ARCHIVED - Telecom Decision CRTC 2002-4

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Telecom Decision CRTC 2002-4

Ottawa, 24 January 2002

The Commission refrains from regulating international private line services provided by Bell Canada, Aliant Telecom Inc., MTS Communications Inc. and Saskatchewan Telecommunications

Reference: 8640-A53-01/01

With this decision, the Commission refrains from regulating international private line services provided by Bell Canada, Aliant Telecom Inc., MTS Communications Inc. and Saskatchewan Telecommunications. The Commission will retain sufficient powers to protect the confidentiality of customer information and to impose conditions on the delivery of these services as may be required in the future. In addition, the Commission is of the preliminary view that it would be appropriate to extend similar forbearance to other Canadian carriers, and interested persons may comment on this view within 15 days from the date of this decision.

The application

1.

In accordance with Part VII of the CRTC Telecommunications Rules of Procedure, on 26 September 2001 Bell Canada applied on behalf of itself, Aliant Telecom Inc., MTS Communications Inc. and Saskatchewan Telecommunications (the applicants) for forbearance from regulation of international private line (IPL) telecommunications services.

2.

TELUS Communications Inc. (TCI) wrote on 11 October 2001 to support the application. There were no other interventions.

3.

The applicants requested that, pursuant to section 34 of the Telecommunications Act (the Act), the Commission refrain wholly and unconditionally from exercising its powers and performing its duties under sections 24, 25, 27 and 31 of the Act, in relation to the IPL services currently provided by the applicants, and to services of the same class that they may offer in the future. Such services could consist of enhancement to current services, or new services that result from ongoing technological developments or the evolving needs of customers.

4.

The applicants' services presently consist of DS-0, DS-1, DS-3 or other such services from Fort Erie, Windsor, Toronto, Ottawa, Montréal and Vancouver to international locations other than the United States.

5.

The applicants stated that in Telecom Order CRTC 99-1202, dated 22 December 1999, the Commission forbore from section 29 of the Act (the provision requiring prior Commission approval of agreements with other carriers) in relation to IPL services provided by the applicants.

6.

The applicants pointed out that, in Forbearance - Services provided by non-dominant Canadian carriers, Telecom Decision CRTC 95-19, dated 8 September 1995, the Commission forbore from regulating services, including IPL services, provided by Canadian carriers other than the former Stentor Resource Centre Inc. (Stentor) companies, Teleglobe Canada Inc. and Telesat Canada. In Regulatory regime for the provision of international telecommunications services, Telecom Decision CRTC 98-17, dated 1 October 1998, the Commission determined that new entrants into the international market would not be required to file tariffs for approval for their services, including IPL services. In Order CRTC 2001-689, dated 31 August 2001, the Commission determined to forbear from Teleglobe's remaining tariffed services, including IPL services.

7.

The applicants stated that the market analysis provided in Teleglobe's application of 4 April 2001 (which resulted in Order 2001-689) applies the Commission's criteria relating to the current and expected state of competition (as set out in Review of regulatory framework, Telecom Decision CRTC 94-19, dated 16 September 1994) to the international market, and shows that international markets are effectively competitive.

8.

Further, the applicants submitted that the licensing regime established in Decision 98-17 requires licence holders to comply with several conditions, one prohibiting conduct that has or is likely to have the effect of lessening competition unduly in Canada. The Commission deemed this condition sufficient in the case of new entrants. The applicants stated that this conclusion should also apply to the applicants' IPL services, as they are not dominant in that market.

9.

TCI submitted that if the Commission approves this application, the same degree of forbearance should also be extended to IPL services provided by any telecommunications company currently subject to Commission regulation. Specifically, TCI stated that forbearance should apply to services it provides under General Tariff item 507 (tariff CRTC 21461).

Whether forbearance is warranted

10.

In this proceeding, the applicants relied on the market analysis submitted by Teleglobe on 4 April 2001, which was submitted in the proceeding that led to Order 2001-689. In the market analysis, Teleglobe:

· stated that its customers, which are other carriers and large businesses, are sophisticated and knowledgeable, that each can find alternatives to Teleglobe's services, and that many also have the option to self-supply;

· identified specific alternative suppliers based in Canada and the United States for each such service;

· provided evidence that there is adequate satellite and cable capacity available from alternate suppliers, and that there are no barriers preventing customers from switching suppliers;

· submitted evidence on the rapid growth of international submarine cable capacity, and argued that Canadian transmission requirements could easily be accommodated by current market conditions;

· argued that there are no entry barriers and that, since Decision 98-17, American and other foreign-based service providers may offer international telecommunications services originating or terminating in Canada; and

· submitted that, as a minority owner of several submarine cable systems, it is unable to control availability and pricing.

11.

The market for IPL services was one of the markets specifically analysed by Teleglobe. The Commission notes that in this proceeding no party intervened to oppose the applicants' request for forbearance. The Commission is of the view that the market analysis submitted by Teleglobe continues to characterize the market for IPL services, that the market is competitive, that the applicants have no market power and therefore that it would be appropriate to forbear from IPL services provided by the applicants.

12.

Further, the applicants' IPL services will continue to be subject to the international licensing conditions established in Decision 98-17 and subsequently amended.

Scope of forbearance

13.

When forbearing from regulation, the Commission usually finds it appropriate to retain some of its powers under section 24 of the Act to ensure that the confidentiality of customer information is protected, and to be able to impose conditions on service delivery that may be warranted in the future.

14.

The Commission notes that the applicants' Terms of Service protect the confidentiality of customer information in relation to tariffed services. With forbearance, the Terms of Service would not apply. Accordingly, the Commission will retain its powers under section 24 of the Act to ensure that the existing conditions regarding disclosure of confidential customer information to third parties continue to apply, and to impose conditions, related to confidentiality or not, as may be needed in the future.

15.

The Commission also considers it necessary to retain part of its powers under section 27(3) of the Act to ensure compliance with powers and duties not forborne from in this decision.

16.

Pursuant to section 34(1) of the Act, the Commission finds, as a question of fact, that to refrain from exercising its powers and duties under sections 24 (in part), 25 and 31, and sections 27(1), 27(2), 27(3) (in part), 27(4), 27(5) and 27(6) of the Act to the extent set out in this decision with respect to the applicants' IPL services would be consistent with the Canadian telecommunications policy objectives.

17.

Pursuant to section 34(2) of the Act, the Commission finds as a question of fact that the provision of these services is sufficiently competitive to protect the interests of users.

18.

Pursuant to section 34(3) of the Act, the Commission finds that to refrain from exercising the powers and performing the duties to the extent set out in this decision would not likely impair the continuance of a competitive market for these services.

The Commission grants forbearance

19.

The Commission therefore orders that:

a) pursuant to section 34(4) of the Act, effective immediately, sections 24 (in part), 25 and 31, as well as sections 27(1), 27(2), 27(3) (in part), 27(4), 27(5) and 27(6) of the Act do not apply, to the extent that they are inconsistent with the determinations in this decision regarding the applicants' IPL services;

b) on a going forward basis the applicants incorporate, where appropriate, the existing conditions regarding disclosure of confidential customer information to third parties into all agreements or other arrangements with customers for the services forborne in this decision; and

c) the applicants withdraw the relevant tariff pages forthwith.

Other service providers

20.

TCI submitted that, if the Commission approves the application, in order to ensure equity of regulatory treatment, the same degree of IPL forbearance should be extended simultaneously to all telecommunications companies currently subject to regulation on their IPL services, including IPL services provided by TCI. However, TCI did not file a forbearance application.

21.

Based on the findings in this decision, the Commission is of the preliminary view that it would be appropriate to forbear from IPL services provided by any Canadian carrier. Interested parties may comment on the Commission's preliminary view within 15 days of the date of this decision.

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

Date Modified: 2002-01-24

Date modified: