|
|
Telecom Decision CRTC 2003-37
|
|
|
Ottawa, 12 June 2003
|
|
|
TELUS Communications Inc.'s application for a new process for forbearance from interexchange private line services
|
|
|
Reference: 8640-T42-03/02
|
|
|
The Commission denies the application by TELUS Communications Inc. for a new process for granting forbearance for interexchange private line routes.
|
|
1.
|
On 18 June 2002, TELUS Communications Inc. (TCI) filed an application under Part VII of the CRTC Telecommunications Rules of Procedure requesting that the Commission adopt a new process for granting forbearance, on a timely basis, from regulation of additional interexchange private line (IXPL) routes in lieu of the semi-annual reporting by competitors prescribed in Follow-up Proceeding to Telecom Decision CRTC 97-20: Establishment of criterion and process for considering further forbearance for High Capacity/DDS interexchange private line services, Telecom Order CRTC 99-434, 12 May 1999 (Order 99-434).
|
|
2.
|
The Commission received comments from GT Group Telecom Services Corp. (Group Telecom) and Bell West Inc. (BWI) on 18 July 2002, Aliant Telecom Inc., Bell Canada, Bell Nexxia Inc. (Bell Nexxia), MTS Communications Inc., Saskatchewan Telecommunications (collectively, Bell Canada et al.) and Call-Net Enterprises Inc. (Call-Net) on 19 July 2002, and AT&T Canada Corp. on behalf of itself and AT&T Canada Telecom Services Company (AT&T Canada) on 23 July 2002. Reply comments were received from TCI on 28 August 2002.
|
|
|
Background
|
|
3.
|
In Stentor Resource Centre Inc. - Forbearance from regulation of interexchange private line services, Telecom Decision CRTC 97-20, 18 December 1997, the Commission granted forbearance with respect to the provision of IXPL services for the routes identified in that decision. The Commission noted that high capacity IXPL services are offered and provided on a route-specific basis and that customers require these services on one or more routes. The Commission determined that each route should be considered as a separate market for the forbearance analysis, and that forbearance is appropriate for routes for which rivalrous competition exists or will exist in the near future.
|
|
4.
|
In Order 99-434, the Commission determined that, since the IXPL market is route-specific, forbearance from a route is appropriate if there is at least one competitor that provides, or is offering to provide, IXPL services, at DS-3 or greater bandwidth, to at least one customer on that route using terrestrial facilities other than facilities obtained from an incumbent local exchange carrier (ILEC) serving the territory where the IXPL services are provided, or an affiliate of the ILEC. The Commission directed competitors to report to the Commission semi-annually their IXPL routes that meet this criterion. Order 99-434 also permits ILECs to request forbearance at any time from regulation of IXPL routes not identified by the competitors.
|
|
|
The application
|
|
5.
|
In its application, TCI submitted that a new process for IXPL forbearance was necessary because not all competitors complied with the reporting requirements established in Order 99-434. TCI expressed its concerns that the current process was not working as intended by the Commission. TCI observed that the Commission's web site only showed that Vidéotron Communications Inc. and MK Telecom Network Inc. (now Navigata Communications Inc.) filed reports in 2001, and only MK Telecom Network Inc. filed a report in April 2002. TCI submitted that Call-Net filed only one report in 1999. TCI indicated that AT&T Canada did not file a report for 2001 and filed in April 2002, a report indicating that it had no new qualifying IXPL routes in TCI's territory. TCI further submitted that Shaw Communications Inc. (Shaw) had extensive fibre operations, through its Fibrelink owned by Group Telecom and Big Pipe subsidiaries, but never reported any IXPL routes. No broadcasting distribution undertaking (BDU) or BDU affiliate had ever filed an IXPL report.
|
|
6.
|
TCI alleged that competitors often filed incomplete or late IXPL reports. TCI stated that Group Telecom filed the routes where it provided IXPL service, but apparently did not report the routes where it offered to provide IXPL service.
|
|
7.
|
TCI submitted that, although the Commission ruled in Telecom Order CRTC 99-1113, 2 December 1999 (Order 99-1113), that all IXPL routes that met the forbearance criterion of Order 99-434 should be filed on the public record, Bell Canada, Bell Nexxia and Group Telecom initially filed their reports in confidence.
|
|
8.
|
TCI submitted that, in light of the level of activity in the marketplace over the last two years, and in view of the Commission's Report to the Governor in Council: Status of Competition in Canadian Telecommunications Markets, September 2001, it was apparent that there were many unreported IXPL routes with at least one end in TCI's territory that met the forbearance criterion of Order 99-434.
|
|
9.
|
TCI submitted that while the Commission had previously ruled, in Order 99-1113, against requiring competitors to file "nil" reports, it might be appropriate for the Commission to review its earlier determination in light of the current situation where the prevalence of non-reporting by competitors is clearly not a sign that they have nil to report. TCI stated that it would be prepared to file such reports where it was operating as an out-of-territory competitor.
|
|
10.
|
TCI submitted that a large part of the problem was that competitors simply have no interest or stake in a self-reporting process that on the surface does not provide them with any immediate or direct benefit.
|
|
11.
|
TCI suggested the following process for determining IXPL forbearance:
|
|
|
· semi-annually, each ILEC would file its request for forbearance from regulation of IXPL services on additional routes for which it had evidence the forbearance criterion was being met;
|
|
|
· with respect to any of the routes specified by an ILEC, competitors would have 10 days within which to state, in an affidavit signed by a company officer, that they did not have the capability to offer or provide, to any customer requesting IXPL service on that route, IXPL service that met the forbearance criterion; and
|
|
|
· the Commission would then dispose of the ILECs' forbearance requests, or institute a further process as it deemed appropriate.
|
|
|
Positions of parties
|
|
12.
|
AT&T Canada submitted that TCI's application was predicated on the assumption that competitors did not comply with their filing obligations. AT&T Canada argued that TCI was not unduly prejudiced by potential competitor non-compliance, since the existing process enabled ILECs to request forbearance on routes not identified by competitors.
|
|
13.
|
AT&T Canada argued that the current reporting requirement was the most appropriate and efficient mechanism, and submitted that TCI's application should be dismissed.
|
|
14.
|
Bell Canada et al. stated that they shared TCI's concerns that the current process was not an effective means of identifying IXPL routes which could and should be subject to forbearance. They acknowledged TCI's comment that competitors simply had no interest or stake in a self-reporting process that on the surface did not provide them with any immediate or direct benefit.
|
|
15.
|
Bell Canada and Bell Nexxia argued that the process proposed by TCI would require the ILECs to get involved in the onerous and sometimes impossible task of gathering and presenting competitive evidence in the marketplace, which is not the most effective way to deal with the problem. They noted that the competitors, not the ILECs, possessed the relevant information.
|
|
16.
|
Bell Canada et al. submitted that the process outlined in Order 99-434 was conceptually effective, but that compliance by competitors was lacking. To remedy the non-compliance, Bell Canada et al. proposed the following:
|
|
|
· competitors with no new IXPL routes would be required to file "nil" reports;
|
|
|
· filing of reports would be monitored; and
|
|
|
· competitors failing to file reports should be reminded to do so by the Commission. Recalcitrant service providers should be made subject of a mandatory order, which could be registered with the Federal Court pursuant to section 63 of the Telecommunications Act.
|
|
17.
|
BWI stated that it was not opposed to the process identified by TCI, however, it believed the existing process was useful to ensure that all appropriate IXPL routes were considered forborne.
|
|
18.
|
Call-Net indicated that it had filed its IXPL information, as appropriate. Call-Net stated that it had not added any new routes since its acquisition of fONOROLA in 1998.
|
|
19.
|
Call-Net submitted that in light of the financial conditions of competitors, it was possible that several routes over which the ILECs had been granted forbearance might no longer have sufficient competitive supply. Call-Net suggested that the Commission consider evaluating all existing forborne routes with a view to determining whether the current level of competition still warranted forbearance. In this regard, Call-Net suggested that it may be appropriate for the Commission to consider revoking forbearance from routes vacated by competitors.
|
|
20.
|
Call-Net submitted that TCI's application should be dismissed or deferred until after the Commission had dealt with the follow-up proceeding initiated by Competitor Digital Network Access service proceeding, Telecom Public Notice CRTC 2002-4, 9 August 2002 (Public Notice 2002-4) resulting from Regulatory framework for the second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002 (Decision 2002-34), as it might affect the outcome of this matter.
|
|
21.
|
Group Telecom submitted that competitors take their obligation to file IXPL routes seriously. Group Telecom noted that it had met its obligation to file IXPL routes in 2002.
|
|
22.
|
Group Telecom submitted that the existing process served its intended purpose well and that there were no compelling reasons to change it. However, it would not object to the process proposed by TCI if the following changes were made:
|
|
|
· the ILECs should submit, in their semi-annual filings, the evidence upon which the forbearance requests were based;
|
|
|
· competitors should have 60 days to examine the ILECs' evidence because the process of gathering the information on IXPL routes could take as much as 60 days; and
|
|
|
· the current process should be terminated.
|
|
|
TCI's reply
|
|
23.
|
TCI stated that, with the exception of Call-Net, parties to this proceeding did not object strongly to a review of the IXPL forbearance process, but most noted that if all competitors followed the existing process, a new process would not be necessary. TCI noted that parties to the proceeding pointed out that ILECs could initiate requests for forbearance from additional IXPL routes.
|
|
24.
|
TCI submitted that the Commission should dismiss Call-Net's request not to rule on TCI's application until such time as the Commission ruled on the follow-up proceeding initiated in Public Notice 2002-4. In support of its position, TCI argued that Call-Net did not apply to the Commission to review and vary Order 99-434. In its view, the existing criterion for IXPL route forbearance and for semi-annual reports of new routes by competitors was not part of the scope of the follow-up proceeding to Decision 2002-34.
|
|
25.
|
With respect to Call-Net's suggestion of revoking forbearance on certain forborne IXPL routes, TCI stated that there was no evidence that competitors had withdrawn from forborne routes. In its view, if a competitor had withdrawn from a route, other competitors might have facilities on that route, or consider the route viable.
|
|
26.
|
In its reply,TCI modified its proposed process to the following:
|
|
|
· competitors would continue to file semi-annual reports of new routes on which they had the facilities and the capacity to offer IXPL services;
|
|
|
· each ILEC would examine these reports and question why additional IXPL routes, where it had evidence that competitors provide service, were not included; and
|
|
|
· with respect to any routes identified by the ILEC, the onus would remain on competitors to attest, within 10 days, that they did not offer or provide service to any customer requesting IXPL service.
|
|
27.
|
TCI stated that this proposed process would not be onerous for competitors, since they would already have reviewed where they had facilities for their semi-annual filings, and could quickly respond to the ILECs' requests for forbearance on the additional routes. TCI submitted that the amount of time required for this should not take 60 days, as suggested by Group Telecom, and expressed the view that 10 days should suffice. TCI also stated that exceptions could be made as required.
|
|
|
Commission analysis and determinations
|
|
28.
|
With respect to Call-Net's request that the Commission not make a decision in this proceeding until it releases its decision on the follow-up proceeding initiated by Public Notice 2002-4, the Commission notes that that proceeding will only deal with rates, terms and conditions of service on non-forborne routes, and not with the forbearance criterion for IXPL routes. As such, the Commission denies Call-Net's request.
|
|
29.
|
In regard to Bell Canada et al. and TCI's proposal that competitors file "nil" reports, the Commission notes that there are well over a hundred non-dominant carriers registered with the Commission. The Commission would receive reports from not only the interexchange carriers and the competitive local exchange carriers, but also broadcasting distribution undertakings, hydro and pipeline companies. The Commission considers that to assure complete coverage, the Commission would need to make all telecommunications common carriers registered with the Commission subject to mandatory filing orders, regardless of whether they currently offer IXPL services. This would result in a significant number of carriers having to file "nil" reports on a semi-annual basis. The Commission considers that this would be burdensome, both for carriers and the Commission. The Commission therefore denies the proposal that competitors file "nil" reports.
|
|
30.
|
The Commission notes that TCI's modified proposal would require competitors to file routes where they have the capacity to offer IXPL service at DS-3 or greater bandwidth. In Order 99-434, the Commission directed competitors to file reports identifying all IXPL routes for which they provide or offer to provide IXPL services that meet the criterion established in the order. The Commission found that the mere presence of facilities does not necessarily mean that they will in fact be used to provide services. There must be evidence that service is being offered or provided in order to meet the criterion for forbearance. The Commission considers that TCI's proposal is broader than the directions in Order 99-434 since it would require competitors to report routes where they have capacity. In the Commission's view, TCI's proposal in this regard is not appropriate and accordingly denies this proposed change.
|
|
31.
|
The Commission notes that TCI's modified proposal would permit ILECs to request forbearance for routes in addition to those reported by competitors. The Commission notes that with the current process, the ILECs may request forbearance throughout the year, and not only subsequent to the semi-annual filings by competitors. The Commission considers that in this regard, the current process is less restrictive. Accordingly, the Commission denies TCI's proposed change.
|
|
32.
|
The Commission notes that TCI's modified proposal would provide competitors 10 days to attest that they do not offer or provide IXPL service on a route identified by the ILECs. The Commission also notes Group Telecom's proposal that competitors should have 60 days to examine and respond to the ILECs' evidence. The Commission notes that the standard response time for such applications is 30 days and finds that under the circumstances this continues to be appropriate. Accordingly, the Commission denies TCI's proposed change.
|
|
33.
|
The Commission notes that all parties to this proceeding recognized that the current process can only work satisfactorily if competitors comply with the reporting requirements. The Commission notes competitors' acknowledgment that they have this obligation and that they intend to comply. The Commission further notes that it can itself take the necessary steps to enforce such compliance where it considers it necessary.
|
|
34.
|
The Commission considers that the reports filed in the Fall of 2002 indicate that competitors intend to comply with the filing requirements. In addition, the Commission considers that the ILECs' ability to file, at any time, requests for forbearance from IXPL services on routes that competitors have failed to report, serves as a fundamental check and balance against inaccurate reporting of routes by competitors.
|
|
35.
|
The Commission considers that the present system has worked reasonably well as demonstrated by the fact that the Commission has already forborne from regulating approximately 1,000 different IXPL service routes. As such, the Commission considers that the existing process as directed in Order 99-434 is the most efficient and effective method of determining which IXPL routes warrant forbearance.
|
|
36.
|
With respect to Call-Net's submission that the Commission consider revoking forbearance from routes vacated by competitors, the Commission notes that competitors can at any time report IXPL routes that they have abandoned for the Commission's consideration and disposition. As such, no new process needs to be established with respect to revoking forbearance.
|
|
37.
|
In light of the above, the Commission considers that a change to the forbearance criterion at this time is unnecessary. Accordingly, the Commission denies the application by TCI for a new process for IXPL forbearance. However, the Commission wishes to remind competitors of their regulatory obligation to adhere to the semi-annual filing of IXPL routes in accordance with Order 99-434.
|
|
|
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
|
Date Modified: 2003-06-12