submitted reply comments dated 6 November 2001.

5.

On 18 October 2001, Bell Canada submitted, under tariff notice (TN) 6622, an application to revise its General Tariff Item 5400, proposing to reduce the company's DSL access rates for ISPs. The Commission granted interim approval to this application in Asymmetric digital subscriber line access service, Order CRTC 2001-914, 21 December 2001.

IMCAIP's application

6.

In its revised application, IMCAIP noted that wholesale DSL services are required by independent ISPs in order to configure their own high-speed retail IS offerings. IMCAIP argued that the wholesale rates that Bell Canada and Bell Nexxia charge for these services are considerably higher than the rate that Bell Canada charges for its retail DSL-based high-speed IS (retail DSL IS) to residential end-users. IMCAIP submitted that, as a result, an independent ISP cannot match Bell Canada's retail DSL IS rates, and that independent ISPs cannot compete in the provision of residential retail DSL IS.

7.

By way of relief, IMCAIP requested that the Commission issue a number of orders that would:

• direct Bell Canada to submit a tariff application with supporting documentation, for Commission approval with respect to each retail DSL IS currently being provided by Bell Canada to residential customers;

• direct Bell Canada to submit for Commission approval, a separate tariff for each wholesale DSL service provided to Bell Canada's affiliates, based on modifications to or replacements of the existing voice line cards that are housed within Bell Canada's digital multiplex system (DMS) switches;

• direct Bell Canada to immediately submit for Commission approval, a tariff to permit independent ISPs to acquire Bell Canada's retail DSL IS at rates that are 50% less than the lowest retail rates charged by Bell Canada to residential customers;

• direct Bell Canada to immediately cease and desist from providing all billing and collection services to Bell Canada's unregulated affiliates until the Commission has approved a tariff application by Bell Canada to make these services available to all service providers on a non-discriminatory basis and at cost-based rates;

• direct Bell Canada and/or Bell Nexxia to establish procedures for the confidential treatment of all information provided to them by ISPs and require the establishment of a carrier services group (CSG); and

• establish a set of winback rules for the DSL IS market.

General position of the parties on the state of competition

8.

In support of its various claims for relief, IMCAIP submitted that the provision of residential retail DSL IS in Ontario and Quebec is not competitive for a number of reasons, including the following:

• Bell Canada offers ISPs a wholesale DSL access service pursuant to Item 5400 of its General Tariff that could cost as much as $228.00 per high-speed IS end-user per month, depending on the volume of lines purchased;

• Bell Canada, through its Sympatico division, sells retail DSL IS to residential end-users at rates of $34.95¹ per month (including modem rental), with a promotional price of $19.95 per month for the first six months;

• competitive ISPs cannot offer residential retail DSL IS at the rates charged by Bell Canada without losing substantial sums of money;

• other competitors have not entered the residential market on a facilities basis during the four-year period that DSL IS has been available in Ontario and Quebec; there are a number of competitive ISPs that resell DSL IS to residential customers in Ontario and Quebec, but the underlying facilities-based service provider is Bell Canada or Bell Nexxia;

• Bell Canada's residential retail DSL IS is taking over the market for conventional dial-up IS, also known as low-speed IS, because the price spread between Bell Canada's residential retail DSL IS and conventional dial-up IS is very narrow; and

• independent ISPs cannot respond to Bell Canada's low-pricing behavior by launching their own retail DSL IS, either on a facilities or a resale basis.

9.

IMCAIP argued that, unless the Commission curbs the below-cost pricing practices by Bell Canada and/or its affiliates for retail residential DSL IS, facilities-based entry in either the wholesale or retail segment of the market for residential DSL IS will not occur.

10.

In its comments dated 30 October 2001, Bell Canada argued that the IS market is very competitive. This market is served by a wide variety of service providers, ranging from small local independent companies to large multinational service providers. Bell Canada also argued that Canadian consumers enjoy among the lowest IS access prices and highest IS penetration rates in the world. Bell Canada submitted that IMCAIP's application ignores the dominant position of the cable companies in the provision of retail residential high-speed IS.

11.

Bell Canada disputed IMCAIP's submission that low-speed IS is being taken over by high-speed IS, such as DSL IS. It stated that low-speed dial-up IS constitutes more than 60% of the IS market, and that the low-speed subscriber base continues to grow at a healthy rate.

12.

Bell Canada argued that the essence of IMCAIP's application is to persuade the Commission to mandate higher retail prices for retail DSL IS. Bell Canada submitted that, as the sole beneficiaries, cable companies would be secure in the knowledge that their major competitor, Bell Canada, would be unable to match prices due to regulatory restraint. Bell Canada also submitted that the resulting higher prices would have a negative impact on consumers and the Government of Canada's commitment to expand broadband access to all communities.

13.

In reply comments dated 5 November 2001, IMCAIP argued that the cable companies do not have a restraining effect on Bell Canada's DSL IS because in many rural areas, with the exception of some locations where the cable company offers high-speed IS, Bell Canada and/or Bell Nexxia are the only providers of wholesale high-speed IS and the various network components required by ISPs to provide high-speed IS.

Relief requested

Tariffs for retail DSL services

Position of parties

14.

IMCAIP argued that the Commission should reconsider its decision to forbear from regulating the provision of retail DSL IS by Bell Canada and its affiliates. IMCAIP noted that section 34(3) of the Act obliged the Commission not to forbear from regulation if it finds as a question of fact that to forbear is likely to impair unduly the establishment or continuance of a competitive market. IMCAIP submitted that, given that no facilities-based entry had occurred in the four years since Bell Canada introduced residential retail DSL IS, low-speed and high-speed IS can now no longer be considered as practical substitutes. Accordingly, IMCAIP requested that the Commission issue the following orders directing Bell Canada to:

• submit a tariff application for Commission approval with respect to each retail DSL IS currently being provided by Bell Canada to residential customers; and

• commence charging tariffed rates to all new customers who wish to purchase its wholesale or retail residential DSL IS.

15.

With respect to the requested tariff application, IMCAIP was of the view that each of these tariff applications should be accompanied by economic evaluation studies that demonstrate that the retail rates specified in the tariffs cover all of the underlying costs of the service or services in question, including the tariffed rates of any wholesale services provided by Bell Canada or indirectly by Bell Nexxia.

16.

IMCAIP submitted that significantly different markets have evolved: one for low-speed IS and the other for high-speed IS. In IMCAIP's view, retail high-speed IS such as DSL IS should be considered as a separate market from the market for low-speed IS and should be regulated accordingly. In support of its argument, IMCAIP submitted that there are differences in bandwidth and speed capabilities between low-speed and DSL IS. Low-speed IS can only deliver a small percentage of the on-line capabilities available through high-speed IS. In addition, low-speed end-users cannot access certain service applications that are available only to high-speed end-users, such as Telehealth.

17.

IMCAIP also submitted that there are differences in network configuration between low-speed and DSL IS that lead to separate and unique features, such as the "always on" feature of DSL IS. In contrast to low-speed IS, this feature allows a customer to use the same telephone line simultaneously for both voice telephone calls and Internet access. IMCAIP further submitted that as a result, from an end-user perspective, low-speed IS is not a substitute for high-speed IS.

18.

Bell Canada noted in its comments that section 34 of the Act clearly requires determinations of fact with respect to the status of competition in the relevant market and the fulfillment of Canadian telecommunications policy objectives. Bell Canada noted further that in granting forbearance for retail IS in its various forbearance orders, the Commission followed the analytical framework established in Review of regulatory framework, Telecom Decision CRTC 94-19, 16 September 1994 (Decision 94-19). Bell Canada submitted that should the Commission consider taking the unprecedented act of re-regulating a market, it should apply the same analytical framework to revoke the forbearance determination that was used to justify the original forbearance decision. Bell Canada stated that IMCAIP had not applied an analytical framework or presented evidence to assess the degree of competition in the retail IS market, and that appropriate evidence would have included matters such as the identity and number of competitors, their respective market shares, and the degree of rivalrous behavior.

19.

Bell Canada argued that IS is a single market, consisting of both low-speed dial-up and high-speed IS, and noted that the Commission reached a similar conclusion in Regulation under the Telecommunications Act of certain telecommunications services offered by "broadcast carriers", Telecom Decision CRTC 98-9, 9 July 1998 (Decision 98-9). Bell Canada noted that in that decision, the Commission stated that low-speed and high-speed retail IS share sufficient service attributes to be considered as reasonable substitutes, and thus within the same relevant market. Bell Canada also noted that the Competition Bureau, in its 17 March 1999 summation of an investigation regarding alleged anti-competitive pricing practices by Bell Global Solutions, reached a similar conclusion, on the basis that the prices charged for lower-speed IS impose a significant competitive constraint on the ability of both the cable and telephone companies to price their high-speed IS.

20.

Bell Canada also noted the Commission's statement in Decision 98-9 that service attributes should be the focus of defining the relevant market for the purposes of assessing the state of competition in the market, and that it is not appropriate to define the relevant market with reference to a particular underlying technology, such as DSL.

21.

Bell Canada argued that the facts clearly show that retail residential high-speed IS is competitive, and that its retail DSL IS is priced in response to competition from the cable companies.

22.

In reply comments, IMCAIP stated that it had applied the competitive framework developed by the Commission in Decision 94-19 and that, based on this framework, the retail residential DSL IS market is clearly not competitive.

Commission findings and determinations

23.

In Decision 94-19, the Commission adopted the concept of market power, commonly used in economics and in competition law, as the standard by which to determine whether a market is competitive. As stated in that decision, this criterion is intended to assess the ability of a dominant firm to raise prices above those that would prevail in a competitive market. The Commission also stated that a well-defined product market, which takes into account practical substitutes and other demand features, such as falling prices, rivalrous behavior and aggressive marketing of the product in question, is critical in analyzing market power. Further, once defined, the relevant product market forms the basis for assessing whether there is sufficient competition to warrant forbearance from regulation under section 34 of the Act, as well as any subsequent analysis examining alleged anti-competitive behavior.

24.

In Decision 98-9, the Commission found, among other things, that low-speed and high-speed IS share sufficient service attributes to be considered as reasonable substitutes, and thus should be considered to be part of the same relevant product market.

25.

With respect to IMCAIP's argument that high-speed and low-speed IS have different characteristics and capabilities, the Commission remains of the view, as stated in Decision 98-9, that the service attributes, rather than the particular technology used to deliver the service, define the relevant product market for the purposes of assessing competition.

26.

Accordingly, the Commission considers that a finding that retail DSL IS constitutes a separate and distinct market would require evidence to demonstrate, among other things, that the services in question are not reasonable and practical substitutes for each other or that the price of one service does not influence or constrain the price of the other. The Commission finds that IMCAIP did not provide adequate evidence to establish that the provision of retail residential DSL IS constitutes a separate, relevant market. Moreover, the Commission considers that, in light of the degree of competition between the telephone companies and the cable companies in the provision of high-speed retail residential IS, IMCAIP has failed to demonstrate that this segment of the retail market, even if it were found to be a separate relevant market, is not sufficiently competitive to protect the interests of users.

27.

Accordingly, the Commission finds that there is no basis to rescind its forbearance orders with respect to retail IS and therefore denies IMCAIP's request for an order directing Bell Canada to submit tariffs for its retail residential DSL IS.

Separate wholesale tariffs for DSL services

Position of parties

28.

IMCAIP requested that the Commission order Bell Canada to submit a separate tariff for each wholesale DSL service provided to Bell Canada's affiliates that is based on modifications to or replacements of the existing voice line cards that are housed within Bell Canada's DMS switches.

29.

IMCAIP argued that Bell Canada's current DSL access rate in General Tariff Item 5400 is overpriced and inappropriate because certain DSL services offered by Bell Canada do not use some of the components described in General Tariff Item 5400. For example, the service described in General Tariff Item 5400 is based on stand-alone DSL equipment, such as a DSL access module and other related equipment such as cross-connections and main distribution frames in the telephone company's central office (CO). However, some of the DSL services actually offered by Bell Canada are based entirely on card upgrades to the DMS-100 switch, and do not require the stand-alone equipment and the associated costs of such equipment.

30.

Further, IMCAIP submitted that General Tariff Item 5400 does not properly unbundle, or make available to competitors, the various network components that are associated with the service. IMCAIP argued that Bell Canada must unbundle the modem line cards in the DMS-100 switches that form part of this service.

31.

IMCAIP stated that according to information submitted in this proceeding by Bell Canada, the only party that subscribes to the DSL service offered by Bell Canada pursuant to General Tariff Item 5400 is Bell Nexxia. Accordingly, IMCAIP stated that it is not surprising that, according to publicly available information, independent ISPs have only about 4% of DSL subscribers in Ontario and Quebec.

32.

Bell Canada submitted that the revisions to its General Tariff Item 5400, proposed in Bell Canada TN 6622, would result in significantly lower wholesale DSL access rates for ISPs.

33.

In reply comments, IMCAIP submitted that even at the lower wholesale DSL access rates proposed by Bell Canada in TN 6622, it would not be possible for an independent ISP to match the low retail prices charged by Bell Canada for its retail DSL IS.

34.

Bell Canada also stated that in addition to the wholesale DSL offering by Bell Canada under General Tariff Item 5400, Bell Nexxia provides wholesale DSL IS, which was specifically designed to meet the requirements of the independent ISPs. Bell Canada submitted that Bell Nexxia's wholesale service provides ISPs with unique service capabilities because the interface arrangement allows ISPs to establish a single point of connection within a specific geographic area, thereby avoiding the significant expense associated with interfacing at multiple COs. Bell Canada stated that a significant number of ISPs have subscribed to Bell Nexxia's services, and that the demand for these services continues to grow.

35.

In reply, IMCAIP submitted that, although the Bell Nexxia end-to-end service is priced considerably lower than Bell Canada's wholesale DSL access service, it is still not economic from the standpoint of independent ISPs. Bell Nexxia's DSL access service would cost ISPs approximately $35.00 per subscriber per month. After including other costs of operating an ISP business, such as installation fees, marketing and customer support, and billing and collection, it would not be possible for an ISP to match the retail rates Bell Canada charges for its residential retail DSL IS.

Commission findings and determinations

36.

Given that the rates, terms, conditions, and structure with respect to Bell Canada's wholesale DSL IS are being considered in the Bell Canada TN 6622 proceeding, the Commission denies IMCAIP's request that Bell Canada revise its wholesale DSL IS tariff.

Interim resale tariff

Position of parties

37.

IMCAIP requested that, pending the establishment of cost-based rates for Bell Canada's retail DSL IS as requested in this application, the Commission issue an interim order directing Bell Canada to immediately submit a tariff to permit independent ISPs to acquire Bell Canada's retail DSL IS at rates that are 50% less than the lowest retail rates charged by Bell Canada to residential customers.

38.

Bell Canada argued that the circumstances in this case are entirely different from those leading to the Commission's determination in Application concerning access by Internet Service Providers to incumbent cable carriers telecommunications facilities, Telecom Decision CRTC 99-11, 14 September 1999 (Decision 99-11). In that decision, Bell Canada noted that the Commission directed large Canadian cable companies to provide their high-speed IS to independent ISPs at a mandated discount of 25% below the lowest monthly retail price being charged by the company in question, and that this resale measure would be in effect until such time that interconnection to the companies' high-speed IS facilities became available. Bell Canada submitted that, in contrast, to the cable company situation, its wholesale DSL access tariff has been in place since 1997 and that moreover, Bell Nexxia provides a wholesale DSL access service, which is specifically designed for the independent ISPs.

39.

Bell Canada also stated that the interim arrangement sought by IMCAIP would penalize Bell Canada for its efforts to respond to market pricing by the cable companies. Moreover, since the mandated rates would not be cost based, such an arrangement would cause independent ISPs to become dependent on artificially reduced, subsidized prices. Bell Canada submitted that facilities-based competition would be discouraged because it would be financially more attractive for an ISP to pursue a low-investment, less risky resale approach where a margin is virtually guaranteed and subsidized by a competitor.

40.

In reply comments, IMCAIP submitted that since the relief sought would only be an interim remedy, in effect until cost-based rates are established for Bell Canada's wholesale DSL access service, it is unlikely that any dependencies of the form alleged by Bell Canada would occur.

Commission findings and determinations

41.

The Commission notes that the issue of whether a discounted wholesale rate should be mandated for the cable companies' high-speed IS arose in Decision 99-11 due to the continued lack of access to incumbent cable-carriers' IS facilities. Resale was found to be an appropriate proxy for a service that requires access through interconnection with incumbent cable carriers' telecommunications facilities. In Decision 99-11, the Commission concluded that until cable carriers were in a position to provide access, it would be in the public interest to advance the competitiveness of high-speed IS by providing resale, at a discounted wholesale rate, of the incumbent cable carriers' high-speed IS.

42.

The Commission notes that in the present case, unlike the circumstances found in Decision 99-11, Bell Canada's facilities are generally available to ISPs. In addition, further rate restructuring of Bell Canada's wholesale DSL service is being considered in the Bell Canada TN 6622 proceeding. The Commission, therefore, does not consider that there are sufficient grounds to justify the relief requested and accordingly, denies IMCAIP's request for an interim wholesale rate tariff.

Billing and collection

Position of parties

43.

IMCAIP requested an order directing Bell Canada to immediately cease and desist from providing all billing and collection services to Bell Canada's unregulated affiliates until the Commission has approved a tariff application by Bell Canada to make these services available to all service providers on a non-discriminatory basis and at cost-based rates.

44.

IMCAIP expressed a concern that prior to the transfer of responsibility for retail DSL IS from Bell ActiMedia, a Bell Canada affiliate, to Bell Canada, the latter was providing billing and collection services on a non-tariffed basis. IMCAIP alleged that the provision of billing and collection services to an affiliate would be contrary to section 25 of the Act, unless the services were provided under an approved tariff. Further, IMCAIP submitted that if the billing services were provided on an exclusive basis, Bell Canada would have granted Bell ActiMedia an undue and unreasonable preference, contrary to section 27(2) of the Act.

45.

Bell Canada stated that it does not bill and collect on behalf of its affiliates for IS, and therefore IMCAIP's request for relief should be denied. Bell Canada stated that on 1 June 2001, it assumed responsibility for the provision of retail IS, including DSL IS, and that Bell ActiMedia no longer provides this service. Prior to that date, the IS component was purchased from Bell ActiMedia and resold by Bell Canada, and all end-users were billed directly by Bell ActiMedia, with the exception of the Sympatico High-Speed Edition and Long Distance Bundle, which was billed by Bell Canada.

Commission findings and determinations

46.

Given that Bell Canada is not billing and collecting on behalf of its affiliates with respect to IS, the Commission considers that there is no basis for issuing the order requested by IMCAIP. Accordingly, the Commission denies IMCAIP's request.

Treatment of confidential information and establishment of a carrier services group

Position of parties

47.

IMCAIP requested an order directing Bell Canada and/or Bell Nexxia to establish procedures for the confidential treatment of all information provided to them by ISPs. In IMCAIP's view, these procedures should be no less stringent than those that apply to the information provided to Bell Canada's CSG by long distance carriers and competitive local exchange carriers. These procedures should also ensure that none of the employees within the retail operations of either Bell Canada or any of its affiliates can access the information provided by competitive ISPs to the CSG.

48.

IMCAIP also requested an order directing Bell Canada and/or Bell Nexxia to establish a CSG that would be responsible for handling all orders from ISPs for wholesale IS or for other network components and services, which ISPs require to provision their own IS.

49.

IMCAIP submitted that there were many instances of inappropriate disclosure of confidential ISP customer information by Bell Nexxia to Bell Canada's retail operations or technical staff. This information was used to either promote Bell Canada's retail DSL IS or win back customers attempting to switch to the retail DSL IS of independent ISPs.

50.

Bell Canada submitted that the current rules do not permit Bell Nexxia to disclose confidential customer information to Bell Canada for the purpose of marketing Bell Canada's retail DSL IS. Bell Canada noted that although Bell Nexxia operates as a non-dominant carrier, relying on the terms of forbearance granted by the Commission in Forbearance - Services provided by non-dominant carriers, Telecom Decision CRTC 95-19, 8 September 1995, Bell Nexxia is bound by the conditions imposed by the Commission governing the treatment of confidential customer information. Bell Canada also stated that Bell Nexxia does not share information about its wholesale customers with Bell Canada, since this would be in violation of both the CSG approach and the restriction found under Article 11 of the Bell Canada Terms of Service.

51.

Bell Canada stated that Bell Nexxia has a CSG that has been actively serving wholesale customers, including IMCAIP members. According to Bell Canada, the CSG interface for Bell Nexxia is identical in all respects to that available to Bell Canada's wholesale customers.

52.

Bell Canada also stated that it does not use database inquiries made by ISPs to directly target or to win back customers. However, Bell Canada stated that it engages in telemarketing for its retail IS, and that some of those contacted will invariably be current or prospective customers of another ISP.

53.

Bell Canada further stated that ISPs that subscribe to Bell Nexxia's Gateway Access or High-Speed Service are provided access to a complete list of all residential and business lines in Bell Canada's territory for which retail DSL IS can be enabled. ISPs can use this list to market their own services. Alternatively, ISPs may also check DSL availability for particular customers on a query-by-query basis through the Bell Nexxia website. Bell Canada stated that queries entered through the Bell Nexxia website are not disclosed to Bell Canada and are not used in any way to market Bell Canada's DSL IS.

54.

Bell Canada stated that customer queries to its Sympatico website may, however, generate marketing activity since Bell Canada has no way of knowing whether or not a user of the Sympatico website has been in discussions with an independent ISP.

55.

Bell Canada submitted that the instances of inappropriate use of confidential customer information alleged by IMCAIP could easily be the result of coincidence, and consequently, do not provide an adequate basis for concluding a breach of CSG rules or Article 11 of the Bell Canada Terms of Service.

56.

In reply comments, IMCAIP stated that it was unaware that independent ISPs were being served through a CSG and submitted that, at the very least, Bell Nexxia's CSG procedures should be approved by the Commission.

Commission findings and determinations

57.

The Commission notes that Bell Canada and Bell Nexxia must comply with Commission-specified safeguards regarding confidentiality of customer records and that both companies have procedures in place for the protection of confidential information provided to them by ISPs.

58.

Based on the record of this proceeding, the Commission is satisfied that Bell Nexxia complies with the CSG procedures applicable to Bell Canada and other Commission-specified confidentiality provisions, and accordingly, does not consider that further action is required on this matter at this time.

Winback rules

Position of parties

59.

IMCAIP stated that in light of the instances of winback resulting from misuse of confidential customer information, the Commission should implement a comprehensive set of winback rules on Bell Canada's retail DSL IS marketing activities.

60.

IMCAIP requested an order establishing a set of winback rules for the DSL IS market that are similar to the rules set out in other Commission decisions regarding winback, such as those contained in Terms and rates approved for large cable carriers' higher speed access services - Follow-up to Order CRTC 2000-789, Order CRTC 2001-92, 1 February 2001, and those set out in the Commission's letter ruling of 16 April 1998 regarding a CRTC Interconnection Steering Committee dispute on competitive winback guidelines.

61.

Bell Canada argued that IMCAIP's demand for winback rules for DSL IS is predicated on the mistaken belief that Bell Nexxia is not subject to confidentiality restrictions or that its wholesale customers are not protected by a CSG and associated safeguards. Further, Bell Canada argued that IMCAIP's evidence of leakage of confidential customer information can be readily explained by coincident marketing activity.

Commission findings and determinations

62.

The Commission notes that Bell Canada is both a dominant supplier of telecommunications facilities and services required by independent ISPs and a competitor of these ISPs in the provision of retail DSL IS. In addition, Bell Canada's retail DSL IS competes with the high-speed residential IS offered by the cable companies. The Commission considers that restrictions on winback activities, similar to those in place for the cable companies, would be an appropriate added safeguard to prevent potential abuses that may arise from access to commercially sensitive information, such as in instances where DSL customers are in the process of switching their DSL business from Bell Canada to another ISP.

63.

Accordingly, the Commission directs Bell Canada not to:

• directly market to customers who, through a competitive service provider, have given notice of their intention to cancel Bell Canada's DSL IS in order to receive service from an ISP that uses Bell Canada's or an affiliate's wholesale DSL IS; and

• offer discounts or other inducements not generally offered to the public, to customers who personally contact Bell Canada to give notice of their intention to cancel Bell Canada's DSL IS in order to receive service from an ISP that uses Bell Canada's or an affiliate's wholesale DSL IS.

These restrictions are effective for the period commencing on the date of receipt of the notice to cancel the DSL IS and ending 90 days after the date of disconnection.

64.

The Commission considers, on a preliminary basis, that these restrictions should apply to the other large incumbent local exchange carriers in their respective operating territories.

65.

Accordingly, Aliant Telecom Inc., MTS Communications Inc., TELUS Communications Inc., and Saskatchewan Telecommunications may show cause within 30 days of the date of this decision as to why they should not be subject to similar winback rules with respect to their respective residential retail DSL IS.

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