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ARCHIVED - Telecom Order CRTC 2004-330

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Telecom Order CRTC 2004-330

  Ottawa, 30 September 2004
 

Northwestel Inc.

  Reference: Tariff Notices 783, 783A and 783B
 

Interconnection services for wireless service providers

1.

The Commission received an application by Northwestel Inc. (Northwestel), dated 31 January 2003 and amended on 18 March 2003 and 19 February 2004, to revise General Tariff item 1311, Wireless Service Provider - Network Access, in order to introduce CCS7 signalling interconnection service.

2.

Northwestel stated that the proposed service will provide wireless service providers (WSPs) using trunk-side interconnection with the ability to interconnect their own common channel signalling # 7 (CCS7) network with Northwestel's CCS7 network in order to exchange the signalling information necessary to support the completion of calls between the two networks. Northwestel indicated that it filed this application to accommodate a specific request made by a customer.

3.

Northwestel stated that it did not anticipate significant demand for the new service. In an attachment to its application, Northwestel provided a forecast of revenue for the proposed service on a confidential basis. The company noted that the proposed rates were benchmarked to similar service offerings by other Canadian telephone companies. Northwestel submitted that benchmarking to other telephone companies was a reasonable approach commensurate with the nature, size and relative insignificance of the service.

4.

Northwestel also proposed changes to make the tariff more easily referenced and to change the name of the service to be consistent with the name used by other Canadian telephone companies.

 

Process

5.

The Commission received comments from Rogers Wireless Inc. (RWI) dated 14 February 2003 and reply comments dated 23 February 2003 from Northwestel. The Commission also received comments dated 3 March 2003 from each of Microcell Telecommunications Inc. (Microcell) and TELUS Communications Inc. (TCI). On 18 March 2003, Northwestel filed reply comments and amendments to its application under Tariff Notice 783A (TN 783A). TCI filed comments with respect to the amended application on 16 April 2003.

6.

On 19 February 2004, Northwestel filed additional amendments to its application under Tariff Notice 783B (TN 783B). On 22 March 2004, Microcell filed comments with respect to the rates proposed in the second amendment to the application. On 26 March 2004, Northwestel filed reply comments.

 

Parties' comments

7.

RWI, TCI and Microcell supported Northwestel's proposal to introduce CCS7 interconnection service. However, they requested that specific modifications be made to Northwestel's proposed tariff.

8.

RWI and TCI suggested that the wording of the proposed tariff be changedto clarify that the proposed rates for CCS7 interconnection should not apply when a WSP opted to exchange CCS7 messages with Northwestel via a third party's CCS7 network. RWI also requested that the Commission direct Northwestel to offer CCS7 transiting service.

9.

TCI further requested that Northwestel's proposed tariff be modified in several other respects. TCI argued that the proposed tariff should be amended to clarify that WSPs which obtained NXX codes directly from the Canadian Numbering Administrator not be required to pay Northwestel's numbering charges. TCI submitted that the tariff should provide WSPs the option of converting existing line-side 100 blocks of telephone numbers to trunk-side access, and the option of subscribing to 1,000 number block routing. TCI also submitted that the proposed tariff should be modified so as to clarify that the WSP link charge would only be applicable with line-side interconnection and that the message relay service (MRS) charge would only be applicable when the service was provided by Northwestel.

10.

Microcell stated that it fully supported the tariff changes recommended by TCI. Microcell noted that these changes would bring Northwestel's trunk-side WSP interconnection tariff in line with the tariffs approved for other incumbent local exchange carriers (ILECs) in Canada.

11.

In reply, Northwestel argued that it should not be required to provide CCS7 transiting service. The company noted that local competition was not permitted in its territory and that it had neither received, nor did it anticipate receipt of, any requests for this service in the immediate future. Northwestel indicated that it was prepared to amend its tariff once it had received a reasonable request for CCS7 transiting service.

12.

Northwestel submitted that the suggestions made by TCI regarding options for converting blocks of telephone numbers from line-side to trunk-side and routing blocks of telephone numbers were not grounds to hold up the approval of the proposed tariff. Northwestel argued that numbering charges and the availability of telephone number block options were matters that were separate from that of the introduction of CCS7 interconnection. Northwestel indicated that it would evaluate the consistency of the options it offers for these services with the options offered by other ILECs and would file appropriate revisions at a later date to eliminate any inconsistencies.

13.

Northwestel indicated that it was proposing to amend its application in TN 783A to clarify that the WSP link charge would only apply to line-side interconnection. Northwestel stated that the proposed tariff modifications would also clarify that in the event that a WSP self-supplies MRS, the company's monthly rate of $0.13 per number for this service would not apply.

14.

In its comments on TN 783A, TCI indicated that Northwestel had misinterpreted one of TCI's original comments. TCI stated that it had requested that the Commission direct Northwestel to clarify that the MRS charge would only apply in situations where a WSP connects directly to Northwestel's CCS7 service. TCI again noted that a WSP that uses another carrier's CCS7 transiting service should not be required to pay the charge.

15.

Northwestel indicated that, as a result of comments submitted by TCI on 16 April 2003, it was proposing further revisions to the proposed tariff in TN 783B.

16.

In particular, Northwestel proposed to introduce wording changes to clarify that it would not prevent WSPs from arranging CCS7 transiting with a third party CCS7 Network provider. Northwestel stated that it could not provide CCS7 transiting service due to its existing network configuration, but acknowledged that another CCS7 network provider might be able to provide this service. Northwestel stated that, in the event that a WSP uses this service from another CCS7 provider, the WSP would not be required to pay Northwestel's charges for Links, Digital Transport, or Administration Fees as found in General Tariff Item 1311. Northwestel, however, added that any fees the company incurred from the CCS7 network provider for the provision of transiting services would be passed on to the WSP receiving the service.

17.

Northwestel also proposed to provide Trunk-side Access service in addition to the CCS7 interconnection arrangements originally submitted in TN 783. Northwestel stated that the rates it proposed for Trunk-side Access were similar to rates proposed by or offered by other companies. In the company's view, benchmarking was appropriate, given the low level of revenues the company expected to generate from this service.

18.

Finally, Northwestel proposed to provide 100 and 1000-block Trunk Side routing service. The company stated that this service would provide for block routing of telephone numbers by seven digits from a Northwestel switch in which the CO code of the telephone numbers resides to a WSP switch. It noted that this service would be available in conjunction with wireless Trunk Side interconnection. Northwestel stated that rates it was proposing for 100 and 1000-block Trunk Side routing service were identical to those proposed by Société en commandite Télébec (Télébec) in Tariff Notice 285B (TN 285B) and similar to the rates of other ILECs.

19.

In its comments on TN 783B, Microcell requested that the Commission reject Northwestel's proposed trunk-side interconnection rates, or at the very minimum replace them with already approved ILEC rates for this service. Microcell submitted that the proposed rates were excessive and could have a determining impact on whether it would be economically viable for WSPs to interconnect with, and compete against, Northwestel and its in-territory mobile affiliate. Microcell argued that Northwestel's costing support, which indicated that the company's proposed rates were similar to those of other companies, was inadequate.

20.

In its reply comments, Northwestel disagreed with Microcell's view that the proposed rates could have a determining impact on whether it is economically viable for WSPs to interconnect with, and compete against, Northwestel and its in-territory mobile affiliate. In support, Northwestel submitted that all WSPs would be required to pay these proposed rates including a wireless company affiliated with Northwestel, therefore these rates would have no effect on the level of competition in the wireless market.

21.

Northwestel also stated that it took issue with Microcell's claim that Northwestel's application had not satisfied the minimum procedural requirements necessary to ensure that its proposed trunk-side interconnection rates were just and reasonable. Northwestel stated that its costing support, which benchmarked its proposed rates with those proposed by Télébec in TN 285B, was not a new precedent.

 

Commission's analysis and determination

22.

The Commission notes that Northwestel revised its application twice in order to address the comments raised by RWI, Microcell and TCI with respect to WSP Trunk-side access and CCS7 transiting service. As a result of these revisions, Northwestel's proposed Wireless Service Provider - Network Access tariff now provides WSPs the option of converting existing line-side 100 blocks of telephone numbers to trunk-side access, and the option of subscribing to 1,000 number block routing. The proposed tariff also makes clear that the WSP link charge would only be applicable with line-side interconnection and that the MRS charge would only be applicable when Northwestel provided the service. The Commission further notes that the proposed tariff for Trunk-side Access does not require WSPs to purchase telephone numbers from the company.

23.

In Long-distance competition and improved service for Northwestel customers, Decision CRTC 2000-746, 30 November 2000, the Commission determined that Northwestel would continue to be regulated under rate of return regulation. The Commission also determined that Northwestel would receive supplemental funding from the national contribution fund which is intended to assist the company in achieving the basic service objectives established in Telephone service to high-cost serving areas, Telecom Decision CRTC 99-16, 19 October 1999. The Commission notes that any revenues generated from the introduction of new services by Northwestel reduce the company's reliance on supplemental funding.

24.

The Commission generally requires an imputation test to be filed in support of the proposed rates for a new service. An imputation test, based on the Phase II costing approach, is used to demonstrate whether the proposed rates are compensatory. The Commission recognizes that it has not yet mandated company-specific Phase II cost studies for Northwestel. Accordingly, the Commission considers it appropriate, as an interim measure, to evaluate Northwestel's applications for new service rates, on a case-by-case basis, using alternate costing support including benchmarking, submitted by Northwestel.

25.

The Commission notes that Northwestel's proposed CCS7 interconnection service rates are marginally higher than Bell Canada's rates for the same service. Accordingly, the Commission considers Northwestel's proposed CCS7 interconnection service rates, excluding its proposed trunk-side and the number block routing rates, to be acceptable.

26.

The Commission notes that in support of its proposed Trunk-side Access and Number Block Routing service rates, Northwestel referenced an application made by Télébec under TN 285B. The Commission also notes that Télébec's costs of providing these services are currently under examination. Consequently, the Commission considers that it would not be appropriate to use Télébec's unapproved rates for the same services as a benchmark to establish Northwestel's rates.

27.

The Commission notes that the highest currently approved ILEC rates for WSP trunk-side access and number block routing service were approved for Télébec in Telecom Order CRTC 2003-49, 24 January 2003 (Order 2003-49). Accordingly, the Commission considers it reasonable to use the WSP trunk-side access and number block routing service rates approved for Télébec in Order 2003-49 as a benchmark for establishing Northwestel's introductory rates for its Trunk-side Access and Number Block Routing services. The Commission notes that although this will result in lower rates for Trunk-side Access and a lower service charge for 100 or 1000-block routing, it will result in an increase to the monthly rate for 100 or 1000-block routing.

28.

In light of the above, the Commission approves Northwestel's application, with the amendments identified below:
 
  • in item 1311.4.II.1, WSP Network Access ─ Trunk-side Access
 

-replace the trunk-side access charge of $59.80 with $30.00 for each access channel to a maximum of 24 channels;

 

-replace the trunk-side access charge of $75.90 with $38.00 for each access channel to a maximum of 48 channels;

 

-replace the trunk-side access charge of $82.80 with $40.00 for each access channel to a maximum of 72 channels;

 

-replace the trunk-side access charge of $86.25 with $42.00 for each access channel to a maximum of 96 channels;

 

-4 replace the charge of $154.10 with $80.00 for each request to activate additional access channels at each location; and

 
  • in item 1311.4.II.2, Number Block Routing
 

-replace the monthly rate of $21.90 with $62.90 for 100 or 1000-block routing, each block; and

 

-replace the service charge of $264.27 with $66.75 for 100 or 1000-block routing, each block.

29.

The revisions take effect as of the date of this order. The Commissiondirects Northwestel to issue forthwith revised tariff pages, reflecting the changes specified above.
  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: 2004-09-30

Date modified: