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ARCHIVED - Telecom Order CRTC 2004-294

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Telecom Order CRTC 2004-294

  Ottawa, 30 August 2004
 

TELUS Communications Inc. - Introduction of a non-mandated co-location service in Alberta and British Columbia

  Reference: Tariff Notices 85, 85A and 85B
  In this order, the Commission approves TELUS Communications Inc.'s (TCI's) proposal to introduce General Tariff item 405, Business Co-location service in Alberta and British Columbia and the proposed standard form Non-mandated Co-location Agreement with the changes specified in the order.
  The Commission directs TCI to migrate to the General Tariff, the customers of non-tariffed co-location arrangements upon approval of the General Tariff, effective the date of this order, and the customers of special facilities tariff (SFT) items 301, 306, 307, 308, 309, 310 and 311 within 90 days of the date of this order. The Commission approves the withdrawal of expired SFT items 303, 304, 305, 312, 313 and 314, effective on the date of this order.

1.

The Commission received an application by TELUS Communications Inc. (TCI), dated 24 February 2003 and amended on 2 February and 25 June 2004, to introduce General Tariff item 405, Business Co-location Service.

2.

TCI noted that it currently provides non-mandated co-location arrangements in Alberta and British Columbia (B.C.) as customer-specific special facilities tariffs (SFTs) and also, in some cases, in the absence of an approved SFT.

3.

In its application, TCI also proposed to:
 
  • introduce a single integrated rate structure for non-mandated co-location arrangements that would apply in Alberta and B.C.;
 
  • introduce a standard form non-mandated co-location agreement;
 
  • migrate all non-tariffed non-mandated co-location customers to the General Tariff for Business Co-location Service upon approval, migrate existing customers with SFTs upon expiry of their initial term, and withdraw existing SFT items that have expired; and
 
  • assign the proposed tariff item to the Other Capped services category.

4.

The Commission did not receive any comments on this application.
 

TCI's application

 

Rates for Business Co-location Service

5.

TCI submitted that the proposed rates and charges reflected the retail nature of the proposed Business Co-location Service, as distinct from the mandated co-location services, which were classified as Category I Competitor Services in Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002 (Decision 2002-34).

6.

Specifically, TCI proposed to include the following service elements at the rates set out below:
 
  • $25.00 per square metre per month for floor space within the central office;
 
  • $15.00 for 48 Volt DC, $10.50 for 120 Volt AC, and $12.00 for 120 Volt AC (generator back-up), per fused ampere;
 
  • $32.50 during regular hours and $45.00 per hour during overtime hours, per 15 minutes or fraction thereof, for engineering labour;
 
  • the existing tariff rates for non-engineering labour in former TCI General Tariff item 1820 and TELUS Communications (B.C.) Inc. General Tariff item 111, invoiced costs without any mark-up for third-party labour, and labour charges for a TCI-provided escort for the customer's employees, contractors, or agents in accordance with Tariff item 405.2.10; and
 
  • a pre-engineering fee of $1,200.00 and a service order charge of $145.00.

7.

TCI also proposed to delete the words "Business Rates" from former TCI General Tariff item 1820, noting that these words had been included inadvertently.

8.

TCI argued that as the proposed floor space monthly rate of $25.00 per square metre was above the MTS Communications Inc. (now known as MTS Allstream Inc.) benchmark rate of $16.20 used by the Commission in determining floor space rates for the other incumbent local exchange carriers (ILECs) in Decision 2002-34, no imputation test was required. TCI also argued that as each of the proposed power monthly rates were higher than the existing approved rates for mandated co-location, no imputation test was required. Further, TCI argued that as the proposed pre-engineering fee and the proposed service charge were each based on the higher of the existing approved rates for mandated co-location in Alberta and B.C., an imputation test was not required. The company, however, filed an imputation test in support of its proposed engineering labour rates.
 

Non-mandated Co-location agreement

9.

TCI also filed a proposed standard-form Non-mandated Co-location Agreement (COLA) setting out the terms and conditions for the service provided under item 405. TCI indicated that the COLA was an amended and updated form co-location agreement based on the customer-specific non-mandated Special Assembly Central Office License Agreement filed under TCI Tariff Notice 66 and approved in Telecom Order CRTC 2002-461, effective 1 January 2003. In the second amendment to its application, TCI proposed to amend the agreement title and the service reference names from "Non-mandated Co-location" to "Business Co-location" upon Commission approval of its application.
 

Issues related to customer migration

10.

TCI proposed to migrate existing non-mandated co-location customers provided with non-mandated co-location service without a contract to the proposed General Tariff item 405 upon its approval, and to migrate existing SFT customers to proposed item 405 upon expiry of their current contracts.

11.

TCI also proposed to withdraw expired SFT items 303, 304, 305, 312 and 313.
 

Basket classification

12.

TCI proposed that, pursuant to Decision 2002-34, item 405, Business Co-location, be assigned to the Other Capped services category under the company's price cap classification.
 

Commission analysis and determination

 

Rates for Business Co-location Service

13.

In Co-location, Telecom Decision CRTC 97-15, 16 June 1997, the Commission approved general tariff rates for mandated co-location services. In Telecom Orders CRTC 98-121 and 98-124, both dated 9 February 1998, and in Telecom Order CRTC 98-167, dated 16 February 1998 (collectively, Orders 98-121 et al.), the Commission concluded that for floor space and power SFTs, where such arrangements made use of floor space or electrical power services of a central office, charges were to be equal to the co-location general tariff rates for these services. The Commission determined that where floor space and power SFTs were provided to one customer, it would generally require that other customers be provided access to similar arrangements under similar terms.

14.

The Commission notes that since Orders 98-121 et al. were issued, it approved in Decision 2002-34, different rates for digital network access service depending on whether it is provided to competitors or to retail customers. Consequently, the Commission considers that it would be appropriate to consider TCI's proposal to charge higher rates for Business Co-location Service than for mandated co-location service. Moreover, the provision of non-mandated co-location under a general tariff would alleviate concerns expressed in Orders 98-121 et al. that different rates for the same service could be offered under SFTs.

15.

In the Commission's view, the proposed non-mandated co-location rates for floor space and power are compensatory, since each exceed the rates for the same service set out in TCI's mandated co-location tariff. The Commission considers that the service charge and pre-engineering fee are also compensatory since they are equal to the higher charge for the same tasks set out in TCI's mandated co-location tariff.

16.

The Commission finds that the imputation test demonstrates that the proposed rates for engineering labour exceed the associated costs. The Commission considers acceptable TCI's proposal to rate third party labour at invoice costs without any mark-up.

17.

Accordingly, the Commission approves the proposed tariff for Business Co-location Service, including the rates for floor space, power, labour, service orders and pre-engineering. The revisions take effect as of the date of this order.
 

Non-mandated Co-location agreement

18.

In Telecom Decision CRTC 2003-73, follow-up and show cause - Changes to co-location tariffs and central office license agreements, Telecom Decision CRTC 2004-41, 18 June 2004, the Commission found 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 a cancelled request for physical co-location. In that decision, the Commission directed TCI, among other things, to modify its co-location tariff and central office license agreement to include in the appropriate tariff item a statement that it will consider the salvage value of any work undertaken, when a customer cancels its request for co-location within 12 months and cancellation charges are incurred.

19.

The Commission considers that the modification to the mandated co-location agreement should also apply to the COLA. Accordingly, the Commission approves the proposed COLA, with the changes listed below:
 
  • include at section 2.05 of its COLA a statement that it will consider the salvage value of any work undertaken, when a customer cancels its request for co-location and cancellation charges are incurred, reflecting the 12-month timeframe within which salvage value rebates will be considered; and
 
  • amend the title and service reference names to reflect "Business Co-location Service" instead of "Non-mandated Co-Location Service".

20.

TCI is directed to provide the Commission for information purposes, within 30 days of the date of this order, a revised COLA reflecting the above directives.
 

Issues related to customer migration

21.

The Commission considers that TCI's proposal to withdraw expired SFTs is reasonable.

22.

The Commission notes that TCI provides a number of customers with non-mandated co-location service in the absence of approved SFT. The Commission considers that TCI's proposal to immediately migrate these customers to the General Tariff for Business Co-location Service, upon approval, is also reasonable.

23.

The Commission notes that TCI's proposal regarding customers with existing SFTs for non-mandated co-location relates to SFT items 301, 306, 307, 308, 309, 310, 311 and 314. The Commission notes that SFT item 314 expired on 29 January 2004 and that under TCI's proposal, this customer would be immediately migrated to the General Tariff for Business Co-location Service upon its approval. The Commission finds that, under TCI's proposal, the remaining customers with existing SFTs would benefit from lower rates than the General Tariff for Business Co-location Service would provide to other retail customers, and that this situation would persist over a number of years. In the Commission's view, TCI's proposal is unjustly discriminatory.

24.

The Commission notes that in Tariff filings related to the installation of optical fibres, Telecom Decision CRTC 97-7, 23 April 1997 (Decision 97-7), the Commission determined that all optical fibre customers that were provided service in areas for which general tariffs would be applicable were to be migrated to the General Tariff by 1 January 1998. In Decision 97-7, the Commission noted that the use of general tariffs would eliminate concerns regarding unjust discrimination in the pricing and availability of optical fibre.

25.

Accordingly, the Commission is of the view that all customers of non-mandated co-location arrangements, including existing SFT customers of non-mandated co-location services, should be migrated to the General Tariff for non-mandated co-location. However, the Commission considers that TCI should give 60 days notice to the remaining SFT customers.

26.

The Commission approves the withdrawal of SFT items 303, 304, 305, 312, 313, and 314.

27.

The Commission directs TCI to:
 
  • migrate retail customers without an approved SFT for non-mandated co-location arrangements upon approval of the General Tariff for Business Co-location service, effective on the date of this order; and
 
  • migrate to the General Tariff for Business Co-location Service customers of SFT items 301, 306, 307, 308, 309, 310 and 311, within 90 days of the date of this order.
 

Basket classification

28.

The Commission considers that the ILECs retain market power with respect to co-location services in their central offices and therefore the proposed service should be capped. The Commission notes that the proposed Business Co-location Service is a retail service that does not meet the definitions for residential or business services as set out in Decision 2002-34. Therefore, the Commission is of the view that TCI's proposal to classify Business Co-location Service to the other capped services basket is appropriate.

29.

Accordingly, the Commission approves the proposed classification of TCI's Business Co-location Service to the other capped services basket.
  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: 2004-08-30

Date modified: