ARCHIVED - Telecom Order CRTC 2004-355

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Telecom Order CRTC 2004-355

  Ottawa, 29 October 2004

Bell Canada

  Reference: Tariff Notice 6769

Inter-Exchange Dark Fibre


The Commission received an application by Bell Canada, dated 25 September 2003, proposing to introduce General Tariff item 3780, Optical Fibre, in response to a Commission directive in Xit Télécom v. Bell Canada - Provision of fibre optic private networks, Telecom Decision CRTC 2003-59, 22 August 2003 (Decision 2003-59).


Bell Canada proposed monthly rates and service charges for an Inter-Exchange Dark Fibre tariff available through a one, three or five-year minimum contract period and indicated that its Inter-Exchange Fibre facilities could be interconnected to its Intra-Exchange Fibre facilities.


Bell Canada provided an economic study, including imputation test results, in support of its proposed Inter-Exchange Dark Fibre service.


The Commission received comments from Allstream Corp. (Allstream) dated 27 October 2003, 360networks services ltd. and GT Group Telecom Services Corp. (collectively, Group Telecom) dated 27 October 2003, Chapleau Energy Services Corp. (Chapleau) dated 3 November 2003, Futureway Communications Inc., doing business as FCI Broadband (FCI Broadband) dated 3 November 2003, and Xit Telecom Inc. (Xit) dated 22 October, 23 October, 3 November and 8 December 2003. Bell Canada provided reply comments on 13 November 2003.

Positions of parties


Costing issues


Allstream, Group Telecom, FCI Broadband and Xit objected to the costing approach used by Bell Canada, claiming that certain costs should have been excluded from Bell Canada's economic study.


In reply, Bell Canada defended the costing that it provided, indicating that the costing information that it filed was developed using the approved Phase II costing methodology.

Rate issues


Allstream, FCI Broadband and Xit objected to the rates that Bell Canada proposed, submitting that the proposed rates were excessive. Chapleau and Xit submitted that Bell Canada's Inter-Exchange Dark Fibre service should be considered in the nature of an essential service. Xit also submitted that Bell Canada's Inter-Exchange Dark Fibre service should be considered a Category I competitor service, made available to competitors at a rate of Phase II costs plus a 15 percent mark-up.


In reply, Bell Canada indicated that the rates for its Inter-Exchange Dark Fibre service were developed to recover its Phase II costs plus an appropriate mark-up, consistent with a market-based pricing approach that is reflective of the value of the service. Bell Canada submitted that its Inter-Exchange Dark Fibre service did not meet the Commission's criteria for categorization as an essential service and thus should not be subject to the Category I competitor service rate constraint of Phase II costs plus a 15 percent mark-up.

Other matters


Allstream and Xit requested that the Commission direct Bell Canada to include optical repeater equipment as part of its Inter-Exchange Dark Fibre service. Allstream submitted that Bell Canada's tariff must accommodate the provision of optical repeaters in Bell Canada's central offices and fibre huts by customers of the service.


Allstream submitted that an up-to-date list of Bell Canada's Inter-Exchange Dark Fibre service availability should be provided and maintained by the company. Allstream claimed that such a listing would minimize the possibility of unjust discrimination.


Group Telecom noted that Bell Canada's proposed Inter-Exchange Dark Fibre service was only available in pairs of fibre strands and submitted that the service should also be made available in individual fibre strands. Group Telecom was of the view that offering Inter-Exchange Dark Fibre service in single strand increments would enable customers to better meet their requirements, optimize their costs, and permit Bell Canada to allocate dark fibre to customers in a more efficient manner.


Xit submitted that the Commission should make additional efforts to validate the costs filed by Bell Canada and requested that the Commission make Bell Canada's Inter-Exchange Dark Fibre service costs publicly available.


In reply, Bell Canada noted that its Inter-Exchange Dark Fibre service was designed to provide customers with dark fibre facilities in order to configure fibre connectivity. Bell Canada noted that in Decision 2003-59, the Commission defined dark fibre as optical fibre without any optical or electronic signalling as part of its provisioning. Bell Canada submitted that, therefore, it should not be required to include optical repeaters as part of its Inter-Exchange Dark Fibre service.


Bell Canada noted that dark fibre facilities would be accessible to any interested party, at approved tariff rates, subject to availability of suitable facilities. Bell Canada submitted that it already conducted timely dark fibre availability checks for customers and competitors for retail fibre-based services, and would do the same for Inter-Exchange Dark Fibre. Bell Canada submitted that providing the Commission with Inter-Exchange Dark Fibre service information on a continuous basis would impose an unusual workload with associated costs, and requested that the Commission deny Allstream's request.


Bell Canada acknowledged that it was possible to use only a single strand of dark fibre, but noted that the company's provisioning practices required that two separate fibre strands be used to transmit and receive data. Bell Canada submitted that the redundancy gained through paired fibre strands minimized the risks associated with optical power failures to its customers.


Finally, Bell Canada argued that it would be inappropriate to require the disclosure of its costs to competitors, in light of the considerable degree of competition that existed for optical fibre.

Commission's analysis and determination


Costing issues


The Commission notes that the proposed rates for a new service or a rate decrease must be supported by, and satisfy, an imputation test and that the imputation test is the accepted method of determining whether the proposed rates are compensatory.


The Commission finds that the cost estimates provided are reasonable and is satisfied that the proposed rates pass the imputation test.

Rate issues


The Commission notes that Bell Canada failed to submit a price cap classification for its Inter-Exchange Dark Fibre service but that some of the competitors suggested that it be considered in the nature of an essential service and priced at Phase II costs plus a 15 percent mark-up. The Commission notes that in Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002, it classified Intra-Exchange Dark Fibre service as an Other Capped Service and that no upper pricing constraints exist for services being introduced to that basket of services. The Commission considers it appropriate to assign Inter-Exchange Dark Fibre service to the Other Capped Services basket and finds Bell Canada's proposed Inter-Exchange Dark Fibre service rates to be acceptable.

Other matters


The Commission notes Allstream's and Xit's request to include optical repeater equipment as part of Bell Canada's Inter-Exchange Dark Fibre service. The Commission notes that, by definition, dark fibre service would not include additional optical or electronic signalling.


In regard to Allstream's request that Bell Canada provide up-to-date listings of its Inter-Exchange Dark Fibre service, the Commission considers that Bell Canada's proposal to provide Inter-Exchange Dark Fibre service availability checks on a case-by-case basis is acceptable.


Further, the Commission considers that there is insufficient evidence on the record of this proceeding to require Bell Canada to modify its tariff for Inter-Exchange Dark Fibre service to make the service available in individual fibre strands as requested by Group Telecom.


Finally, the Commission considers that, in light of the degree of competition that exists in the optical fibre market, that the public interest in disclosure of Bell Canada's Inter-Exchange Dark Fibre service costs does not outweigh the specific harm that the company might experience as a result of such disclosure. Consequently, the Commission does not consider it appropriate to make publicly available Bell Canada's Inter-Exchange Dark Fibre service costs, as requested by Xit.


In light of the above, the Commission approves Bell Canada's application. The revisions take effect as of the date of this Order.
  Secretary General
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Date Modified: 2004-10-29

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