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Telecom Decision CRTC 2003-4
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Ottawa, 31 January 2003
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TELUS Communications Inc. - Fibre Use and Management Agreement
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Reference: 8340-T42-0883/00
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In this decision, the Commission approves on an interim basis, a Fibre Use and Management Agreement between TELUS Communications Inc. (TELUS) and Axia SuperNet Ltd. (the Agreement) as a special facilities arrangement pursuant to section 25 of the Telecommunications Act. The Commission is also initiating a proceeding to consider whether it would be appropriate for TELUS to provide inter-exchange fibre pursuant to a General Tariff.
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TELUS' application
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1.
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The Commission received from TELUS Communications Inc. (TELUS), on 5 November 2002, an unexecuted Fibre Use and Management Agreement (unexecuted Agreement) between TELUS and Axia SuperNet Ltd. (Axia) for approval under section 29 of the Telecommunications Act (the Act). TELUS stated that terms to be finalized included completion of the maintenance schedules, as well as a number of other items that may be subject to change following a final review by the parties.
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2.
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TELUS filed the unexecuted Agreement in confidence. TELUS stated that, in lieu of an abridged version, it had provided a summary of the Agreement's purpose and its material non-confidential terms (the Summary).
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3.
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The Commission received from TELUS an executed, complete version of the Fibre Use and Management Agreement on 26 November 2002 (the Agreement). The Agreement included a Maintenance Agreement, which had not been included in the 5 November 2002 filing.
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4.
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TELUS filed the Agreement in confidence, submitting that disclosure of such information could reasonably be expected to prejudice the competitive positions of the parties as well as others close to the negotiations. TELUS did not provide an abridged version of the executed Agreement for the public record, stating that it would not be of meaningful assistance to potential interveners in formulating comments.
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5.
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Under the Agreement, TELUS is to provide inter-exchange dark fibre to Axia by way of indefeasible rights of use (IRUs) for use in the Alberta SuperNet project. TELUS stated that the Alberta SuperNet project had been initiated by the Government of Alberta and was being developed through the involvement, and for the benefit of, numerous public and private interests. TELUS noted that the Government of Alberta has described the SuperNet as an ". unprecedented endeavour to provide affordable high-speed network connectivity and Internet access to all universities, school boards, libraries, hospitals, provincial government buildings and regional health authorities throughout the province."
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6.
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TELUS stated that all of the fibres associated with the Agreement are made available as a single package, but will be identifiable on a segment and fibre strand basis. TELUS further stated that, as the fibres on any given segment will be contained in the same fibre optic cables as TELUS fibres, TELUS would retain responsibility for the maintenance of cables and for any associated access and right of way issues.
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7.
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TELUS requested that the Commission exercise its authority under Part IV of the CRTC Telecommunications Rules of Procedure to expedite its review and approval of the Agreement in light of the public interest in the successful and rapid development of the Alberta SuperNet.
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Process
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8.
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By letter dated 16 December 2002, TELUS was notified that the Commission may consider the Agreement, not pursuant to section 29 of the Act, but as a special assembly arrangement for which tariff approval is required pursuant to section 25 of the Act. TELUS was requested to provide both an imputation test in support of the proposed rates and an abridged version of the Agreement, disclosing the proposed rates or providing justification as to why the proposed rates should not be disclosed on the public record.
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9.
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In the 16 December 2002 letter, TELUS was also notified that the version of the Agreement filed on 5 November 2002 would not be considered for approval as it was superseded by the executed Agreement filed 26 November 2002.
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10.
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By letter dated 17 December 2002, TELUS filed an economic evaluation study and an abridged version of the Agreement.
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11.
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By further letter dated 8 January 2003, TELUS requested that the Commission approve the Agreement with an effective date of 31 December 2002.
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12.
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By letter dated 10 January 2003, questions were posed to TELUS. TELUS provided responses by letter dated 14 January 2003. The responses were filed in confidence with an abridged version for the public record.
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13.
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By letter dated 25 January 2003, Mr. François D. Ménard submitted comments.
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TELUS' response of 17 December 2002
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14.
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TELUS submitted that it remained of the view that the Agreement was properly filed under section 29 of the Act, but acknowledged that the Commission may consider the Agreement under section 25 of the Act.
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15.
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TELUS submitted that the economic evaluation study demonstrated that the proposed transaction satisfied the Commission's imputation test requirements for special assembly arrangements.
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16.
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TELUS provided an abridged version of the Agreement, but continued to argue for the confidentiality of certain information, including financial terms, fibre routes, network arrangements, and network management practices.
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17.
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TELUS noted that no third parties sought to participate in the process and submitted that, had a third party intervened, meaningful participation was made possible through the provision, on the public record, of what TELUS considered to be the material terms of the Agreement.
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18.
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TELUS argued that the abridged version of the Agreement met the regulatory and public interest objectives related to public disclosure. TELUS submitted that the information provided in both the abridged Agreement and the Summary was sufficiently aggregated to protect its confidentiality requirements while also providing details sufficient to satisfy the public interest in disclosure. TELUS argued that further disaggregation of information, through disclosure of financial terms, fibre routes and ancillary obligations critical to the management of the arrangement, would provide no further benefit to parties who may come to TELUS seeking a similar arrangement. TELUS further submitted that disclosure of the information filed in confidence would cause specific direct harm to Axia, as disclosure of the specific terms of the Agreement would influence Axia's negotiations with suppliers in the Alberta SuperNet project. TELUS also submitted that the Government of Alberta, and SuperNet suppliers and partners, would experience, by extension, specific direct harm from disclosure of the information.
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19.
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TELUS stated that the financial details of the Alberta SuperNet project as a whole have only been publicly disclosed in the aggregate. TELUS further stated that numerous reports from Bell West Inc., Axia and the Government of Alberta relating to the conclusion of deals associated with the SuperNet project have not disclosed the specific financial terms entered into with suppliers.
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20.
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In addition, TELUS submitted that disclosure of information about network arrangements and network management practices would have a material detrimental impact on the ability of the parties to the Agreement to maintain control over their respective networks.
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21.
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TELUS requested that the Commission issue at least interim approval prior to 31 December 2002 and defer deliberations on the scope of the abridgement if necessary in order to grant interim approval by that date. In this regard, TELUS stated that section 4 of the Agreement will operate to terminate the Agreement if conditions precedent, including Commission approval, are not satisfied or waived by the closing date of 31 December 2002.
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Comments
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22.
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In his comments, Mr. Ménard submitted that approval of the Agreement would be premature. Mr. Ménard also requested disclosure of TELUS' 14 January 2003 responses.
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Commission determinations
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Treatment of the Agreement under the Act
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23.
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The Commission notes that the Agreement sets out terms and conditions associated with provision, by TELUS, of inter-exchange dark fibre by way of IRUs. In Tariff filings related to the installation of optical fibres, Telecom Decision CRTC 97-7, 23 April 1997 (Decision 97-7), the Commission found that the provisioning of optical fibre, including dark fibre, is a telecommunications service as defined by the Act and, accordingly, directed that tariffs applicable to local facilities be filed for the provision of that service. The Commission finds that the provision of inter-exchange dark fibre, as proposed in the Agreement, is a telecommunications service and that tariff approval of the proposed service is, therefore, required pursuant to section 25 of the Act.
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24.
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The Commission considers that the Agreement does not fall within section 29 of the Act because its essence is the provision of a telecommunications service rather than primarily addressing matters falling within section 29, namely, the interchange of telecommunications by means of telecommunications facilities, the management or operation of facilities, or the apportionment of rates or revenues between carriers.
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25.
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The Commission does not agree with Mr. Ménard that approval of the Agreement would be premature. The Commission notes that the economic study filed by TELUS indicates that the proposed rates are compensatory. The Commission considers on a prima facie basis that the service offering satisfies the imputation test.
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26.
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In light of the above, the Commission approves on an interim basis the Agreement pursuant to section 25 of the Act, effective the date of this decision. The Commission directs TELUS to issue tariff pages for the service consistent with the determinations made in this decision by 5 February 2003.
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27.
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The Commission notes that additional information will be available on the public record as a result of this decision. Before considering final approval, the Commission will consider any comments filed by interveners.
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28.
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The Commission notes that it is not open to the Commission to grant a retroactive effective date under section 25 of the Act.
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Disclosure of information provided in confidence
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29.
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In assessing claims of confidentiality, the Commission weighs the public interest in disclosure against the specific direct harm that would likely result from disclosure of the information. The Commission notes that one important regulatory objective in having information disclosed on the public record is to permit meaningful participation by parties in the regulatory process. Another important regulatory objective served by disclosure is to have publicly disclosed tariffs.
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30.
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The Commission requires companies filing special facilities arrangements to provide the proposed rates, along with a description of the proposed service, on the public record. The Commission considers that the disclosure of the proposed rates in the Agreement, along with a description of the specific service to which each rate relates, would ensure that interested parties have a meaningful opportunity to comment on whether the Agreement meets the requirement, under section 27(1) of the Act, that rates for telecommunications services be just and reasonable and the requirement, under section 27(2) of the Act, that Canadian carriers, in relation to a telecommunications service or the charging of a rate for it, do not unjustly discriminate against or give an undue preference toward any person, or subject any person to an undue or unreasonable disadvantage.
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31.
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In the Commission's view, TELUS has not presented sufficient reasons to justify why the rates, along with a description of the services to which they relate, should, exceptionally, not be disclosed in this case. The Commission finds that the specific direct harm that may result from disclosure of the rates, and the services to which they relate, does not outweigh the public interest in the disclosure of this information.
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32.
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Conversely, the Commission finds that the specific direct harm that may result from the disclosure of the other information in the Agreement provided by TELUS in confidence, including the fibre routes, network arrangements and network management practices, outweighs the public interest in disclosure of this information. Accordingly, the Commission upholds TELUS' confidentiality claim with respect to this information.
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33.
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In light of the above, the Commission directs TELUS to provide, on the public record, a revised abridged version of the Agreement, disclosing the rates, including one-time charges, and a meaningful description of the specific service to which each rate relates, by 5 February 2003.
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34.
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The Commission notes that Mr. Ménard's request for disclosure of TELUS' 14 January 2003 responses will be considered at a later date.
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Provision of inter-exchange dark fibre under a General Tariff
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35.
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In Decision 97-7, TELUS, among others, was directed to file a General Tariff applicable to local facilities for optical fibre service. As a result of Decision 97-7, TELUS provides intra-exchange optical fibre pursuant to a General Tariff.
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36.
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In view of the regulatory treatment applicable to intra-exchange optical fibre, the Commission considers that there would be merit in initiating a proceeding to consider whether it would be appropriate for TELUS to similarly provide inter-exchange fibre pursuant to a General Tariff.
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37.
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TELUS is made a party to this proceeding. Other parties wishing to participate fully in this proceeding must notify the Commission of their intention to do so, by 17 February 2003. They should contact theSecretary General by mail at CRTC, Ottawa, Ontario, K1A 0N2, by fax at (819) 953-0795 or by email at procedure@crtc.gc.ca. They are to indicate in the notice their email address where available. If parties do not have access to the Internet, they are to indicate in their notice whether they wish to receive disk versions of hard copy filings.
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38.
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The Commission will issue, as soon as possible after the registration date, a complete list of interested parties and their mailing address (including their email address, if available), identifying those parties who wish to receive disk versions.
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39.
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TELUS and interested parties may file comments, serving copies with the Commission and on all other parties, by 4 March 2003.
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40.
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All parties may file reply comments with the Commission, serving a copy on all other parties, by 19 March 2003.
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41.
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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.
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42.
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Parties can file their submissions on paper or electronically. Submissions longer than five pages should include a summary.
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43.
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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.
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44.
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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 to verify that the document has not been damaged during transmission.
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45.
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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.
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46.
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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.
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Location of CRTC Offices
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47.
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Submissions may be examined or will be made available promptly upon request at the Commission offices during normal business hours:
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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
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10405 Jasper Avenue, Suite 520
Edmonton, Alberta T5J 3N4
Tel: (780) 495-3224
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Secretary General
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This document is available in alternative format upon request and may also be examined at the following Internet site: www.crtc.gc.ca
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Date Modified: 2003-01-31