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ARCHIVED - Telecom Decision CRTC 2004-24

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Telecom Decision CRTC 2004-24

  Ottawa, 2 April 2004
 

Cybersurf Corp. v. Shaw Cablesystems G.P. - Enforcement of Telecom Decision CRTC 2003-87

  Reference: 8622-C122-200400656

1.

The Commission received an application from Cybersurf Corp. (Cybersurf), dated 28 January 2004 filed pursuant to Part VII of the CRTC Telecommunications Rules of Procedure, for enforcement of Application by Cybersurf seeking resale of Shaw higher-speed retail Internet service, Telecom Decision CRTC 2003-87, 23 December 2003 (Decision 2003-87). Cybersurf requested that the Commission direct Shaw to provide Cybersurf with Shaw's higher-speed retail Internet service (higher-speed retail IS), in accordance with Decision 2003-87, so that Cybersurf could resell the service to offer higher-speed retail IS to its customers.

2.

On 23 February 2004, the Commission advised the parties that it would adjudicate this matter on an expedited basis, in accordance with the expedited process established in Expedited procedure for resolving competitive issues, Telecom Circular CRTC 2004-2, dated 10 February 2004.

3.

A panel of three Commissioners heard the matter on 26 March 2004. In addition to the oral component of the proceeding and the 28 January 2004 application, the Commission considered Shaw's answer of 4 February 2004 and its 8 March 2004 summary and responses to Commission interrogatories and Cybersurf's reply comments of 6 February 2004 and its 8 March 2004 summary and responses to Commission interrogatories.
 

Regulatory framework

4.

In Regulation under the Telecommunications Act of certain telecommunications services offered by "broadcast carriers", Telecom Decision CRTC 98-9, 9 July 1998, the Commission defined the higher-speed access provided by cable carriers as internet services which offer transmission at speeds above 64 Kbps.

5.

In Terms and rates approved for large cable carriers' higher speed access service, Order CRTC 2000-789, 21 August 2000, the Commission determined that the higher-speed access service should be available for the provision of retail Internet service to end-users, whether residential or business, subject to the imposition of a reasonable volume usage rate that may be applied at the cable carrier's option. The Commission noted in the order that higher-speed retail IS does not include Internet protocol-based voice telephone service, multi-casting, virtual private networks or local area networks.

6.

In Application concerning access by Internet service providers to incumbent cable carriers' telecommunications facilities, Telecom Decision CRTC 99-11, 14 September 1999 (Decision 99-11), pursuant to section 24 of the Telecommunications Act (the Act), the Commission imposed, as a condition of the provision of higher-speed retail IS by incumbent cable carriers, the requirement that such a carrier make its higher-speed retail IS available for resale. The decision required the incumbent cable carriers to provide independent Internet service providers (ISPs) with their higher-speed retail IS at a 25% discount from the lowest retail rate for IS charged by that carrier to a cable customer in the applicable serving area during any one-month period. The Commission determined that the condition to resell the cable carriers' higher-speed retail IS would apply 90 days from the date of that decision and would continue to apply until third party Internet access (TPIA) was provided pursuant to an approved tariff.

7.

In Decision 2003-87, pursuant to section 24 of the Act, the Commission imposed, as a condition of the provision by Shaw of higher-speed retail IS, that, until Shaw provided TPIA under approved tariffs, it make higher-speed retail IS available for resale to provide retail IS, on the following terms:
 
  • Shaw shall provide resale service with characteristics identical to Shaw's regular service in all respects, including, but not limited to throughput;
 
  • Shaw shall provide the service such that ISPs can resell the service as a branded ISP service;
 
  • Shaw shall provide ISPs with the ability to bill ISP end-user customers directly, and for that purpose shall bulk bill the ISP for all charges, and the bulk bill shall contain sufficient information to differentiate charges between the ISP end-users and permit the ISP to bill its end-users; and
 
  • Shaw shall make its higher-speed retail IS available for resale to provide Internet service at a 25% discount from the lowest retail rate, other than $0.00, charged to a cable customer for the retail IS in question in the applicable serving area during any one-month period including any discounts or credits.

8.

In Decision 2003-87, the Commission further considered that where TPIA could be technically provided in accordance with the Commission's decisions and approved tariffs, cable companies must ensure that TPIA is made available forthwith.
 

Issue

9.

Whether Shaw is now providing TPIA service to Cybersurf, in all the serving areas requested by Cybersurf, thereby relieving Shaw of the requirement to enable Cybersurf to resell its higher-speed retail IS.
 

Position of parties

10.

Cybersurf expressed the view that Shaw is not in compliance with the resale condition specified in Decision 2003-87. Cybersurf submitted that Shaw has the obligation to resell its higher-speed retail IS, until Shaw is in the position to actually provide Cybersurf with TPIA. Further, Cybersurf requested that, in the decision, the Commission specify that higher-speed retail IS has a speed of 64 Kbps or greater, and may be resold to business and residence customers.

11.

Cybersurf submitted that it first requested TPIA from Shaw in 2002, and requested resale of Shaw's higher-speed retail IS when Shaw could not provide TPIA. Cybersurf argued that it was uncertain when Shaw would actually be able to provide TPIA, and that there were unanticipated delays of about eight months when Rogers Communications Inc. provided TPIA to Cybersurf in Ontario.

12.

Cybersurf argued that it was losing customers of its dial-up Internet service in Shaw's service territory, as these customers upgraded to higher-speed retail IS, which Cybersurf could not provide.

13.

Cybersurf expressed the view that resale of higher-speed retail IS could be implemented quickly, since Cybersurf already had in place the required operational systems and resold higher-speed retail IS to customers in Ontario.

14.

Shaw stated that it had already rolled out DOCSIS 2.0 in Calgary and Vancouver, and would soon do so in Winnipeg. On that basis, Shaw stated that its network was technically capable to provide TPIA service in those markets pursuant to approved tariffs. Accordingly, Shaw argued that, in its view, Decision 2003-87 did not require the company to resell its higher-speed retail IS in areas where the company's network was technically capable of providing TPIA and where the company was in the process of actually implementing TPIA.

15.

Shaw submitted parallel implementation of resale of higher-speed retail IS and TPIA was not required, and would entail expenditure of significant company resources. Shaw submitted that implementation of resale of its higher-speed retail IS would take about two months in the first location, and about two weeks in each subsequent location, and that implementation of TPIA would take about four months.

16.

Shaw also stated that its higher-speed retail IS should not be resold to business customers, and should not be used to provide voice telephony over the Internet.

17.

Parties disagreed as to whether Shaw's higher-speed retail IS should be made available for resale to serve business customers. Shaw submitted that the 25% discount from the company's lowest promotional rate in a serving area should be applied on an individual customer basis.
 

Commission analysis and determination

18.

The Commission notes that, pursuant to Decision 99-11, the cable carriers, including Shaw, are required to make available their higher-speed retail IS for resale until they provide TPIA pursuant to an approved tariff. In Decision 2003-87, the Commission imposed a condition, pursuant to section 24 of the Act, on the provision of higher-speed retail IS by Shaw that it make its higher-speed retail IS available for resale until Shaw provides TPIA under approved tariffs.

19.

The Commission notes that while Shaw submitted that its network is technically capable of providing TPIA, it agreed with Cybersurf that a number of additional steps must be completed before Shaw will be in a position to provide TPIA to Cybersurf. Therefore, based on the record of this proceeding, the Commission considers that Shaw has not provided TPIA under approved tariffs and is not able to do so without further work.

20.

Further, the Commission notes that Shaw has not made its higher-speed retail IS available for resale to Cybersurf, as specified in Decision 2003-87. Therefore, the Commission finds that Shaw is not in compliance with Decision 2003-87.

21.

The Commission considers that Shaw's obligation to provide its higher-speed retail IS to Cybersurf for the purpose of resale shall cease in a Shaw serving area only when Shaw is in a position to provide TPIA to Cybersurf throughout the entire serving area, so that Cybersurf is in a position to serve its customers anywhere in that serving area using TPIA. The Commission considers that for the purpose of implementation of Decision 2003-87, a serving area means one of the six areas served by Shaw's cable head-ends.

22.

The Commission directs Shaw to make its higher-speed retail IS available for resale to Cybersurf pursuant to the rates and the terms and conditions specified by the Commission in Decision 2003-87, so that Cybersurf is in a position to provide higher-speed retail IS to its customers, within the time periods specified below:
 
  • within three days of this decision, Cybersurf shall inform Shaw, in writing, of the first serving area where Cybersurf wishes to resell Shaw's higher-speed retail IS;
 
  • within forty-five days of receiving that request from Cybersurf, Shaw shall make its higher-speed retail IS available to Cybersurf for resale in that serving area;
 
  • once Shaw makes its higher-speed retail IS available to Cybersurf for resale in the first serving area, Cybersurf may request resale in a second serving area. In the second serving area, Shaw shall make its higher-speed retail IS available to Cybersurf within two weeks of receiving a written request for resale from Cybersurf; and
 
  • thereafter, for each additional request for another serving area, which requests shall be made sequentially, Shaw shall make its higher-speed retail IS available to Cybersurf for resale within two weeks of receiving a written request from Cybersurf.

23.

The Commission notes that it has defined higher-speed retail IS as IS which offers transmission at speeds above 64 Kbps.

24.

The Commission notes that the 25% discount specified in Decision 2003-87 relates to the lowest retail rate, other than $0.00, within the entire applicable serving area rather than on an individual customer basis.

25.

In addition, the Commission notes that higher-speed retail IS is to be made available for resale to business as well as residential end-users.

26.

Further, the Commission directs parties to enter into a higher-speed retail IS resale agreement within 45 days of the date of this decision. Failure to conclude a resale agreement shall not delay making higher-speed retail IS available for resale, as set out in paragraph 22 above. If Shaw and Cybersurf should be unable to reach a resale agreement within 45 days of the date of this decision, the Commission will be inclined to require the parties to apply the relevant provisions of the previously agreed TPIA agreement, or the TPIA tariff, modified as required to provide for resale.
  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: 2004-04-02

Date modified: