ARCHIVED - Telecom Public Notice CRTC 2002-4

Telecom Public Notice CRTC 2002-4

Ottawa, 9 August 2002

Competitor Digital Network Access service proceeding

Reference: 8661-C12-10/02; 8678-C12-11/01; 8638-C12-61/02 and
Bell Canada tariff notice 6621

In this Public Notice, the Commission responds to requests from Call-Net Enterprises Inc. (Call-Net) for clarification of, and certain procedural changes to, the follow-up proceedings initiated in Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002 (Decision 2002-34) in connection with the competitor-Digital Network Access (CDNA) service.

The Commission concludes that it is appropriate to combine the follow-up proceedings initiated in Decision 2002-34 with respect to the CDNA service into one CDNA proceeding, comprised of a policy portion and a tariff portion. In addition, the Commission make determinations with respect to the process and the issues that will be addressed in the CDNA proceeding.

The Commission finds that Call-Net's requests with respect to the specific matters to be included in the proceeding constitute requests to review and vary Decision 2002-34. The Commission further finds that it is appropriate to review and vary Decision 2002-34 of its own motion, in order to include these issues as part of the CDNA proceeding.

The Commission further determines that Bell Canada tariff notice 6621 will be considered in the CDNA proceeding. The Commission clarifies that the term "competitor" when used in relation to the CDNA service refers to resellers and Canadian carriers.

Introduction

1.

The Commission received requests dated 12 and 19 June 2002 from Call-Net Enterprises Inc. (Call-Net) for clarification of, and certain procedural changes to, the follow-up proceedings initiated in Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002 (Decision 2002-34) in connection with the competitor-Digital Network Access (CDNA) service.

2.

In Decision 2002-34, the Commission required Aliant Telecom Inc. (Aliant Telecom), Bell Canada, MTS Communications Inc. (MTS) and Saskatchewan Telecommunications (SaskTel) (collectively, the Companies) and TELUS Communications Inc. (TELUS) to develop a CDNA service. The Commission found that competitors using Type A-5 loops to provision Digital Network Access (DNA) service are at a disadvantage relative to these incumbent local exchange carriers (ILECs). The Commission also considered that introducing the CDNA service would foster facilities-based competition.

3.

In Decision 2002-34, the Commission described the ILECs' DNA service as having four components: access, link, intra-exchange channels and a channelizing feature. The Commission found that the access and link components of the ILECs' DNA tariff should be included in the CDNA service. The Commission stated that the access component of the CDNA service is to provide a transmission facility at DS-0, DS-1, DS-3, OC-3 and OC-12 transmission speeds from an end-customer premise to a competitor's switch within the same ILEC serving wire centre area or to the ILEC serving wire centre, in which case it must terminate on the competitor's co-located equipment. The Commission further stated that the link component of the CDNA service is to allow for connection at transmission speeds up to the OC-12 level. The Commission considered that the record of the proceeding that led to Decision 2002-34 (the price cap proceeding) was insufficient to determine whether the intra-exchange component of the ILECs' DNA service and the access and link components of that service, when used in circumstances other than described above, should form part of the CDNA service. The Commission stated it did not consider that the channelizing feature should be included in a CDNA service.

4.

The Commission directed each ILEC to issue an interim CDNA tariff no later than 14 June 2002. The Commission also initiated two follow-up proceedings with respect to the CDNA service. The Commission directed the ILECs to file proposed tariffs for final consideration and related cost studies by 13 September 2002 (the tariff proceeding). The Commission also invited parties to comment on whether the ILECs should make the intra-exchange channel component of the DNA service and the access component of that service, when used in circumstances other than those described in Decision 2002-34, available to competitors as part of the CDNA service. Comments are due 13 September 2002 and reply comments are due 15 October 2002 (the policy proceeding).

5.

By letters dated 12 and 19 June 2002, Call-Net requested that the Commission:

6.

On 27 June 2002, AT&T Canada, the Competition Bureau, the Companies, Futureway Communications Inc. (Futureway), GT Group Telecom Services Corp. (Group Telecom), Microcell Telecommunications Inc. (Microcell), Primus Telecommunications Canada Inc. (Primus Canada), Rogers Wireless Inc. (RWI) and TELUS commented on Call-Net's requests. Call-Net submitted reply comments on 2 July 2002.

The channelizing feature

Positions of parties

7.

Call-Net requested that the Commission clarify that parties may make submissions in the policy and tariff proceedings with respect to the channelizing feature. Call-Net argued that the channelizing feature is an intrinsic feature of the CDNA service. It further argued that a competitor could not use one of the two configurations in which the CDNA service is available in any practical way unless it also acquired the channelizing feature from the ILEC.

8.

AT&T Canada, Futureway, Microcell, Primus Canada and RWI supported Call-Net's request. AT&T Canada submitted that the Commission did not have sufficient information on the competitors' use of each DNA service component when it made its determinations with respect to the CDNA service. AT&T Canada argued that the policy proceeding should therefore provide an opportunity to fully examine the competitors' use of the DNA and CDNA services.

9.

The Companies, Group Telecom and TELUS argued that Call-Net's request to include the channelizing feature of DNA service in the policy and tariff proceedings is an application to review and vary Decision 2002-34 that should have been made under section 62 of the Telecommunications Act (the Act).

10.

The Companies, Group Telecom and TELUS argued that Decision 2002-34 did not contemplate including the channelizing feature in the CDNA service and referred to paragraph 187 of the decision where the Commission stated that it did "not consider that the channelizing feature should be included in a competitor-DNA service". These parties argued that Decision 2002-34 defined the scope of the CDNA service and the issues on which the Commission sought comment. They further argued that Call-Net had not addressed the criteria set out in Guidelines for review and vary applications, Telecom Public Notice CRTC 98-6, 20 March 1998 (Public Notice 98-6) and had failed to demonstrate that there is substantial doubt as to the correctness of the Commission's findings in Decision 2002-34. TELUS argued that Call-Net's application was a collateral attack on the Commission's determination in Decision 2002-34.

11.

In reply, Call-Net rejected the arguments that its request to include the channelizing feature was an application to review and vary Decision 2002-34. Call-Net characterized its request as procedural in nature in that its request addressed the process of the policy and tariff proceedings and not the issue of the components that should be included in the CDNA tariff. Call-Net asked the Commission to take into account the fundamental policy objectives addressed in Decision 2002-34. In this regard, Call-Net noted that the Commission's rationale for establishing the CDNA service was to enhance competition and submitted that the Commission could not reasonably have been expected to develop a CDNA service that, in practice, is not useful to competitors.

12.

Call-Net further requested that, if the Commission were to consider that Call-Net's request was a request to review and vary Decision 2002-34, the Commission vary on its own motion its determination to exclude the channelizing feature from the CDNA service.

Commission determination

13.

The Commission notes that the proposals made by AT&T Canada and Call-Net in the price cap proceeding highlighted these competitors' concerns with regard to the terms of various ILEC services used by competitors to provide services. During the price cap proceeding, the Commission examined these concerns from a regulatory policy perspective and focused on whether either proposal would foster facilities-based competition. As noted in Decision 2002-34, submissions in the price cap proceeding did not provide the Commission with complete information on the competitors' use of the components of the DNA service.

14.

The Commission has considered the record of this proceeding in light of the criteria set out in Public Notice 98-6, and agrees that Call-Net's application amounts to a request to review and vary aspects of Decision 2002-34. In light of information on the record of this proceeding regarding the relationship between the channelizing feature and the CDNA service and the implications of excluding this feature, the Commission considers that there is substantial doubt as to the correctness of its decision to exclude the channelizing feature. Accordingly, as suggested by Call-Net, the Commission considers it appropriate to review and vary this aspect of Decision 2002-34 of its own motion, pursuant to section 62 of the Act.

15.

The Commission considers that it should have as much information as possible regarding competitors' use of the channelizing feature. The Commission therefore invites parties to comment on the channelizing feature of the DNA service in relation to the CDNA service, including rates for that feature, in the context of the policy and tariff proceedings.

Digital inter-exchange transport services and associated links

Positions of parties

16.

Call-Net requested that the Commission amend its process for the policy and tariff proceedings to permit parties to comment on whether the CDNA service should include digital inter-exchange transport services and associated links used by competitors to originate and terminate traffic within local markets. Call-Net argued that these services provide the same functionality as the intra-exchange component of the ILECs' DNA service.

17.

In support of its request, Call-Net also stated that competitive local exchange carriers use inter-exchange facilities extensively within EAS and metropolitan areas to backhaul traffic to their switches. Call-Net also argued that, where there is a competitive supply of these inter-exchange facilities, it is generally not carrier grade. It further noted that the ILECs' tariffs for inter-exchange channel service cross-reference the ILECs' tariffs for DNA service.

18.

Call-Net noted that Decision 2002-34 established an additional follow-up proceeding to consider the Commission's assignment of the ILECs' services, including inter-exchange services, to various price cap baskets. Call-Net argued, however, that the policy and tariff proceedings relating to the CDNA service would be the most appropriate proceedings in which to consider the treatment of digital inter-exchange services and associated links that competitors use to provide services in metropolitan and EAS areas.

19.

AT&T Canada, Microcell and RWI supported Call-Net's request. The Companies, Group Telecom and TELUS argued that Call-Net's request should be denied on the basis that it is a request to review and vary Decision 2002-34 that should have been made under section 62 of the Act. These parties further argued that Call-Net had not demonstrated that there is substantial doubt as to the correctness of the Commission's determinations with respect to the CDNA service. TELUS also submitted that Decision 2002-34 provided no basis on which to conclude that the Commission intended the CDNA service to have an inter-exchange component.

20.

In reply, Call-Net rejected the arguments that its request to amend the process to include consideration of digital inter-exchange transport services and associated links was an application to review and vary Decision 2002-34. Call-Net characterized its request as procedural in nature, arguing that its request addressed the process of the policy and tariff proceedings and not the issue of whether digital inter-exchange transport services and associated links should be included in the tariff for the CDNA service. Call-Net requested that the Commission take into account its objective of fostering competition when making its determination.

21.

Call-Net further requested that, if the Commission were to consider that Call-Net's request was a request to review and vary Decision 2002-34, the Commission vary its determination on its own motion.

Commission determination

22.

The Commission notes that, in Call-Net's submission in the price cap proceeding, Call-Net requested that the Commission re-assign and re-price many ILEC services that competitive carriers use to provide services. In particular, the Commission notes that Call-Net included the ILECs' digital inter-exchange transport services and link services on its proposed list of "Carrier Segment" or competitor services.

23.

In Decision 2002-34, the Commission examined Call-Net's proposal from a regulatory policy perspective and concluded that it would not foster facilities-based competition. Accordingly, the Commission did not adopt Call-Net's proposal in that decision, except as discussed with regard to DNA service. The Commission notes that, when it rejected Call-Net's Carrier Segment proposal, it also rejected Call-Net's proposal to treat the ILECs' digital inter-exchange transport services and associated links as a Competitor Service.

24.

The Commission has considered the record of this proceeding in light of the criteria set out in Public Notice 98-6 and agrees that Call-Net's application amounts to a request to review and vary aspects of Decision 2002-34. In light of information on the record of this proceeding with respect to the competitors' use of the ILECs' digital inter-exchange transport services and associated links in metropolitan and EAS areas, the Commission finds that there is substantial doubt as to the correctness of its decision to exclude digital inter-exchange transport services and associated links. Accordingly, as suggested by Call-Net, the Commission considers it appropriate to review and vary this aspect of Decision 2002-34 of its own motion, pursuant to section 62 of the Act.

25.

The Commission considers that it would be more appropriate to consider competitors' use of digital inter-exchange transport services and associated links in the context of the CDNA service, rather than in the follow-up proceeding relating to service assignment. In the Commission's view, this would permit a more comprehensive consideration of the issues, including the relationship between intra-exchange and inter-exchange services.

26.

The Commission considers that it should have as much information as possible regarding competitors' use of the ILECs' digital inter-exchange services to provide services in metropolitan and EAS areas. The Commission therefore invites parties to comment on digital inter-exchange transport services and associated links in metropolitan and EAS areas in relation to the CDNA service, including rates for these services, in the context of the policy and tariff proceedings.

Need for further process

Positions of parties

27.

In its 12 June 2002 letter, Call-Net requested that the Commission amend the process established in Decision 2002-34 in order to allow the Commission to complete the policy proceeding before the ILECs file final CDNA tariffs and supporting cost studies in the context of the tariff proceeding. Call-Net proposed an alternative schedule, arguing that its proposed approach would be more expeditious than the approach set out in Decision 2002-34.

28.

Most of the parties to the proceeding supported Call-Net's proposal that the Commission should complete the policy proceeding before requiring the ILECs to file final CDNA tariffs and supporting cost studies. As regards Call-Net's alternative schedule, while many parties supported Call-Net's request for an expeditious process, AT&T Canada and the Companies submitted that Call-Net's proposed schedule was unrealistic.

Commission determination

29.

The Commission agrees that it would be appropriate to address policy issues relating to the CDNA service before the ILECs file final tariffs in respect of that service. The ILECs will therefore not be required to submit final tariffs for the CDNA service on 13 September 2002, as directed in Decision 2002-34.

30.

The Commission considers, however, that it is appropriate to maintain 13 September 2002 as the date by which the ILECs submit cost studies for the access and link components of the CDNA service as defined in Decision 2002-34 and as directed in paragraph 247 of that decision. The Commission also notes that, as directed in paragraph 248 of Decision 2002-34, the ILECs are to file modified DNA tariffs that identify the band to which each wire centre or exchange is assigned within the same time period. The Commission acknowledges that further cost studies will be required if the Commission includes additional service components in the final CDNA tariffs or permits the use of the access and link components in circumstances other than those described in Decision 2002-34. The Commission considers that any such cost studies may be based on information included in the cost studies to be submitted by 13 September 2002.

31.

Further, the Commission has determined that it is appropriate to combine the policy and tariff proceedings into one proceeding, comprised of a policy portion and tariff portion. The Commission maintains 13 September 2002, the date established in Decision 2002-34, as the date by which parties may file their comments in the policy portion of the proceeding. The complete process and other associated dates for the proceeding are set out below in the Procedure section. The Commission will set the date for the filing of final CDNA tariffs and any additional cost studies that may be required at the conclusion of this proceeding.

Other matters

Clarification of the term "competitor"

32.

Primus Canada submitted that Decision 2002-34 was vague as to the telecommunications service providers that could use the CDNA service and requested that the Commission clarify the meaning of "competitor".

33.

The Commission clarifies that the term "competitor" when used in relation to the CDNA service refers to resellers and Canadian carriers.

34.

The Commission notes that the interim CDNA tariff issued by TELUS on 14 June 2002 provides that the CDNA service will be available to a customer that is a competing Canadian carrier. The Commission therefore directs TELUS to amend its interim CDNA tariff to include resellers.

Wireless

35.

Microcell and RWI argued that the CDNA service described in Decision 2002-34 is not technologically neutral. These parties submitted that, while wireless service providers (WSPs) use the DNA service to interconnect their networks with those of the ILECs, a WSP does not use the DNA service to provide access between an end-customer premise and its switch.

36.

The Commission notes that in Decision 2002-34, it did not exclude competitors that use wireless technology from the competitors that may use the CDNA service. The Commission therefore considers that the use of the CDNA service by wireless carriers is within the scope of the proceeding.

Simple resale prohibition

37.

Microcell stated that it intended to request that the Commission clarify the application of the prohibition on simple resale of the CDNA service and requested that the Commission confirm that this matter is within the scope of the proceeding.

38.

The Commission notes that, in Decision 2002-34, it stated that in order to avoid distortions in the retail market for the DNA service, a competitor may not engage in simple resale of the CDNA service. The Commission notes that it did not have complete information on competitors' use of each component of the DNA service when it made its determinations. The Commission therefore concludes that parties may make submissions with respect to the application of the simple resale prohibition.

Network configurations

39.

Primus Canada argued that the Commission should permit competitors to use the CDNA service in network configurations other than those described in Decision 2002-34.

40.

Consistent with its other determinations in this Public Notice, the Commission finds that all competitors may make submissions with respect to the network configurations in which they use the ILECs' digital inter-exchange transport services and associated links or components of the ILECs' DNA service.

Bell Canada tariff notice 6621

41.

In Bell Canada Tariff notice 6621, 18 October 2001, Bell Canada proposed to add an item titled "Optical Links Arrangements" to its Access Services Tariff. Bell Canada stated that this item would make optical central office connecting link arrangements available to co-locating Canadian carriers and Digital Subscriber Line Service Providers. This would provide transmission paths, at the OC-3 and OC-12 levels, between an interconnecting competitor's co-located central office building space and Bell Canada's fibre management system in the same central office.

42.

Futureway objected to Bell Canada's proposal on the basis that the optical links would lead only to Bell Canada's own network. Futureway proposed that the tariff should also permit co-located carriers to access another co-located carrier's optical fibre transport network in the same central office.

43.

In reply, Bell Canada stated that it considered Futureway's request was distinct from TN 6621 and should be addressed separately.

Commission determination

44.

The Commission notes that the interim CDNA tariffs issued by the ILECs on 14 June 2002 do not include the link component that a co-located competitor uses to connect its equipment with Bell Canada's equipment. The Commission also notes that the DS-1 and DS-3 interconnection service that is used for this purpose is contained in other sections of the ILECs' tariffs.

45.

The Commission further notes that the optical link component that would permit co-located competitors to connect their equipment with Bell Canada's equipment at OC-3 and OC-12 transmission speeds was proposed by Bell Canada in TN 6621. Co-located competitors in Bell Canada's territory could use this link in conjunction with Bell Canada's DNA service and other Bell Canada services to which they connect.

46.

In the Commission's view, Futureway's request to permit competitors to use Bell Canada's proposed service to connect to non-ILEC facilities in the same central office could involve matters addressed by the Commission's co-location framework and, as such, is beyond the scope of the CDNA proceeding. However, given the relevance of Bell Canada's proposed tariff to the definition of the final CDNA service, the Commission finds that it is appropriate to provide parties with the opportunity to comment on Bell Canada's proposal in the context of the CDNA proceeding.

Call for comments

47.

The Commission invites all parties commenting in the policy portion of the proceeding to include, with reasons, their views on:

48.

The Commission further invites:

49.

In each case, parties are also invited to identify services they provide using the network configurations in question.

50.

The Commission reminds parties that make submissions with respect to whether the CDNA service should include digital inter-exchange transport services and associated links or components of the DNA service, in circumstances other than those set out in paragraph 192 of Decision 2002-34, to include a discussion of the factors influencing the competitive supply of these facilities by non-ILECs as well as competitors' ability to self-supply those facilities.

Procedure

51.

Aliant Telecom, Bell Canada, MTS, SaskTel and TELUS (the ILECs) are made parties to this proceeding. The Commission will issue a complete list of interested parties as soon as possible.

52.

All parties may file with the Commission, serving a copy on all other parties, their comments on matters in the policy portion of the proceeding by 13 September 2002.

53.

The ILECs are to file cost studies as directed in Decision 2002-34, including the associated rates determined based on the rate structure set out in paragraph 247 of that decision, by 13 September 2002.

54.

Parties may address interrogatories to the ILECs with respect to their cost studies. Any such interrogatories must be filed with the Commission and served on the ILEC in question by 11 October 2002.

55.

Parties may file reply comments with the Commission, serving a copy on all other parties, on all issues within the policy portion of the proceeding by 15 October 2002.

56.

The ILECs' responses to interrogatories addressed pursuant to paragraph 54 are to be filed with the Commission and served on all parties by 12 November 2002.

57.

Parties' requests for further responses to their interrogatories, specifying in each case why a further response is both relevant and necessary, and requests for public disclosure of information for which confidentiality has been claimed, setting out in each case the reasons for disclosure, must be filed with the Commission and served on all parties by 22 November 2002.

58.

Written responses to requests for further responses to interrogatories and for public disclosure must be filed with the Commission and served on all parties by 29 November 2002.

59.

A determination will be issued with respect to requests for further information and public disclosure as soon as possible, and it is expected that any information to be provided pursuant to that determination will be filed with the Commission and served on all parties by 8 January 2003.

60.

Parties may file comments with the Commission, serving a copy on all other parties, with respect to the cost studies filed by the ILECs on 13 September 2002 by 29 January 2003.

61.

Parties may file reply comments with the Commission, serving a copy on all other parties, with respect to the ILECs' 13 September 2002 cost studies by 10 February 2003.

62.

Where a document is to be filed or served by a specific date, the document must be actually received, not merely sent, by that date.

63.

Parties can file their submissions on paper or electronically. Submissions longer than five pages should include a summary.

64.

Submissions filed in electronic form should be in the HTML format. As an alternative, those making submissions may use Microsoft Word for text and Microsoft Excel for spreadsheets.

65.

Please number each paragraph of your submission. In addition, please enter the line ***End of document*** following the last paragraph. This will help the Commission verify that the document has not been damaged during transmission.

66.

Only those submissions filed in electronic form will be placed on the Commission's web site at www.crtc.gc.ca, and only in the official language and format in which they are submitted.

67.

The Commission also encourages interested parties to monitor the public record of this proceeding (and/or the Commission's web site) for additional information that they may find useful when preparing their submissions.

Locations of CRTC offices

68.

The record of this proceeding may be examined, or will be made available promptly upon request, at the Commission's offices during normal business hours:

Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage, Room G-5
Hull, Quebec K1A 0N2
Tel: (819) 997-2429 - TDD: 994-0423
Fax: (819) 994-0218

Bank of Commerce Building
1809 Barrington Street
Suite 1007
Halifax, Nova Scotia B3J 3K8
Tel: (902) 426-7997 - TDD: 426-6997
Fax: (902) 426-2721

405 de Maisonneuve Blvd. East
2^nd Floor, Suite B2300
Montréal, Quebec H2L 4J5
Tel: (514) 283-6607 - TDD: 283-8316
Fax: (514) 283-3689

55 St. Clair Avenue East
Suite 624
Toronto, Ontario M4T 1M2
Tel: (416) 952-9096
Fax: (416) 954-6343

Kensington Building
275 Portage Avenue
Suite 1810
Winnipeg, Manitoba R3B 2B3
Tel: (204) 983-6306 - TDD: 983-8274
Fax: (204) 983-6317

Cornwall Professional Building
2125 - 11^th Avenue
Room 103
Regina, Saskatchewan S4P 3X3
Tel: (306) 780-3422
Fax: (306) 780-3319

10405 Jasper Avenue,
Suite 520
Edmonton, Alberta T5J 3N4
Tel: (780) 495-3224
Fax: (780) 495-3214

530-580 Hornby Street
Vancouver, British Columbia V6C 3B6
Tel: (604) 666-2111 - TDD: 666-0778
Fax: (604) 666-8322

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