ARCHIVED - Telecom - Commission Letter - 8638-C12-67/02 - Decision 2002-34 – Process for review of Access Tandem Service Rates – Disclosure of Confidential Information

Letter

File No: 8638.C12.67

Ottawa, 20 December 2004

BY FAX/E-MAIL

To: Interested Parties to Decision 2002-34

Re:  Decision 2002-34 - Process for review of Access Tandem Service Rates - Disclosure of Confidential Information                                                             

Pursuant to the procedure set out in the Commission staff's letter dated 16 December 2002 regarding the review of the Access Tandem (AT) service rates, on 27 January 2003, Call-Net Enterprises Inc. (Call-Net) on behalf of itself and MTS Allstream (formerly AT&T Canada Telecom Service company), (collectively, the Competitors) requested further responses and disclosure of information filed under claim of confidence.   Responses to these requests were received from Aliant Telecom Inc. (Aliant), Bell Canada, MTS Communications Inc. (MTS), Saskatchewan Telecommunications (SaskTel), (collectively, the Companies), and TELUS Communications Inc. (TELUS) on 7 February 2003.

This letter reflects the Commission's objective that all parties have the benefit of the maximum amount of information placed on the public record, in order to facilitate a more efficient and effective proceeding.

Part 1:   Requests for Public Disclosure

Overall arguments in support of further disclosure

The Competitors submitted that there were a number of factors affecting the balancing of the public interest in disclosure against the specific direct harm to result from these disclosures in this proceeding.

First, the costing information for the AT service as assessed by the Commission and interveners would directly determine the AT cost-based rates.   Secondly, the AT service represented a high proportion of entrants expenditures, and the results of this proceeding would have a significant impact on entrants and on the progress of competition.   Furthermore, the competitors submitted that intervener involvement in respect of certain past proceedings leading to Final Rates for Unbundled   Network Components , 30 November 1998, Decision 98-22, and Restructured bands, revised loop rates and related issues, Decision 2001-38, 27 April 2001 etc. was of assistance to the Commission in generating a record adequate for decision-making and in providing informed assessment of incumbent local exchange carrier (ILEC) costing methods and results.

The Competitors also submitted that the numerous changes or updates to the costing methods associated with unbundled loop and primary exchange services proposed in the proceeding initiated by CRTC to review revised loop and primary exchange service cost filings, 30 November 2001 , (PN 2001-119 ) highlighted the critical importance for all parties of fully understanding and assessing the associated assumptions, parameters methods, data sources and network models.   In addition, the competitors submitted that the ILECs made two sets of significant revisions to the AT costs studies since the original study filings of 17 July 2002 .   The Competitors argued that the magnitude of the changes and the explanations provided by the ILECs did not inspire confidence in the ILECs practices and internal cost review procedures.   The Competitors argued that, as a result, the role of interveners in testing and closely scrutinizing ILEC cost estimates was more important than ever.

Overall arguments opposing further disclosure

The Companies submitted that the Competitors' comparison of the AT service to unbundled loops in near-essential bands was a false and misguided comparison that attempted to justify an unusual expansive level of disclosure.   In addition, the Companies noted that the Competitors gave the impression that the Commission had uniformly applied an expansive requirement for disclosure in the case of cost studies involving unbundled loops when it had not.   The Companies further noted that in its disclosure ruling in, PN 2001-119, the Commission noted:   ''.the treatment of confidentiality requests should not be taken as an indication of the manner in which such matters would be dealt within the future, in different circumstances.''   Consequently, the level of disclosure provided for in that proceeding should not be treated as a model for the AT service proceeding.   The Companies noted that the resources used to provide the AT service were also used to provide the ILECs' own long distance service and competitive services.   Hence, they argued that any release of information related to the AT service should be balanced against the direct harm that would be caused to the ILECs in the very competitive market for long distance and other competitive services.

TELUS submitted that the pricing rule established by the Commission of Phase II costs plus the mandated 15% mark-up, applied generally to all Category I Competitor services and, therefore, the Commission should not consider the Phase II costs for the AT service differently than the Phase II costs for any other Category I Competitor service.   TELUS argued that what the entrants spend on AT and DC services should be greater than what they spend on unbundled loops since the long distance market was intensely competitive and had been so for some time with numerous alternative providers of long distance service obtaining AT and DC service from the ILECs.   TELUS further noted that the Competitors' ground for disclosure was supported with the assertion that there had been no examination of AT costs by the Commission since the proceeding leading to Decision 97-6.   TELUS argued that the Competitors had not been prevented in the past, and would not be prevented on a going forward basis, from availing themselves of the opportunity to review the AT costs.   TELUS submitted that the competitor's assertion that intervener involvement was of crucial assistance to the Commission in generating a record adequate for decision-making and in providing informed assessment of the ILEC costing methods and results is a reasonable general statement.   However, TELUS noted that the Telecommunication Act and the CRTC Telecommunications Rules of Procedure (the Rules) contemplated that information could be filed in confidence and that the test for making such information public did not operate against the parties' rights that they had under the Rules.

Factors in the assessment of requests for public disclosure

Requests for disclosure of information for which confidentiality has been claimed are assessed in light of section 38 and 39 of the Rules.   In the case of each request, the specific direct harm, if any, likely to result from disclosure is weighed against the public interest in disclosure.   In doing so, a number of factors are taken into account, including the following.

The degree of competition that exists in a particular market is an important consideration in assessing requests for disclosure.   All things being equal, the greater the degree of competition in a particular market, the greater the specific harm that could be expected to result from disclosure.

Another factor is assessing the extent of harm in the expected usefulness of the information at issue to parties in furthering their competitive position.   In this regard, an important consideration is the degree to which the information at issue is disaggregated.   Generally speaking, the more aggregated the information, the less the likelihood that harm will flow from its disclosure.

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

Conclusion

The information sought pursuant to the requests for disclosure by the Competitors is relevant to the issue of determining the appropriate level of the AT service rate.   The rate for the AT service is to be set equal to Phase II costs plus the mandated 15% mark-up including adjustments for an annual productivity offset.   Therefore, the ILEC costing information, as assessed by the Commission and interested parties, will directly determine the level of the AT service rates.   The AT service is a critically important Category I Competitor service as demonstrated on the record of Price cap regulation and related issues, PN 2001-37, 13 March 2000, having a significant impact on entrants, and thus, on the progress of competition.   Furthermore, the ILECs' cost proposals in this proceeding include two set of significant revisions that need to be thoroughly reviewed by the Commission and interested parties.

The disclosure of the information to be provided pursuant to this letter will afford parties a meaningful opportunity to examine the ILECs' proposals in this proceeding and will ensure that a full and complete record is produced.

Having regard to the above, the Companies and TELUS are to file on the public record of this proceeding by 18 January 2005, the information as set out in Attachment 1 for which a claim of confidence had been made.   Unless otherwise indicated, these responses are to be placed on the public record.   In each case where full or partial disclosure is to occur, it is considered that the specific direct harm likely to be caused by disclosure would not outweigh the public interest in disclosure.   Requests for disclosure for all other responses for which confidentially has been claimed are denied.

Part II:   Request for Further Responses

Section 18 of the Rules deals with responses to interrogatories and the adequacy of those responses.   The Commission in past proceedings has looked at a number of different considerations.

A major consideration is the relevance of the information requested to the matter at issue.   The availability of the information requested is also a factor, which is balanced against the relevance of the information.   If the provision of the information sought would require an effort disproportionate to the probative value of the information itself, further responses will not be required.

Having regard to the above considerations, the Companies and TELUS, are to provide, by 15 January 2005 , further responses to interrogatories as set out in Attachment 2. Unless otherwise indicated, these responses are to be placed on the public record.   All other requests for further responses are denied.

Part III:   Revised Process

The remainder of the procedure established in the Commission's 16 December 2002 letter is hereby amended as follows:

(a) by extending to 15 March 2005 the deadline by which parties may file comments; and

(b) by extending to 29 March 2005 the deadline by which parties may file reply comments.   This schedule takes into account the additional time required to respond to the supplementary Commission interrogatories that will be issued 4 February 2005 , to which responses are due by 4 March 2005 .

All documents and information to be filed with the Commission pursuant to this letter must be served on all parties by the applicable filing date provided herein.   All documents must be received, and not merely sent, by the dates indicated.

Yours sincerely,

'Original signed by S. Hutton'

Scott Hutton
Director General
Competition, Costing and Tariffs

c.c.   Nat Natraj, Senior Analyst, CRTC (819) 953-5801

9. With reference to Attachment 2 to the response to interrogatory TELUS(CRTC)30Oct02-1, disclose all figures for life estimates and survivor curves.

Date modified: 2005-01-12