ARCHIVED - Telecom Order CRTC 2002-382

Telecom Order CRTC 2002-382

Ottawa, 18 September 2002

Amendment of TELUS Québec and Télébec co-location tariffs

Reference: 8622-C12-13/01

1.

In The Commission, by majority decision, approves the Coalition for Better Co-Location - Part VII application for expedited relief with respect to the current co-location regime, dated 17 July 2000, Decision CRTC 2001-204, 30 March 2001 (Decision 2001 - 204), the Commission concluded that competitive local exchange carriers (CLECs) should have access to their co-located equipment in the central offices (COs) of incumbent local exchange carriers (ILECs) 24 hours a day, 7 days a week. In addition, the Commission found that the CLECs' ability to provide a competitive level of service could be impeded by the ILECs' requirement for escorted access to their COs and that, unless there were security or other compelling reasons for escorted access, such a requirement was not in the public interest. The Commission concluded that there were sufficient alternatives available to escorted access since ILECs could impose the same security measures they apply to their own staff and contractors or any other reasonable security measures.

2.

In CRTC reduces co-location space restrictions - Show cause to ILECs other than Bell Canada, Order CRTC 2001-695, 10 September 2001 (Order 2001-695), the Commission directed TELUS Communications Inc. for its serving territories in Alberta and British Columbia, MTS Communications Inc., Aliant Telecom Inc. and Saskatchewan Telecommunications to issue revised tariff pages allowing an existing Type 1 co-locator that has exhausted its initial 20-square-metre maximum in a CO to acquire additional Type 1 co-location space in the CO, in increments of one square metre, where space is available.

3.

In Commission approves terms and conditions for local exchange and local payphone competition in the territories of TELUS Communications (Québec) Inc. and Télébec ltée, Order CRTC 2001-761, 3 October 2001, the Commission stated that it was of the preliminary view that TELUS Communications (Québec) Inc. (TELUS Québec) and Télébec ltée (Télébec) should reflect in their respective tariffs the Commission's determinations on co-location set out in Decision 2001-204 and Order 2001-695. The Commission directed TELUS Québec and Télébec to file comments on its preliminary view.

Responses from the companies

4.

In a letter dated 2 November 2001, Télébec stated that it had no objection to its tariffs reflecting the requirements set out in Decision 2001-204 and Order 2001-695.

5.

In a letter dated 2 November 2001, TELUS Québec stated that it was prepared to amend its tariff as directed by the Commission in Order 2001-695.

6.

With respect to Decision 2001-204, TELUS Québec stated that it was opposed to allowing CLECs unescorted access to its COs since such access could lead to exposure of confidential customer information and raised liability, safety and security concerns. The company suggested that these problems could be resolved by providing segregated access or increased surveillance. TELUS Québec also noted that it would need to comply with zoning, security and maintenance requirements as well as construction standards in implementing any of these measures.

7.

TELUS Québec stated that compliance with the requirement for unescorted access set out in Decision 2001-204 could lead to unforeseen costs and that it was prepared to accept this requirement provided the Commission allowed it to recover any related costs.

Commission analysis and determination

8.

The Commission notes that TELUS Québec and Télébec agreed to have their respective tariffs reflect the directives set out in Order 2001-695 and therefore, considers it is appropriate to require TELUS Québec and Télébec to issue revised tariff pages reflecting the directives set out in that order.

9.

The Commission notes that TELUS Québec's concerns regarding unescorted access were raised by other major ILECs during the proceeding leading to Decision 2001-204. However, in that decision, the Commission found that there was no compelling public policy reason that would outweigh the public interest in permitting unescorted access. The Commission considers there are no grounds that would warrant a different conclusion in the present case.

10.

The Commission notes that TELUS Québec has indicated that it would be prepared to accept the requirement for unescorted access to its COs provided the Commission allowed it to recover the costs it would incur in implementing such access. In this regard, the Commission notes that TELUS Québec and Télébec are subject to a price regulation framework pursuant to Implementation of price regulation for Télébec and TELUS Québec, Telecom Decision CRTC 2002-43, 31 July 2002 (Decision 2002-43).

11.

The price cap formula established in Decision 2002-43 includes an exogenous factor to permit price adjustments for variations in expenses and revenues associated with events that are beyond the companies' control. Pursuant to Decision 2002-43, exogenous adjustments are permitted for events or initiatives that satisfy the following criteria:

a) they are legislative, judicial or administrative actions which are beyond the control of the company;

b) they are addressed specifically to the telecommunications industry; and

c) they have a material impact as measured against the total company.

12.

Accordingly, under the price cap regime, TELUS Québec may recover the costs incurred to implement unescorted access if it satisfies the criteria for exogenous adjustments. In the Commission's view, however, the implementation of new security measures to allow CLECs unescorted access is not an action beyond the control of the company. In this regard, the Commission notes that, in Decision 2001-204, it stated that the security measures that are currently applied by ILECs in relation to their own staff and contractors should be sufficient and that ILECs could apply other reasonable security measures if they deemed it necessary.

13.

The Commission is also of the view that the costs that TELUS Québec may incur to provide CLECs with unescorted access would not have a material impact as measured against the total company. In particular, the Commission considers that local competition in TELUS Québec's territory will be limited given the low population density in that territory. In addition, if local competition is to evolve, the Commission is of the view that CLECs will target the business services segment, as they have done elsewhere in Canada, and will likely provide these services by reselling Centrex services or by using their own facilities. Accordingly, the demand by CLECs for co-location should be limited and the costs associated with providing unescorted access should be minimal.

14.

Given that the criteria for exogenous adjustments cannot be met, the Commission concludes that any costs that may be incurred in providing unescorted access may not be recovered through an exogenous price adjustment.

15.

In light of the above, the Commission directs TELUS Québec and Télébec to issue, within 30 days of the date of this Order, tariff pages reflecting the Commission's determinations on co-location as set out in Decision 2001-204 and in Order 2001-695.

Secretary General

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