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Telecom Decision CRTC 2004-37

Ottawa, 4 June 2004

Cable modems for third-party Internet access

Reference: 8643-C12-08/02

In this decision, the Commission makes its determinations on the issues set out in Cable modems for third-party Internet access, Telecom Public Notice CRTC 2002-7, 6 December 2002.

The Commission determines that:

  1. a cable modem that is compatible with the cable carriers' networks should, at a minimum, satisfy the 10 requirements listed by the Canadian Cable Television Association in submission HSCO033;
  2. it is appropriate for cable carriers to require that Internet service providers (ISPs) use cable modems meeting Data Over Cable Service Interface Specifications (DOCSIS) for third-party Internet access (TPIA) to their networks. However, in order to allow for the phasing out of proprietary modems, this does not preclude any cable carrier from making special arrangements to provide TPIA using proprietary modems as long as this option is provided on a non-discriminatory basis to all ISPs requesting TPIA. The Commission will address, on a case-by-case basis, any allegations of proprietary modems impeding the development of TPIA. Further, the Commission directs that when a cable carrier moves from a system using proprietary modems to a DOCSIS-based system, the cable carrier shall provide a reasonable transition period for third-party ISPs to move to the DOCSIS-based system;
  3. all cable modems used for TPIA should be required to be certified in accordance with DOCSIS specifications by an appropriate certifying body;
  4. at this time Cable Television Laboratories Inc. should be the sole body responsible for certification;
  5. the minimum requirement for TPIA should be DOCSIS 1.1 certified modems;
  6. any change to the minimum requirement is subject to Commission approval;
  7. second-level testing is warranted at this time, and that at this time the second-level testing should be carried out by the cable carriers;
  8. no second-level testing is required for a cable modem previously found to be compatible with the cable carrier's network or that is the same model as that used by the cable carrier for its customers;
  9. modems submitted to a cable carrier for second-level testing must be DOCSIS-certified;
  10. the cable carriers shall publish summary specifications, which detail specific test plans, as well as which version of DOCSIS, which specific design parameters and which modem information variables are utilized in their networks. With respect to these specifications, the cable carriers must comply with the notification procedures for changes as established by the Commission in Notification of Network Changes, Terminal-to-Network Interface Disclosure Requirements and Procedures for the Negotiation and Filing of Service Arrangements, Telecom Letter Decision CRTC 94-11, 4 November 1994;
  11. company-specific second-level test plans for third-party modems cannot be more demanding than those which a cable carrier uses for testing its own modems;
  12. a modem can only fail second-level testing based on the 10 requirements of HSCO033;
  13. second-level testing must be completed within 28 calendar days from the date that the cable carrier receives the request for testing; and
  14. the cable carriers are not required to troubleshoot modem problems, but that the cable carriers must provide clear and supportable reasons for rejecting a modem, within the specified timeframe.

Further, the Commission directs the cable carriers to file proposed tariffs for second-level testing, for Commission approval, within 30 days of this decision. The tariff must specify that:

  1. the fee does not apply to one modem model submitted by an ISP for second-level testing, per 12-month period;
  2. the fee does not apply to second-level testing of a modem model where the modem model fails second-level testing, to a maximum of two failures; and
  3. modem testing failures shall not be considered the one free second-level testing, unless that modem model has already failed second-level testing twice.

Background

1. In Terms and rates approved for large cable carriers' higher speed access service, Order CRTC 2000-789, 21 August 2000 (Order 2000-789), the Commission approved rates, terms and conditions for third-party Internet access (TPIA) services for Rogers Communications Inc. (RCI), Vidéotron ltée (Vidéotron), Shaw Communications Inc. (Shaw) and Cogeco Cable Canada inc. (Cogeco) (collectively, the cable carriers).

2. In Order 2000-789, the Commission directed that each cable carrier include a term in its tariff requiring that the cable modem used by the Internet service provider (ISP) must be compatible with the cable carrier's access and distribution system. The Commission further directed the cable carriers to amend their tariffs removing references to Data Over Cable Service Interface Specification (DOCSIS), including the requirements for DOCSIS compatibility and compliance.

3. The Commission also identified a number of issues that remained unresolved and found it appropriate for the industry to address various technical, operational and business issues within the framework of the CRTC Interconnection Steering Committee (CISC).

4. Accordingly, CISC established the Cable Access (High Speed) Working Group (HSWG), which included Commission staff, the cable carriers, the Canadian Cable Television Association (the CCTA), the Canadian Association of Internet Providers (CAIP), a number of parties from the ISP industry, a representative for a cable modem vendor and other interested parties.

5. The participants of the HSWG resolved many issues, but did not reach consensus on questions relating to the types of cable modems that ISPs could use to provide high-speed Internet service to their customers. Several of these questions related to DOCSIS, which defines the interface requirements for cable modems involved in high-speed data distribution over cable networks. The HSWG submitted to the Commission a report entitled Unresolved Questions Concerning the Acceptance of Cable Modems, HSRE006, 19 June 2001 (the HSWG report) seeking a determination on the unresolved issues.

6. In its report, the HSWG identified the following six issues for the Commission's consideration:

  1. Clarify the Commission's intent in paragraph 17 of Order 2000-789 when it required that modems be compatible with cable networks for third-party access.
  2. Is DOCSIS certification required for all modems accepted for third-party access to cable networks?
  3. If the answer to Question b) is yes, is Cable Television Laboratories Inc. (CableLabs) an acceptable body to perform modem certification at this time?
  4. Is DOCSIS 1.0, 1.1 or any other version a specific requirement for modems to be used for third-party access to cable networks?
  5. Is it acceptable for cable carriers to require testing, in addition to CableLabs' certification, to ensure compatibility with specific cable networks?
  6. If the answer to Question e) is yes, should there be guidelines for certification and testing that indicate the specific criteria for acceptance of modems (specifying tests, timing, cost recovery, etc.)? Should the guidelines be national or specific to cable networks?

7. The Commission hired Imagineering Telecom Inc., a consulting firm, to assist it in dealing with these issues. On 2 January 2002, the consulting firm submitted its report entitled Report on Third Party ISP Access to Major Canadian Cable Systems (the consultant's report). The consultant's report provided an assessment of the status of cable modem technology and the different compatibility scenarios that have arisen as a result of technical changes to cable modems.

8. In Cable modems for third-party Internet access, Telecom Public Notice CRTC 2002-7, 6 December 2002 (Public Notice 2002-7), the Commission provided its preliminary views on the above six issues and invited comments on these views and other related matters.

Process

9. On 24 January 2003, the Commission received comments from the CCTA on proposed guidelines for second-level testing of cable modems and on the consultant's report. The CCTA's submission included RCI's and Cogeco's second-level test plans. Also on 24 January 2003, the Commission received a proposal for second-level testing guidelines from Vidéotron and comments from François Ménard, on behalf of the Coalition for Better Third Party Access (the CBTPA).

10. On 21 March 2003, the Commission received comments from the CCTA, CAIP and the CBTPA.

11. On 14 April 2003, the Commission received reply comments from the CCTA, CAIP, the CBTPA and TELUS Communications Inc. (TCI).

Issues

(a) Clarification of the Commission's intent, in paragraph 17 of Order 2000-789, regarding cable modem compatibility

Preliminary View

12. In Public Notice 2002-7, the Commission stated its preliminary view that a cable modem that was compatible with the cable carriers' networks should, at a minimum, satisfy the following 10 requirements, listed by the CCTA in submission HSCO033, 23 March 2001:

  1. the modem operates at the technical service levels specified by the cable carrier;
  2. the modem does not cause physical damage to the cable carrier's facilities or physical injury to persons operating, maintaining or using those facilities;
  3. the modem does not cause either the cable carrier's facilities or the facilities of other persons connected to the carrier's network to malfunction;
  4. the modem properly implements the functions used by the cable carrier to monitor its network for operational and/or billing purposes;
  5. the modem does not enable an end-user to circumvent cable carrier mechanisms intended to protect the security or integrity of the network;
  6. the modem properly implements the functions used by the cable carrier to maintain the privacy and security of transmissions over the cable carrier's facilities and does not otherwise operate in a manner which would compromise privacy or security;
  7. the modem properly implements the functions used by the cable carrier to maintain the quality of its services at the level it considers appropriate;
  8. the modem properly implements the functions used by the cable carrier to ensure that all end-users receive fair and proportionate use of the cable carrier's facilities;
  9. the modem does not cause degradation of service to persons other than the end-user of the modem; and
  10. the modem does not interfere with the normal functioning of the cable carrier's facilities or the provision of services, either broadcasting or telecommunications, by the cable carrier.

13. The Commission also stated its preliminary view that it was appropriate for cable carriers to require that ISPs use cable modems meeting DOCSIS specifications for TPIA to their networks. The Commission stated that this did not preclude any cable carriers from making special arrangements to provide TPIA using proprietary modems as long as this option was provided on a non-discriminatory basis to all ISPs requesting TPIA.

Position of parties

14. The CCTA fully supported the Commission's preliminary view that a cable modem must, at a minimum, satisfy the 10 requirements listed in HSCO033, in order to be considered compatible with the cable carriers' networks. The CCTA submitted that DOCSIS had become the de facto standard for high-speed Internet access service over a Hybrid Fibre-Coaxial cable network. The CCTA agreed with the consultant's report that DOCSIS compliance would greatly facilitate the implementation of TPIA. The CCTA agreed that the DOCSIS requirement did not preclude any cable carrier from making special arrangements to provide TPIA using proprietary modems, submitting that this exception was required for the cable carriers that had not yet upgraded to DOCSIS for business and financial reasons. The CCTA further submitted that cable companies that had not yet deployed DOCSIS for business and financial reasons, but that were providing TPIA over their proprietary networks, should be considered to be in compliance with Order 2000-789.

15. CAIP stated that it was in general agreement with the Commission's preliminary views. CAIP questioned the CCTA's support for the cable carriers' on-going use of proprietary modems, submitting that the cable carriers had previously considered DOCSIS to be necessary for TPIA. CAIP further submitted that, during the CISC process, each of the cable carriers had committed to move in a timely manner to DOCSIS. CAIP submitted that the CCTA's new-found support for proprietary modems masked an attempt to keep third-party ISPs off one or more of its members' networks. CAIP supported the Commission's expectation that, regardless of the cable carriers' planned rate of conversion to DOCSIS for their own customers, the cable carriers must implement sufficient DOCSIS capacity to meet the demand for TPIA.

16. In reply, the CCTA agreed that DOCSIS was expected to evolve to be the standard deployed by cable operators for TPIA, but stated that at this stage in its development, financial constraints had prevented some companies from moving forward to a DOCSIS platform. The CCTA submitted that while the Commission indicated in Public Notice 2002-7 that it expected cable operators to implement sufficient DOCSIS capacity to meet the demand for TPIA, the Commission also stated that a cable carrier should not be precluded from making special arrangements to provide TPIA using proprietary modems, if it provided this option on a non-discriminatory basis to all ISPs requesting TPIA. The CCTA noted that the Commission also accepted this scenario in Order 2000-789.

17. CAIP, in its reply comments, submitted that despite continued assertions to the contrary during the CISC process, the CCTA's comments dated 21 March 2003 effectively confirmed CAIP's suspicions that Shaw had no plans to move from its proprietary platform to a DOCSIS standard in the discernable future. CAIP argued that the TPIA rules must ensure that ISPs wishing to enter a TPIA service agreement with Shaw are not discriminated against vis-ŕ-vis ISPs seeking such agreements with DOCSIS-compliant cable carriers, with respect to the use and availability of modems. CAIP stated that, unlike DOCSIS modems, proprietary modems are not readily available from multiple sources at potentially competitive prices. They are manufactured by a single company that owns the intellectual property rights of the design and only in some cases are licensing arrangements extended to other manufacturers. CAIP expressed concern regarding its understanding that the manufacturer of Shaw's proprietary modems had announced plans to discontinue production and that Shaw was attempting to stockpile all remaining units. CAIP submitted that Shaw's decision to stay with a proprietary platform would insulate it from TPIA competition and argued that the Commission must not permit this to happen. CAIP further submitted that the Commission must require cable carriers that choose proprietary platforms to ensure that sufficient quantities of proprietary modems were available for third parties to purchase at reasonable prices. CAIP argued, alternatively, that the cable carriers must make a reasonable portion of their own inventory of proprietary modems available for third-party ISPs to purchase at a cost in line with that of similar DOCSIS modems.

18. TCI submitted that even though DOCSIS was emerging as the de facto standard for cable modems, some cable carriers might continue to use proprietary modem standards and different companies might use different versions of DOCSIS.

Commission analysis and determination

19. The Commission notes that the CCTA fully supported the Commission's preliminary view regarding the 10 requirements listed in HSCO033 and that no party disagreed with this preliminary view.

20. The Commission confirms its preliminary view that a cable modem that is compatible with the cable carriers' networks should, at a minimum, satisfy the 10 requirements listed by the CCTA in submission HSCO033.

21. The Commission notes that, in rejecting the DOCSIS requirements in the cable carriers' proposed tariffs, in Order 2000-789, it had regard to the fact that DOCSIS modems were the subject of a trial, that not all cable carriers were DOCSIS-compliant and that it was uncertain when they would be.

22. The Commission notes that the consultant's report stated that DOCSIS is the generally accepted standard for transmitting data over coaxial cable and that it allows for open access cable systems and consumer choice in service provider and cable modem hardware. The Commission also notes that the consultant's report indicated that, while possible, it is not practical to provide TPIA using proprietary technology. The Commission considers that DOCSIS compatibility will greatly facilitate the implementation of TPIA.

23. The Commission considers that while establishing a DOCSIS standard for TPIA is preferable, allowing for a reasonable time period for DOCSIS implementation is also required. Notwithstanding the general trend in the cable industry towards DOCSIS standardization, the Commission notes that the consultant's report stated that cable carriers have made significant investments in their systems based on proprietary networking solutions and may wish to continue to use their proprietary equipment until it is reasonably depreciated. The Commission further notes the CCTA's comments that financial realities have prevented some companies from moving forward to a DOCSIS platform.

24. The Commission recognizes CAIP's concerns that cable carriers that decide to stay with a proprietary platform should not be permitted to insulate themselves from TPIA competition. The Commission considers that barriers to entry created by, for example, an uncertain supply of proprietary modems should be addressed on a case-by-case basis. The Commission notes that in Application by Cybersurf seeking resale of Shaw higher-speed retail Internet service, Telecom Decision CRTC 2003-87, 23 December 2003, the Commission ordered Shaw to make proprietary modems available to ISPs at a resale rate equal to the lowest retail price at which it sells them to its own customers.

25. In light of the above, the Commission confirms its preliminary view that it is appropriate for cable carriers to require that ISPs use cable modems meeting DOCSIS specifications for TPIA to their networks. However, in order to allow for the phasing out of proprietary modems, this does not preclude any cable carrier from making special arrangements to provide TPIA using proprietary modems as long as this option is provided on a non-discriminatory basis to all ISPs requesting TPIA. The Commission will address, on a case-by-case basis, any allegations of proprietary modems impeding the development of TPIA.

26. Further, the Commission directs that when a cable carrier moves from a system using proprietary modems to a DOCSIS-based system, the cable carrier shall provide a reasonable transition period for third-party ISPs to move to the DOCSIS-based system.

(b) DOCSIS certification for modems accepted for TPIA to cable networks

Preliminary View

27. In Public Notice 2002-7, the Commission considered that certification testing represented the only means by which cable carriers could be assured that modems met the DOCSIS specifications. Therefore, the Commission was of the preliminary view that all cable modems used for TPIA should be required to be certified in accordance with DOCSIS specifications by an appropriate certifying body.

Position of parties

28. The CCTA endorsed the Commission's view regarding the need for DOCSIS certification. The CCTA submitted that while DOCSIS certification did not guarantee a modem's flawless operation over a cable carrier's network, it did provide assurances of basic interoperability between manufacturers' products and between all release versions of those products. The CCTA further submitted that DOCSIS certification must be undertaken by a recognized certifying body.

Commission analysis and determination

29. The Commission considers that the record of this proceeding supports the conclusion that DOCSIS modems have become the de facto standard for high-speed Internet service over cable carriers' networks and that all cable modems used for TPIA should be required to be DOCSIS-certified. The cable carriers either use this standard currently or have plans to upgrade to it.

30. The Commission considers that certification, by an appropriate certifying body, provides assurance that modems do meet the DOCSIS specifications and that particular DOCSIS designs are suitable for the cable carriers' networks.

31. Accordingly, the Commission confirms its preliminary view that all cable modems used for TPIA should be required to be certified in accordance with DOCSIS specifications by an appropriate certifying body.

(c) An acceptable body to perform modem certification

Preliminary View

32. In Public Notice 2002-7, the Commission stated its preliminary view that, until the HSWG reaches consensus on an alternate certifying body, CableLabs should be the sole body responsible for certification.

Position of parties

33. The CCTA supported the Commission's preliminary view. The CCTA submitted that it was in the best interest of manufacturers, third-party ISPs and the cable industry to implement a thorough and comprehensive set of certification tests using the best resources at the lowest prices. The CCTA indicated that CableLabs was recognized as the authority on DOCSIS certification and had a scale of operation that permitted lowered costs despite the increasing complexity of the certification test plan. The CCTA further submitted that the HSWG meetings included discussion of using other certification laboratories; however, participants did not discuss specific facilities or processes in detail and made no progress on the issue.

34. CAIP submitted that a third party unaffiliated with the cable carrier should be part of the testing process to prevent the cable carrier from making secret testing choices and decisions designed to influence the results in an anti-competitive manner.

Commission analysis and determination

35. The Commission notes that the consultant's report stated that CableLabs, as the certifying arm for the industry, had both the mandate and capabilities to correctly certify DOCSIS modems. The Commission further notes that the consultant's report stated that independent laboratory testing for DOCSIS compliance was workable and cited the certification of radio frequency products for Industry Canada as an example of a similar process. The consultant's report further stated that no fundamental reason existed not to permit third-party testing if qualified alternatives to CableLabs could be verified.

36. The Commission notes that no party submitted any specific recommendations with respect to an acceptable alternative body to perform modem certification or with respect to acceptable unaffiliated third-party involvement. The Commission considers that while an alternate certifying body remains an option, the selection of such a body should not delay the implementation of TPIA.

37. Accordingly, the Commission confirms its preliminary view that, until the HSWG reaches consensus on an alternate certifying body, CableLabs should be the sole body responsible for certification. Should the HSWG disagree on the continuing appropriateness of CableLabs being the sole body responsible for certification, the Commission would be prepared to rule on this issue.

(d) Minimum version requirement for TPIA modems

Preliminary View

38. In Public Notice 2002-7, the Commission stated its preliminary view that the minimum requirement for TPIA should be either DOCSIS 1.1 certified modems, or DOCSIS 1.1 hardware-ready modems certified as DOCSIS 1.0.

Position of parties

39. The CCTA submitted that DOCSIS 1.1 should be the minimum version required for TPIA, submitting that DOCSIS 1.1 incorporates a number of features, including fragmentation and enhanced security, which would benefit cable operators and ISPs alike. The CCTA further submitted that the minimum requirements for a cable modem release version should not be considered static. The CCTA stated that the cable carriers reserved the right to change the minimum requirements in the future to ensure that high-speed infrastructure continued to evolve.

40. CAIP supported the Commission's preliminary view. CAIP submitted that, while new supported versions may appear on the market, no ISP should be required to replace their DOCSIS 1.1/1.0 upgradeable modems with new versions as long as the cable carrier continues to deploy the older version for any of its own customers. Otherwise, according to CAIP, this would impose an obligation on an ISP that the cable carrier itself does not bear, which would contradict the principles established in Order 2000-789.

41. CAIP opposed the CCTA's request to permit the cable carriers to unilaterally change the minimum requirements in the future, expressing concern that the cable carriers would use such power as a strategic tool to increase costs for, and thereby thwart competition from, third-party ISPs.

42. In its reply, the CCTA stated that adherence to a DOCSIS 1.1 standard would protect the investment of ISPs and allow them to take advantage of the features associated with DOCSIS 1.1. The CCTA submitted that DOCSIS 1.1 certified or DOCSIS 2.0 upgradeable is the same minimum version that cable carriers are purchasing at this time. The CCTA further submitted that as there had not yet been a TPIA standard established, there would be no apparent harm in third-party ISPs supporting the most recent version universally available from a significant number of competitive vendors. The CCTA noted that the cost difference between a DOCSIS 1.0 and DOCSIS 1.1 modem was negligible.

43. The CCTA submitted that its member companies must protect their networks and platforms against obsolescence. The CCTA submitted that the cable carrier's high-speed service operated within a highly competitive market and that there would be a need to evolve the network and high-speed platform to innovate, remain competitive and offer and support advanced features to its TPIA customers. For these reasons, the CCTA indicated that there was a need to establish a process to notify and support new minimum version requirements for modems.

44. The CBTPA submitted that unduly restricting the modems available for purchase by end-users to CableLabs' DOCSIS 1.0 upgradeable modems would result in unacceptable delays for end-users wanting to subscribe to higher-speed retail Internet service provided over the cable television infrastructure by the CBTPA members or other competitors.

Commission analysis and determination

45. The Commission notes that CAIP considered that the minimum requirement for TPIA should be either DOCSIS 1.1 certified modems or DOCSIS 1.1 hardware-ready modems certified as DOCSIS 1.0. The Commission further notes that the CCTA considered DOCSIS 1.1 certified modems to be the appropriate minimum requirement. Additionally, the Commission notes that the CBTPA expressed concern with restricting end-users' purchasing options to DOCSIS 1.0 upgradeable modems.

46. The Commission notes that the consultant's report indicated that CableLabs accepted an updated version of DOCSIS (version 1.1) with improved security and quality of service capabilities and that the first DOCSIS 1.1 certified cable modems were announced on 29 September 2001. The Commission further notes that no parties to the proceeding challenged the findings of the consultant's report in this regard.

47. The Commission notes the CCTA's position that DOCSIS 1.1 would benefit both cable carriers and ISPs. The Commission further notes the CCTA's submission that the majority of modems being manufactured are DOCSIS 1.1 compliant and that the minimum standard should reflect the latest technology and the current deployments of cable carriers.

48. The Commission notes that there has been no previously approved TPIA standard, and therefore considers that there would be no apparent harm to third-party ISPs in supporting the most recent standard that is universally available. Given the availability of DOCSIS 1.1 certified modems, the Commission no longer considers it appropriate to establish a minimum requirement of DOCSIS 1.1 hardware-ready modems certified as DOCSIS 1.0, as contemplated in its preliminary view.

49. The Commission notes CAIP's submission that no ISP should be required to replace its DOCSIS modems with new versions as long as the cable carrier continues to deploy the older version for any of its own customers. The Commission notes that the CCTA and CAIP disagreed on the cable carriers' right to change the minimum requirements in the future. While the Commission considers it important to encourage the evolution of new technology, the Commission also considers that any change to the minimum requirement should be subject to Commission approval.

50. Accordingly, the Commission determines that the minimum requirement for TPIA should be DOCSIS 1.1 certified modems. This would include modems that were previously deemed to be DOCSIS 1.1 hardware-ready certified as DOCSIS 1.0 and that have been appropriately software upgraded to DOCSIS 1.1. The Commission also determines that any change to the minimum requirement is subject to Commission approval.

(e) Second-level testing to ensure compatibility with specific cable networks

Preliminary View

51. In Public Notice 2002-7, the Commission stated its preliminary view that the DOCSIS certification process alone may not be sufficient since it may not assess all of the parameters that could affect the operation of a modem on a particular cable carrier's network. Accordingly, the Commission was of the preliminary view that second-level testing was warranted at this time. The Commission further stated its preliminary view that the second-level testing should be carried out by the cable carriers until a consensus can be reached by the HSWG on some other acceptable body.

Position of parties

52. The CCTA fully supported the Commission's preliminary view that second-level testing of cable modems for TPIA was warranted.

53. CAIP submitted that second-level testing must be efficient in order to avoid unnecessary delays in the rollout of competitive services.

54. The CBTPA submitted that the Commission should establish principles with respect to the nature of the tests that can be undertaken by a cable carrier. The CBTPA argued that none of the 10 requirements listed in HSCO033 required second-level testing as the DOCSIS certification tests covered each point. The CBTPA stated that its focus was to ensure that, if the Commission considered second-level testing by cable carriers to be necessary, the second-level testing would be conducted for only as long as required to kick-start the operation of DOCSIS 1.1 networks.

Commission analysis and determination

55. The Commission notes that the consultant's report stated that compatibility testing of basic operational functionality of cable modems for TPIA by cable operators will be necessary for some time, citing issues with software, hardware and new technologies. The consultant's report indicated that the cable carriers wish to retain the ability to specify and screen each modem make and model before allowing connection to their cable networks because network incompatibility would require repair beyond the act of de-activating or disconnecting the non-compliant cable modem from the network. The Commission notes that no party challenged these findings.

56. The Commission notes that while the CBTPA considered second-level testing unnecessary, all parties, including the CBTPA, are prepared to accept it.

57. The Commission notes that the consultant's report concluded that additional testing by the cable carriers would be justified during the initial phases of the rollout of TPIA.

58. The Commission notes that the provision of data over the Hybrid Fibre-Coaxial infrastructure is based on very new technology and that the DOCSIS standards, which define this technology, are also new and evolving. The Commission agrees with the consultant's report that, at this point in time, based on issues with software, hardware and new technologies, compatibility testing of basic operational functionality of cable modems by cable operators is necessary.

59. The Commission notes that cable carriers in the United States require second-level testing of cable modems and that there is no evidence to suggest that this additional testing has created any difficulties.

60. Accordingly, the Commission confirms its preliminary views that second-level testing is warranted at this time, and that the second-level testing should be carried out by the cable carriers until a consensus can be reached by the HSWG on some other acceptable body. Should the HSWG disagree on the acceptability of another body, the Commission would be prepared to rule on this issue

(f) Guidelines for second-level testing: test plans, timing, modem failure and cost recovery

Preliminary View

61. In Public Notice 2002-7, the Commission stated its preliminary view that a set of guidelines for second-level testing should be established and that these guidelines should apply on a national basis. The Commission was also of the preliminary view that the guidelines should address a number of specific tests, testing criteria and pre-screening questions. In addition, the Commission's preliminary view was that the guidelines should, at a minimum, include the following:

  1. no second-level testing is required for a cable modem that was previously found to be compatible with the cable carrier's network or that is the same model as that used by the cable carrier for its customers;
  2. modems submitted to a cable carrier for second-level testing must be DOCSIS-certified;
  3. there is no charge for second-level testing;
  4. the second-level testing must be completed within 28 calendar days in order to provide ISPs sufficient time to revise their implementation plan, should any problems arise during the testing period; and
  5. where a particular modem fails the second-level testing, the cable carrier must provide a detailed explanation of the results of the tests.
Second-level test plans
Position of parties

62. The CCTA argued that it would be neither practical nor reasonable to arrive at a single set of second-level test plans.

63. The CCTA noted that both RCI and Cogeco disclosed their current company-specific DOCSIS modem test plans for the Commission's consideration and approval. The CCTA further noted that Vidéotron filed the outline of the second-level test plan used for its own modems. The CCTA indicated that Shaw, which uses a proprietary platform, would not propose any test plan until the company moved to a DOCSIS standard.

64. The CCTA submitted that a number of factors dictated that test plans will differ from company to company, including:

  1. the unique architectures of cable networks;
  2. the number of permutations in the hardware and software version releases of cable modems being operated on a specific cable company's network; and
  3. the unique and customized operation support, billing, provisioning, management and other back-office systems including the use of legacy systems.

65. The CCTA submitted that its members did not consider it practical or appropriate to develop a program of standardized second-level testing that would be unique to Canada. The CCTA further submitted that the rest of the North American industry was working towards minimizing second-level testing through other efforts to develop more comprehensive CableLabs certification tests.

66. The CCTA submitted that following discussions between various stakeholders including cable carriers, ISPs, modem vendors, legislators and the Federal Communications Commission, CableLabs was considering more thorough and comprehensive testing in the certification process that would permit the cable carriers to reduce their second-level testing requirements. The CCTA stated that Canadian consumers would benefit to a greater extent if the Canadian cable industry could use its resources to concentrate on improving the CableLabs certification process rather than attempting to develop and implement a separate set of national guidelines. The CCTA expressed its belief that improvements in the process would happen relatively quickly, and thereby reduce the need for second-level testing throughout North America.

67. The CCTA agreed with the Commission's preliminary view that no second-level testing would be required for modems previously found to be compatible with the cable carrier's network or modems that were the same make and model as those that the cable carrier used for its own customers. The CCTA submitted that a cable modem would have to be the same hardware version and operate with the same software to be considered the same.

68. The CCTA noted that second-level testing of modems used over a proprietary platform would have been conducted when the product was first introduced on the cable carrier's network. The CCTA noted that proprietary modems would therefore not require subsequent second-level testing because they were manufactured by a single company that owned the intellectual property rights of the design. The CCTA emphasized that only modems identical in make and model to those used by the cable carrier for its own customers would be accepted without second-level testing.

69. The CBTPA submitted that the cable carriers must not interpret second-level testing as incorporating a pre-screening step with overly excessive requirements. The CBTPA further submitted that if a cable modem was demonstrated to work on some other network, that should be sufficient to justify that no pre-screening test was necessary. The CBTPA stated that cable operators must restrict the nature of the second-level tests to those which could clearly result in network harm. The CBTPA argued that cable operators must be held accountable for rejecting a modem, providing reasonable justification that a modem failure could result in actual network harm. The CBTPA submitted that cable operators must not include the cable modem to computer interface in their tests as such interface clearly posed no risk to the network. The CBTPA further submitted that second-level testing should be limited to those tests strictly necessary to enforce the 10 requirements listed by the CCTA in HSCO033.

70. In response to the CBTPA's suggestion that the cable carriers should provide reasonable justification that a modem's failure could result in actual network harm, the CCTA replied that HSCO033 and the second-level test guidelines dealt specifically with the justification.

71. TCI submitted that the testing procedure being examined by the Commission in this proceeding needed to be transparent and readily understood in order to avoid undue delay in cable modem testing. TCI further submitted that, in order to ensure transparency and competitive equity, disclosure requirements established by the Commission in Notification of Network Changes, Terminal-to-Network Interface Disclosure Requirements and Procedures for the Negotiation and Filing of Service Arrangements, Telecom Letter Decision CRTC 94-11, 4 November 1994 (Letter Decision 94-11), should be extended to the cable carriers as well, with respect to cable modem standards and any other terminal or network changes that might affect the ability of competitors to access the underlying facilities of the cable carriers.

Commission analysis and determination

72. The Commission notes that, contrary to the Commission's preliminary view, the CCTA considered it neither practical nor reasonable to employ a single national set of guidelines for second-level testing. The CCTA referred to the differences between the cable carriers' network architecture, back office systems, and numerous permutations of hardware and/or software versions.

73. The Commission notes that other parties to the proceeding did not address the CCTA's position regarding the unsuitability of employing national guidelines for second-level testing. The Commission acknowledges that the parameters and operating environments of individual cable carriers can differ significantly.

74. The Commission notes that RCI and Cogeco both disclosed their current company-specific DOCSIS modem test plans for consideration. The Commission also notes that Vidéotron filed the outline of the second-level test plan used for its own modems.

75. The Commission notes TCI's submission that the testing procedures must be transparent and readily understood in order to avoid undue delay in modem testing. In regards to TCI's proposal that disclosure requirements and notification procedures should be extended to the cable carriers, the Commission considers this request, such as it relates to cable modem standards and testing, to be reasonable.

76. The Commission considers that allowing company-specific test plans, using the 10 requirements of HSCO033 as the only allowable reasons for failure, would permit the evolution of test plans as technology progresses and experience grows in cable modem operation. The Commission notes, however, that such an approach would not eliminate the need for the Commission to occasionally adjudicate disputes involving the interpretation of the 10 requirements of HSCO033, vis-ŕ-vis specific tests. The Commission further considers that a cable carrier's second-level test plans, used for ISPs' modems, should not be more demanding that those which the cable carrier uses for testing its own modems.

77. Accordingly, the Commission confirms its preliminary views that:

  1. no second-level testing is required for a cable modem previously found to be compatible with the cable carrier's network or that is the same model as that used by the cable carrier for its customers; and
  2. modems submitted to a cable carrier for second-level testing must be DOCSIS-certified.

78. Further, the Commission determines that company-specific second-level test plans will be permitted and that:

  1. the cable carriers shall publish summary specifications, which detail specific test plans, as well as which version of DOCSIS, which specific design parameters and which modem information variables are utilized in their networks. With respect to these specifications, the cable carriers must comply with the notification procedures for changes as established by the Commission in Letter Decision 94-11;
  2. company-specific second-level test plans for third-party modems cannot be more demanding than those which a cable carrier uses for testing its own modems; and
  3. a modem can only fail second-level testing based on the 10 requirements of HSCO033.
Timing of test process
Position of parties

79. CAIP submitted that second-level testing should be completed in an efficient manner to avoid unnecessary delays in the rollout of competitive services and suggested that testing should be completed in 28 days, as proposed by the Commission in its preliminary view.

80. The CCTA stated that its members did not consider 28 calendar days to be sufficient to conduct the number of tests required to verify compatibility. The CCTA submitted that, as detailed in RCI's, Cogeco's and Vidéotron's test plans and guidelines, 60 days were required to take into account laboratory and engineering resources scheduling, as well as consultations with the cable modem vendors to review test results, analyse problems and complete written reports.

81. The CCTA submitted that Canadian cable carriers proposed to schedule second-level testing in waves similar to CableLabs' schedule for its certification and qualification testing. The CCTA submitted that the cable carriers suggested scheduling two to three waves per year, depending on demand from ISPs, with each wave lasting approximately 60 days and with no more than five different modem models processed through the second-level tests at one time. The CCTA also submitted that the cable carriers may accept a greater number of modems for testing, if they have the facilities available. The CCTA also stated that ISPs would be able to request second-level testing of modems up to two weeks prior to the announced wave start date.

82. The CBTPA submitted that the Commission would need to create competitive safeguards to prevent the cable carriers from introducing new modems if there were any pending second-level testing for a modem submitted by an ISP.

83. In reply, the CCTA submitted that a 60-day timeline took into account the likelihood that the cable carriers would need to interface frequently with manufacturers through the third-party ISP. The CCTA submitted that if the Commission imposed a 28-day timeline, cable carriers could not provide a commitment to make all reasonable efforts to resolve issues discovered during the second-level testing process.

84. The CBTPA replied that it believed that the cable carriers could perform the tests within 28 days. The CBTPA stated that if the tests took more than 28 days, the capability for anti-competitive behaviour by the cable carriers would be strengthened.

Commission analysis and determination

85. The Commission notes that both CAIP and the CBTPA supported a 28-day testing period.

86. The Commission considers that the CCTA did not put forth persuasive evidence for why testing should be done in waves or take 60 days. While the CCTA referenced several timing factors, such as laboratory and engineering resource scheduling, vendor consultation, problem analysis and report writing, the CCTA did not provide sufficient support for the proposed timeframes.

87. It appears to the Commission that the CCTA's proposal for a 60-day testing period was largely based on the DOCSIS certification process. The Commission considers that because only DOCSIS-certified modems will be tested, a 60-day time period is not necessary. Furthermore, the Commission considers that since second-level test plans will be public, modem vendors will have sufficient opportunity to ensure in advance that a modem will likely pass the cable carrier's tests.

88. Moreover, the Commission is concerned that cable carriers could leverage second-level testing in an anti-competitive manner if test periods were excessively long.

89. Accordingly, the Commission confirms its preliminary view that second-level testing must be completed within 28 calendar days. The 28-day timeline will begin the date that the cable carrier receives the request for testing.

Modem failure
Position of parties

90. The CCTA and its members did not fully agree with the Commission's preliminary view that when a particular modem failed the second-level testing, the cable carriers would have to provide a detailed explanation of the tests results. In this regard, the CCTA stated that it did not anticipate that it would be expected, for example, to troubleshoot the internal workings of the cable modem or that it should be required to analyse thousands of lines of code that comprise the software of the modem. That level of analysis, the CCTA submitted, should be conducted by the modem manufacturer in conjunction with the ISP seeking to purchase or use those modems. The CCTA stated that the cable carriers would make all reasonable efforts to inform the ISP of issues / problems as they arose during the testing process to allow ISPs, cable modem manufacturers and the cable carriers to resolve issues during the testing period.

91. CAIP submitted that it did not oppose, in principle, the CCTA's proposal that the cable carriers be required to provide only test results and not detailed analysis of problems. CAIP further submitted that the cable carriers should have to provide clear and supportable reasons for rejecting any modem submitted to them for testing. This, according to CAIP, would ensure that rejection was justified and not simply a tactic to discourage ISPs from pursuing TPIA.

Commission analysis and determination

92. The Commission notes that the CCTA and CAIP agreed that the cable carriers should not be required to provide detailed analysis of problems.

93. The Commission considers that the cable carriers should provide clear and supportable reasons for rejecting a modem. However, the Commission considers that the cable carriers should not be required to provide an analysis of the problems encountered.

94. Accordingly, the Commission determines that the cable carriers are not required to troubleshoot modem problems, but that the cable carriers must provide clear and supportable reasons for rejecting a modem, within the specified timeframe.

Cost recovery
Position of parties

95. The CCTA strongly opposed the Commission's preliminary view that the cable carriers should not charge ISPs for conducting second-level testing on the ISPs' proposed cable modems. The CCTA submitted that competitive equity and cost causality principles dictated that third-party ISPs should compensate the cable carriers for costs associated with conducting second-level testing on cable modems on their behalf. The CCTA submitted that denying the cable carriers the opportunity to recover costs caused by a competitor, and thus requiring the cable carriers to recover these costs from their own subscribers, was competitively inequitable and would place the cable carriers at a competitive disadvantage. The CCTA further submitted that, without charging third-party ISPs for second-level testing, there would be no economic incentive for the ISPs to limit the amount of requests for second-level testing.

96. The CCTA submitted that charging for testing should follow the same approach taken by the incumbent local exchange carriers (ILECs) for testing competitive local exchange carriers' (CLECs) fibre terminating equipment in the local exchange market. The CCTA submitted that when a CLEC proposes to connect fibre terminating equipment to a shared interconnecting facility between the CLEC and ILEC in the local exchange market using equipment that the ILEC has not deployed in its network, the ILEC submits the CLEC equipment to a series of compatibility tests. The ILEC bills the CLEC for the time and resources associated with the tests.

97. The CBTPA submitted that if the cable carriers were allowed to charge for second-level testing, the amount of second-level testing would have to be limited to enforcing the requirements specified in HSCO033. The CBTPA stated that only the large ISPs would be able to defray the large costs that can be involved in second-level testing and suggested that fees for second-level testing should be assessed by adding a fee to the monthly TPIA rates. The CBTPA further submitted that if the Commission agreed with the CCTA that charges for second-level testing should be assessed, then rates for such charges should be the subject of a proper tariff application. According to the CBTPA, the absence of a general tariff for second-level charges would provide an opportunity for undue self-preference and discrimination towards smaller independent ISPs. The CBTPA also submitted that unreasonable second-level testing charges would provide a disincentive for ISP innovation.

98. CAIP submitted that it did not oppose, in principle, reasonable cost-recovery; however, CAIP expressed concern that, absent strict regulatory oversight of such costs, the cable carriers would use this opportunity in an anti-competitive manner. CAIP further submitted that if the Commission permitted cost-recovery for second-level testing, it would have to ensure that the cable carriers did not inflate such costs and thereby further discourage ISPs from pursuing TPIA. CAIP also stated that ISPs would have to be aware of the costs upfront, so that they were not unfairly surprised after the testing had taken place.

99. The CBTPA submitted that charging for second-level testing through the monthly TPIA rate would allow smaller ISPs to submit modems without needing the economies of scale of large service providers. According to the CBTPA, the public would benefit from such innovative practices and the rates, terms and conditions of the TPIA service would act as a deterrent for non-serious market entrants.

Commission analysis and determination

100. The Commission notes that, with respect to cost recovery for second-level testing, all parties expressed concern regarding competitive equity. The Commission considers it necessary to provide incentives for the cable carriers to minimize the cost of second-level testing, as well as incentives to prevent second-level testing from becoming an impediment to competition. The Commission also considers it necessary to provide incentives for ISPs to keep the number of requests for second-level testing within reasonable limits. Accordingly, the Commission considers it appropriate to depart from its preliminary position regarding cost recovery.

101. At this time, the Commission does not consider it appropriate to include second-level testing charges as part of the end-user TPIA rate. The Commission considers that such an approach would not create an incentive for ISPs to limit the number of modems submitted for testing.

102. The Commission considers that requiring each cable carrier to allow each ISP one free modem model testing per 12-month period would provide an incentive for the cable carriers to reduce the cost of second-level testing over time. The Commission further considers that it may be necessary to adjust the amount of free modem testing, as the industry gains experience with TPIA.

103. The Commission considers that not allowing cable carriers to charge the ISPs for a certain number of second-level test failures would discourage the cable carriers from using the second-level testing process in an anti-competitive manner. Allowing a number of free failures would provide a further incentive for the cable carriers to reduce the cost of second-level testing over time. In the Commission's view, defects resulting in second-level testing failure should be rare because all modems submitted for testing would be DOCSIS-certified. The Commission considers that it may be necessary to adjust the number of free testing failures allowed, as the industry gains experience with TPIA.

104. To provide an incentive to ISPs to keep the number of requests for second-level testing within reasonable limits, the Commission considers it appropriate to limit the number of free second-level test failures. The Commission considers that the competitive concerns of cable carriers and ISPs would best be balanced if each cable modem model submitted for testing were allowed two free failures.

105. Pursuant to this approach, each ISP would be allowed one free second-level testing per 12-month period and two free failures per modem model submitted for testing. For example, the first modem submitted for testing in a 12-month period could fail second-level testing three times before the cable carriers would be permitted to charge the ISP a fee for the testing: this allows for the two free failures, and the third failure would count as the free test.

106. The Commission further considers that cable carriers should file tariffs for second-level testing.

107. Accordingly, the Commission directs the cable carriers to file proposed tariffs for second-level testing, along with appropriate cost justification in support of their proposed rates, for Commission approval, within 30 days of this decision. The tariff must specify that:

  1. the fee does not apply to one modem model submitted by an ISP for second-level testing, per 12-month period;
  2. the fee does not apply to second-level testing of a modem model where the modem model fails second-level testing, to a maximum of two failures; and
  3. modem testing failures, referenced in 100 (ii), shall not be considered the one free second-level testing, referenced in 100 (i), unless that modem model has already failed second-level testing twice.

Secretary General

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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