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ARCHIVED - Telecom Decision CRTC 2004-41

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Telecom Decision CRTC 2004-41

  Ottawa, 18 June 2004
 

Telecom Decision CRTC 2003-73, follow-up and show cause - Changes to co-location tariffs and central office license agreements

  Reference: 8740-T42-0485/02, 8740-T46-4170/02 and 8638-C12-200317934
  In this decision, the Commission changes the co-location tariffs and central office license agreements (COLAs) of all local exchange carriers (LECs) that offer co-location service. The Commission directs all LECs that offer co-location services, including TELUS Communications Inc. (TELUS), to issue within 30 days of the date of this decision, revised COLAs reflecting the Commission's preliminary views in TELUS Communications Inc. - Changes to co-location tariffs and central office license agreements, Telecom Decision CRTC 2003-73, 31 October 2003 (Decision 2003-73), and amendments proposed by TELUS. The Commission further directs all LECs that offer co-location services, other than TELUS, to issue within 30 days of the date of this decision, revised tariffs and COLAs to reflect the determinations made by the Commission in Decision 2003-73.

1.

In TELUS Communications Inc. - Changes to co-location tariffs and central office license agreements, Telecom Decision CRTC 2003-73, 31 October 2003 (Decision 2003-73), the Commission approved with modifications, Tariff Notices 485A and 4170A filed by TELUS Communications Inc. (TELUS) and TELUS Communications (B.C.) Inc. (TCBC), respectively. The Commission also made determinations on tariff items 255.4(13) for TELUS and 110 for TCBC, and central office license agreements (COLAs) sections 2.01, 2.03, 6.03.01, 2.03.01, 20.02, 2.03.02, 2.05, 20.03, 2.07, 22.07 and 4.01(b), applicable to both companies. The Commission also put forth preliminary views on COLA sections 2.06 and 2.03.03.

2.

In Decision 2003-73, the Commission directed TELUS to show cause, within 30 days of the date of the decision, on the appropriateness of implementing the preliminary views expressed by the Commission in that decision to its tariffs and COLAs. The Commission also directed all local exchange carriers (LECs) offering co-location services to show cause within 30 days of the date of the decision, on the appropriateness of implementing the determinations and preliminary views by the Commission in that decision to their tariffs and COLAs.

3.

By letter dated 1 December 2003, Aliant Telecom Inc., Bell Canada, MTS Communications Inc., NorthernTel Limited Partnership, Saskatchewan Telecommunications and Société en commandite Télébec (collectively, the Companies) filed comments on the Commission's determinations regarding new COLA sections 20.03 and 2.03.02, and the Commission's preliminary view for section 2.06.

4.

By letter dated 1 December 2003, TELUS commented on the Commission's determinations made regarding new COLA section 20.03 and preliminary views for sections 2.03.03 and 2.06.

5.

On 8 December 2003, Futureway Communications Inc., doing business as FCI Broadband, provided general comments stating that it did not object to the application of the determinations and preliminary views expressed by the Commission in Decision 2003-73.

6.

On 11 December 2003, Allstream Corp. (Allstream) commented on the Commission's determinations for new COLA section 20.03 in response to the comments filed by the Companies and TELUS. On 22 December 2003, both the Companies and TELUS submitted responses to Allstream's comments.
 

New COLA section 20.03

7.

In Decision 2003-73, the Commission directed TELUS to include new section 20.03 in its revised COLA. New section 20.03 allows for an interconnecting carrier (IC) to obtain incumbent LEC (ILEC) approval of equipment for installation.
 

Position of parties

8.

Both TELUS and the Companies objected to the inclusion of new section 20.03 in the COLA, stating that the new section was redundant and unnecessary. TELUS submitted that the terms of new section 20.03 were already captured in existing sections 2.02, 2.03 and 2.05 of the COLA. The Companies submitted that the process described in new section 20.03 was already captured in section 2.16 of Bell Canada's COLA, while the standards issues were captured in section 20 of Bell Canada's COLA.

9.

Allstream refuted the objections of TELUS and the Companies, stating that the existing sections of the ILECs' COLAs dealt with site-specific co-location applications, whereas item 3.0 of the CRTC Interconnection Steering Committee consensus report CLRE020C, corresponding to new section 20.03, related to the ILECs' equipment standards approval process. Allstream stated that a co-locator submitted vendor equipment specifications to an ILEC for review well in advance of designing and engineering a site-specific co-location application, to ensure that the equipment would meet the ILEC's co-location equipment standards. Allstream submitted that once the equipment was approved, the competitor could then develop a site-specific application.

10.

Allstream further submitted that the equipment standards approval process already existed outside of the co-location application process described in section 2 of the COLA. Allstream stated that new section 20.03 simply standardized a procedure already followed. Allstream further stated that if there was a perceived redundancy between any existing and proposed COLA sections, then the existing COLA sections could be modified to remove all reference to the equipment standards approval process. Allstream submitted that the submission of equipment standards at the same time as a site-specific application would unnecessarily delay this process as well as increase the risk that non-ILEC standard equipment would be included in an application.

11.

In their reply comments, the Companies stated that consensus report CLRE020C was not restricted to the equipment standards approval process and that it was incorrect to assert that the consensus report did not relate to modifications of an existing co-location arrangement. The Companies submitted that the requested change was unnecessary and would add to the administrative burden associated with the implementation of the COLA. The Companies argued that Allstream was merely seeking to make the COLA more difficult to interpret and implement, and that Allstream had failed to provide any compelling reasons why the Companies should include proposed new section 20.03 in their respective COLAs.

12.

In its reply comments, TELUS reiterated that the language in proposed section 20.03 was redundant to the provisions already set out in Article 2 of its co-location agreement, specifically in sections 2.03 and 2.05. TELUS proposed, however, to add additional language to COLA sections 2.03, 2.05, and 2.08 of Article 2 for the purpose of clarification, in order to address Allstream's concern about the ability to request equipment approval independent of any specific co-location arrangement well in advance of the preparation of a site-specific application.
 

Commission analysis and determination

13.

The Commission is of the view that Allstream, in proposing new COLA section 20.03, was attempting to separate the equipment standards approval process from the physical co-location (PCL) application process. The Commission is also of the view that Allstream was attempting to include in the COLA a process that allows ILEC approval of equipment far in advance of the equipment being co-located in the ILEC Central Office (CO).

14.

In Decision 2003-73, the Commission determined that new COLA section 20.03 should be added to TELUS's existing COLA to meet Call-Net Enterprises Inc.'s stated requirement, but it was done when the intent of the new subsection was not readily available. The Commission, given the information filed for the show cause process established by Decision 2003-73, is now of the opinion that new COLA section 20.03 does not sufficiently separate the standards approval process from a site-specific application for PCL.

15.

The Commission considers that the amendments proposed by TELUS clearly separate the application process for approval of equipment to be installed prior to the preparation of a site-specific application from the application process to install or modify equipment in a PCL arrangement that has already received ILEC approval.

16.

The Commission finds that the amendments proposed by TELUS for COLA sections 2.03, 2.05 and 2.08 are appropriate, and the requirement imposed on TELUS in Decision 2003-73, to add new COLA section 20.03, is no longer needed. Accordingly, the Commission directs all LECs that offer co-location services, including TELUS, to issue revised COLA sections within 30 days of the date of this decision, incorporating the changes proposed by TELUS for COLA sections 2.03, 2.05 and 2.08.
 

COLA section 2.03.03

17.

Section 2.03.03 of the COLA pertains to rejected applications for co-location. Prior to Decision 2003-73, a rejected application could only be amended and resubmitted if the originally proposed equipment plan was inappropriate. In Decision 2003-73, the Commission was of the preliminary view that a co-locator's ability to amend and resubmit an existing application, rather than filing a new application, should be extended to situations where the grounding plan and/or equipment and cabling limitations needed to be modified.
 

Position of parties

18.

TELUS considered that the view expressed by the Commission in Decision 2003-73 with regard to extending the IC's ability to amend and resubmit a rejected co-location application, to include situations where the grounding plan and/or equipment and cabling limitations needed to be modified, was reasonable. TELUS submitted, however, that there needed to be a finite period of time to resubmit a revision to a rejected co-location application. TELUS was of the opinion that if a timeline was not associated with the revision capability the IC could, in effect, be considered to have reserved a co-location space indefinitely, possibly to the disadvantage of other ICs requesting co-location space. TELUS proposed that where an IC did not indicate to TELUS within a certain timeframe that it intended to submit a revised application, and then proceeded to do so, the application should be deemed to be abandoned.

19.

TELUS proposed an amendment to section 2.03.03 of its COLA to allocate five business days to an IC to notify TELUS in writing of its intention to resubmit a rejected application to correct the identified deficiencies, and a further ten business days to resubmit the revised application. TELUS submitted that failure to contact TELUS within the allocated timeframes would result in the initial application being deemed to be abandoned by the IC.
 

Commission analysis and determination

20.

The Commission is of the view that a rejected application for co-location space that is not resubmitted in a timely fashion could act as a long-term reservation for that co-location space, which might otherwise be used by another IC. The Commission is of the view that this would disadvantage LECs offering co-location services and potential co-location customers.

21.

The Commission concludes that its preliminary view made in Decision 2003-73 with respect to COLA section 2.03.03 is appropriate. The Commission also concludes that the amendments to COLA section 2.03.03 proposed by TELUS are appropriate. Accordingly, the Commission directs all LECs that offer co-location services, including TELUS, to issue within 30 days of the date of this decision, revised COLA sections reflecting the Commission's preliminary view and the amendments proposed by TELUS for COLA section 2.03.03.
 

COLA section 2.06

22.

Section 2.06 of the COLA outlines the process relating to costs applicable to a cancelled PCL application. In Decision 2003-73, the Commission was of the view that TELUS should be required to consider the salvage value of any work undertaken as part of a cancelled PCL application. The Commission noted that such consideration would offer fair and equitable treatment to all of TELUS's customers. Accordingly, the Commission was of the preliminary view that reference to the appropriate tariff item where salvage value is treated, such as tariff item 110.5 in the case of TELUS, should be made in section 2.06 of the COLA.

23.

Section 2.06 of TELUS's COLA, prior to any revisions contemplated by Decision 2003-73, reads:
 

Notwithstanding section 16.02, in the event an IC cancels an application for PCL following the IC's acceptance of the Secondary Report identified in section 2.03, but prior to the PCL Availability Date, the IC shall be deemed to have abandoned the Application for PCL in question and the IC shall be required to pay to TELUS all costs incurred or committed to by TELUS as well as all costs associated with any restoration of the TELUS Premises, as the case may be.

24.

Item 110.5 of TELUS's Terms of Service in the General Tariff currently reads:
 

If the customer cancels the request for service or asks that the start of service be delayed after installation work has begun but before service has started, TELUS will charge the customer the lower of the following amounts:

 

a) the rate for the minimum contract period plus the rate to establish service; or

 

b) TELUS's estimated costs of installation minus estimated net salvage. The estimated costs of installation include:

 
  • the cost of unsalvaged equipment and materials specifically provided or used for the installation;
 
  • the cost of labour;
 
  • engineering costs;
 
  • supply expense;
 
  • supervision costs; and
 
  • any other expenses resulting from the installation and removal work.
 

Position of parties

25.

The Companies disagreed with the Commission's preliminary view that the salvage value of any work undertaken as part of a co-location application should be considered in circumstances where an IC cancels its co-location application after the installation work had begun. The Companies submitted that the Terms of Service (such as item 10, Article 20.2 in Bell Canada's General Tariff) would not correctly, or likely, adequately compensate the Companies for the costs incurred in the circumstances identified in section 2.17 of the COLA (in the case of Bell Canada).

26.

The Companies argued that when a PCL arrangement was terminated prior to the effective co-location date, the costs incurred by the Companies would be substantially lower than the full charge for the entire contract period. The Companies submitted that as a result, their ability to recover costs would be limited to installation costs less net salvage. The Companies further submitted that in the event of termination by the IC, the costs incurred by the Companies would likely be substantially greater than installation costs less net salvage. The Companies claimed that many of the costs incurred in relation to the establishment of co-location arrangements did not entail installation, and the recovery of such costs might be difficult under Article 20.2.

27.

The Companies submitted that the Commission's objective in contracts such as COLAs should be to duplicate, to the extent possible, the provisions of commercial contracts. The Companies indicated that the provisions of the COLA were drafted to reflect provisions in commercial contracts for comparable services. The Companies submitted that in such contracts it would be commonplace to find provisions which would enable a building owner to recover all the costs incurred in the event a tenant, at the outset of a lease, terminated the lease for all or a portion of the space leased. In the Companies' view, the recoverable costs should include restoration costs.

28.

TELUS submitted that, in circumstances where an IC cancels its co-location application after accepting the Secondary Report, the consideration of salvage value was reasonable, subject to certain qualifications. TELUS submitted that any fixed items that could be redeployed by TELUS within a specified time period, such as 12 months, should be subjected to a salvage value rebate process. TELUS submitted that the costs recovered for such items would be refunded to the departed IC or credited against any amounts owed to TELUS by that IC.

29.

TELUS submitted that it should not be obligated to retain fixed items in a particular co-location space on an "as is" basis for any period of time where there is a requirement to utilize the area in question in a different fashion or where it is necessary to restore the space to its previous state.

30.

TELUS submitted that it did not believe it was appropriate to reference tariff item 110.5 in section 2.06 of the COLA. TELUS submitted that co-location was a rather unique service because the provision of co-location space was a high-cost, high-risk service that all ILECs were mandated to offer. TELUS submitted that a major cost component in provisioning a co-location arrangement was sub-contracted work, where the charges to the IC were based on costs incurred without mark-up.

31.

TELUS stated that limiting its ability to recover costs to the significant degree provided for in tariff item 110.5 would impose a financial hardship on TELUS. TELUS added that it would enable any IC to cancel a co-location arrangement at a very late stage after significant costs had been incurred by TELUS, resulting in TELUS assuming all the associated financial risk. TELUS submitted that such action would amount to the ILEC financing an IC's changing business plans, which TELUS claimed would be patently unfair to TELUS in terms of financial risk and disruption. TELUS argued that such a result would be unduly discriminatory to the ILEC, particularly when the ILEC had been mandated to provide space for ICs in its CO buildings.
 

Commission analysis and determination

32.

The Commission notes that the Companies and TELUS have similar wording in the Terms of Service of their current General Tariff and COLA sections with respect to cancellations before service begins.

33.

The Commission notes that preparing CO space to make it suitable for PCL at the request of an IC could involve a number of varied functions. For example, preparation could include any or all of the following: installation of air conditioning and ventilation, security screening, cable runways, lighting, conduit and ducting, fibre cables between the first manhole and the CO, connecting links and terminal blocks; augmentation or installation of commercial and equipment-specific power; construction activity associated with the installation or modification of walls, doors, and apertures; review of planning and engineering documents; establishment of common language location identifier codes for the IC; training of ILEC staff; movement or relocation of existing ILEC staff; and the entry of administrative information into various databases.

34.

The Commission notes that tariff item 110.5 of the Terms of Service in the General Tariff contains a comprehensive list of factors that can be included when a service request is cancelled. The Commission is not convinced that an ILEC will be unfairly compensated if the terms of tariff item 110.5 of the Terms of Service in the General Tariff for TELUS or another ILEC-appropriate tariff item, are included in the COLA.

35.

The Commission is of the view that the work required by an ILEC to create co-location space is relatively unique as a telecommunications service, as it requires both installation and administrative work. However, the Commission is also of the view that all customers of an ILEC should benefit from any salvage opportunity afforded by a cancelled request for any service, including a co-location request.

36.

The Commission notes that TELUS proposed a 12-month salvage time limit in section 2.06 in order to determine whether any items installed prior to a cancelled co-location request could be redeployed. The Commission is of the view that an ILEC should not be required to retain a fixed item for an indefinite period of time, simply because it can be salvaged. Accordingly, the Commission considers that the reference to tariff item 110.5 of the Terms of Service in the General Tariff should be made in COLA section 2.06, but it should include a time limit so that an item would be considered salvageable if it could be reused within one year.

37.

The Commission finds that its preliminary view made in Decision 2003-73 with respect to COLA section 2.06 is appropriate where, in the event of a cancelled request for PCL, a LEC offering co-location services should be required to rebate the salvage value of any work undertaken as part of the request. In addition, the Commission finds that an item should be considered salvageable if redeployment or re-use of the item installed as part of the co-location request can be made within 12 months of the cancellation.

38.

Accordingly, the Commission directs all LECs that offer co-location services, including TELUS, to issue within 30 days of the date of this decision, revised COLAs to include their appropriate tariff item that deals with salvage within their appropriate COLA section, and to reflect the 12-month timeframe within which salvage value rebates will be considered.
 

Other matters

 

Section 2.03.02

39.

Section 2.03.02 of the COLA deals with matters related to a missed PCL availability date. In Decision 2003-73, the Commission found that the issue of missed co-location availability dates should be addressed in Finalization of the Quality of Service rate adjustment plan for competitors, Telecom Public Notice CRTC 2003-9, 30 October 2003 (Public Notice 2003-9), dealing with competitive quality of service indicators.

40.

The Commission notes that while the Companies commented on COLA section 2.03.02, any new quality of service indicators will be determined as a result of Public Notice 2003-9. Accordingly, the Commission will not take any further action at this time with respect to section 2.03.02.
 

Commission's show cause determination

41.

The Commission notes that, in addition to the COLA sections discussed in detail above, in Decision 2003-73, parties offering co-location services were directed to show cause why a number of other determinations and preliminary views expressed by the Commission in that decision should not also apply to them. Those determinations, which are not previously discussed in this decision, applied to tariff items 255.4(13) of TELUS and 110 for TCBC and COLA sections 2.01, 2.03, 6.03.01, 2.03.01, 2.03.02, 20.02, 2.05, 2.07, 22.07 and 4.01(b). The Commission notes that comments were not filed by any parties offering co-location services with respect to those other determinations.

42.

Accordingly, for the reasons stated by the Commission in Decision 2003-73 with respect to the above tariff items and COLA sections, the Commission directs all LECs, other than TELUS, that offer co-location services, to issue within 30 days of the date of this decision, revised tariffs and COLAs to reflect the determinations made by the Commission in Decision 2003-73.
  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

Date Modified: 2004-06-18

Date modified: