ARCHIVED - Telecom - Commission Letter - 8623-C12-03/03 - Show cause - Publishing of certain information filed in confidence

Letter

Our file: 8623-C12-03/03


Ottawa, 9 October 2003


To: Companies - Same list of companies that received the 01 August 2003 Letter

Re: Show cause - Publishing of certain information filed in confidence

In two letters dated 01 August 2003 and 24 September 2003, companies that provided certain data in confidence, in response to CRTC Monitoring activities related to the year 2002, were requested to show cause why that data should not be published in the third "Report to the Governor in Council on the Status of Competition in Canadian Telecommunications Markets/Deployment and Accessibility of Advanced Telecommunications Infrastructure and Services".

The companies were requested to address publication of the following:

1. Based on lines, local market share percentages by major centres, split between incumbents, out-of-territory incumbents and competitors, for the residential, business and wholesale segments;

2. Based on lines, the large incumbents' local market share percentages by province;

3. Based on minutes or revenues, the large incumbents' long distance market share percentages by incumbent operating territories; and

4. Based on fibre-route details, a map displaying major inter-city lit fibre routes.

Responses were received from Allstream Inc., Bell Canada (on behalf of itself, Aliant Telecom Inc., BCE Nexxia Inc., MTS Communications Inc., NorthernTel, Limited Partnership and Telebec, societe en commandite, collectively Bell et al), Eastlink, FCI Broadband, Group Telecom, 360networks, Primus, SaskTel (on behalf of itself and Navigata, collectively SaskTel et al), and TELUS (on behalf of TELUS Corporation, TELUS National Systems Inc., TELUS Services Inc. and TELUS Communications (Quebec) collectively TELUS).

Staff has carefully considered the responses from the companies that were received by 25 August and 29 September 2003.

Disclosure of information for which confidentiality has been claimed is assessed in light of sections 38 and 39 of the Telecommunications Act and section 19 of the CRTC Telecommunications Rules of Procedure (the Rules). In the case of each request, the public interest in disclosure is weighed against the specific direct harm, if any, likely to result from disclosure. In doing so, a number of factors are taken into account, when assessing each of the items.

The expectation that specific direct harm might result from disclosure is not, by itself, sufficient to justify maintaining a claim of confidentiality. In certain circumstances, substantial harm from disclosure may still be outweighed by the public interest in disclosure.

There is a significant public interest in the disclosure of information, including market share data, with respect to the status of competition in Canadian telecommunications markets.
One of the objectives of the Telecommunications Act as set out in section 7(f) is "to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective."

The Governor in Council's June 2000 Direction requires the Commission to report, annually for five years, on the status of competition in Canadian telecommunications markets. The Direction also requires that the reports include, among other things, relevant data and analyses.

The annual monitoring reports with their underlying data represent a key component of the Commission's ongoing monitoring plan and become an authoritative source of information on the Canadian Telecommunications industry for use by various stakeholders. Open and transparent regulatory processes best serve the public interest, and the information published in the reports assists interested parties in participating in regulatory proceedings.

The information gathered as part of its monitoring activities enables the Commission to determine more effectively (a) the state of competition and (b) the effect of competition on services to consumers and business customers. Such information is also useful in assessing the effectiveness of the Commission's policies, decisions and orders.

Item 1:   Based on lines, local market share percentages by major centres, split between incumbents, out-of-territory incumbents and competitors, for the residential, business and wholesale segments

All companies that responded indicated that any data provided in confidence should be sufficiently aggregated when published so that the companies involved could not be identified.

Bell et al and TELUS noted that out-of-territory incumbents should be part of competitors. TELUS noted that otherwise company specific information would be revealed. Bell et al noted that the underlying data must not be released.

Eastlink noted that most of the companies are public companies for which much of the information in the Monitoring Report for these companies is already available. Since Eastlink is a privately-held company, very limited information is available about the company. Market share information is not readily available and release of this information would cause harm to them. Eastlink also noted that any aggregation of data by type of company (i.e. cable) would also be harmful to Eastlink as they are the only cable providers of local service. This would provide existing and potential competitors with information to develop more effective business and marketing strategies.

Eastlink and GT and 360networks expressed concern that since they are the only competitors in eastern Canada with respect to their respective services, any publication of unaggregated data would expose the companies to severe business risk. Accordingly, Eastlink noted that only national results should be published.

SaskTel et al noted that if the data is published, market details should be published for all companies.

The remaining companies either had no opinion to express or did not respond.

Analysis:  Local competition has evolved more slowly in some areas than in others. Local market share data at the national level, however, would not reflect that fact or indicate the extent to which that is the case. Similarly, due to the significantly different market share that competitors have in the residential and business local segments and the different characteristics of these segments, market share information presented for the total local market would not be representative of either of them.

Data collected on a census metropolitan area (CMA) basis does not align with municipal boundaries and is not representative of specific locations (such as the downtown core, suburban areas or telephone exchange boundaries) within the CMA that may be of particular interest to a competitor. The data underlying the line market share percentages would not be disclosed, nor would there be disclosure of any revenue or line information. All of the above would reduce the potential harm that may result from disclosure of residential, business and total (i.e., residential, business and wholesale) line market share information.

It is noted that there are several safeguards that further mitigate any potential harm that may result from disclosure of this information. In Decision CRTC 2002-1, the Commission modified its win back rules so that an incumbent local exchange carrier (ILEC) cannot attempt to win back a business customer with respect to primary exchange service, and in the case of a residential customer, with respect to primary exchange or any other service, for a period of three months after that customer's primary local exchange service has been completely transferred to another local service provider.

In Public Notices CRTC 2003-1 and CRTC 2003-1-1, the Commission is reviewing the continued appropriateness of ILEC promotions in the local wireline market.

In addition, there are limits placed on ILECs should they choose to compete through the bundling of services. Incumbents must file tariffs for approval demonstrating that the conditions applicable to bundled services, including an imputation test, are met.

Conclusion:  In light of the above, any specific direct harm that may result from disclosure of local line market share information by major centre (as defined by the CMAs) for the residential, business and total (i.e., residential, business and wholesale) by incumbents, out-of-territory incumbents and competitors would be mitigated and would not be sufficient to outweigh the public interest in its disclosure.

Item 2:   Based on lines, the large incumbents' local market share percentages by province

Responses from companies were the same as those expressed for item 1 above.

Analysis:   As noted in item 1 above, local competition has evolved more slowly in some areas of the country than in others. Market information at the provincial level would allow for a comparison of local market share results among the provinces and identify the extent to which various parts of the country have benefited from competition in the local market.

These provincial results do not reflect specific markets (i.e., residential, business and wholesale) or specific locations. Provincial results encompass both urban and rural areas.

As well, the safeguards that were discussed in item 1 are applicable here as well. It is noted that some incumbents publish this information in their annual reports.

Conclusion:  In light of the above, any specific direct harm that may result from disclosure of local market share information on a provincial basis for the large incumbents on a total (i.e., residential, business and wholesale) market basis would be mitigated and would not be sufficient to outweigh the public interest in its disclosure.

Item 3:  Based on revenues or minutes, the large incumbents' long distance market share percentages by incumbent operating territories

Bell et al and TELUS noted that they had no objects to the publication of this data. Bell et al noted however, that the out-of-territory incumbent market share should be included as part of the competitors. SaskTel noted that the CRTC had declared long distance to be so competitive that it can be forborne from regulation. Accordingly, Sasktel concluded that there is no reason why this information should not be released for each telecommunications service provider (TSP).

Analysis:  Long distance market share data at the incumbent operating territory level would allow for a comparison of long distance market share results among those territories and would identify the extent to which various parts of the country have benefited from competition and the extent to which the incumbent has the lion's share of the long distance market. It is noted that some incumbents publish such information in their annual reports.

Conclusion:  In light of the above, any specific direct harm that may result from disclosure of long distance revenue market share information on an incumbent operating territory level for the large incumbents on a total (i.e., residential and business) market basis would not be sufficient to outweigh the public interest In its disclosure.

Item 4 : Based on fibre-route details, a map showing displaying major inter-city lit fibre routes

All companies that responded indicated that any data provided in confidence should be sufficiently aggregated when published so that the companies involved could not be identified.

Bell et al, SaskTel et al and TELUS noted that the term "major fibre routes" was not defined. Bell et al, Rogers and TELUS questioned the usefulness of such a map. Bell et al stated that although individual companies would not be identified, this contradicts the statement that incumbent and competitor routes would not be identified. As well, it indicated that they were unclear as to what extent capacity would be indicated.

GT and 360networks expressed concern that since they are the only competitors in eastern Canada, any publication of unaggregated data would expose the companies to severe business risk.

SaskTel et al noted that they had no objections except that a clear definition of major fibre routes was not provided and according expressed some concern at staff's ability to generate such as a map.

Rogers expressed concern that competitors would be able to identify some of their routes that would enable competitors to more effectively target Rogers' market. Rogers also noted that identification of the location of the routes poses a security risk.

TELUS noted that it had no objections except for its comments noted above.

Analysis:  The proposed map would not display all fibre routes. The map would display only intra-provincial routes with two or more providers and inter-provincial routes with at least one provider. It is noted that several companies publish such information either in their annual reports or on their web sites. Any security risks resulting from a display of the fibre routes are extremely limited, as the map would not provide any details such as the specific originating or terminating points of the route or the actual path of the routes.

Conclusion:  In light of the above, any specific direct harm that may result from displaying intra-provincial fibre routes with two or more providers and inter-provincial fibre routes with at least one provider would not be sufficient to outweigh the public interest in its disclosure.

In light of the above, the information in question as concluded for each of the above items can be published in the third annual monitoring report.

Yours sincerely,


Shirley Soehn
Executive Director, Telecommunications

c.c.: Steve Malowany, CRTC, (819) 993-2167