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Telecom Decision CRTC 2005-35
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See also: 2005-35-1
Ottawa, 15 June 2005
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List of services within the scope of the proceeding on forbearance from the regulation of local exchange services
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Reference: 8640-C12-200505076
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In this Decision, the Commission determines the list of services that are to be included in the scope of the proceeding on forbearance from the regulation of local exchange services.
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Introduction
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1.
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In Forbearance from regulation of local exchange services, Telecom Public Notice CRTC 2005-2, 28 April 2005 (Public Notice 2005-2), the Commission initiated a proceeding and invited comments on a framework for forbearance from the regulation of residential and business local exchange services. The Commission invited comments on the appropriateness of a transitional regime that could provide incumbent local exchange carriers (ILECs) with more regulatory flexibility prior to forbearance. The Commission also invited comments on Aliant Telecom Inc.'s (Aliant Telecom's) Part VII application for forbearance from regulation of residential wireline local services in specified exchanges, filed on 7 April 2004.
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2.
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In Public Notice 2005-2, the Commission established a procedure that allowed the ILECs1 to identify, and other parties to comment on, which tariffed local exchange services were within the scope of the proceeding. The Commission stated that it would issue a determination on the list of services to be considered within the scope of the proceeding.
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3.
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In paragraph 22 of Public Notice 2005-2, the Commission stated that it considered that:
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. local exchange services used by residential and business customers to access the public switched telephone network (PSTN) are within the scope of this proceeding, as are the services charges and any features related to the provision of these services. The scope of this proceeding does not include: public telephone services, customer-specific arrangements (CSAs) and bundles that do not include local exchange services, point-to-point services, operator services, mobile and exchange radio services, and competitor services.
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4.
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Further, in paragraph 23 of Public Notice 2005-2, the Commission noted that:
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. some local exchange services that are within the scope of this proceeding use underlying access and transport services. An example of such a service is Megalink, sometimes referred to as ISDN-PRI, a local exchange service that requires components of Digital Network Access (DNA) service. The Commission considers that the dependencies between these underlying access and transport services and local exchange services are relevant to this proceeding.
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5.
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In paragraph 39 of Public Notice 2005-2, the Commission directed the ILECs to file with the Commission their lists of tariffed local exchange services that they considered to be within the scope of this proceeding. The Commission further directed that, for each service, the ILECs were to provide: the tariff number and a direct website link to the tariff, item number, service name, service description, and basket to which the service was assigned. Additionally, if the service was dependent on another service, the Commission directed the ILECs to provide a description of the nature of the dependency and an identification of the underlying service, including: tariff number and a direct website link to the tariff, item number (if tariffed), service name, and service description.
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Process
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6.
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The Commission received lists of tariffed local exchange services from Aliant Telecom, Bell Canada, MTS Allstream Inc. (MTS Allstream), Société en commandite Télébec (Télébec), and TELUS Communications Inc. (TCI), dated 13 May 2005. The Commission received a list of tariffed local exchange services from Saskatchewan Telecommunications (SaskTel), dated 16 May 2005.
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7.
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The Commission received comments from Call-Net Enterprises Inc. (Call-Net), the Canadian Cable Telecommunications Association (CCTA), the Commissioner of Competition (the Competition Bureau), FCI Broadband, and MTS Allstream, dated 20 May 2005.2
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8.
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The Commission received reply comments filed jointly by Bell Canada and Aliant Telecom, dated 27 May 2005, to address the comments filed by Call-Net, the CCTA, and MTS Allstream.
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9.
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The Commission notes that Public Notice 2005-2 did not include a provision for reply comments with regard to the tariffed local exchange services proposed by the telephone companies for inclusion within the scope of the proceeding. However, the Commission considers that the information provided by Bell Canada and Aliant Telecom was not prejudicial to any other party and provided clarification with respect to some issues in dispute over the service lists. Accordingly, the Commission determines that the reply comments provided by Bell Canada and Aliant Telecom will form part of the record of this proceeding.
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Positions of parties
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10.
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Parties who provided comments on the ILECs' lists of tariffed services raised questions with respect to the following:
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- Digital Network Access service;
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- Hotel-originated toll access channels;
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- Foreign exchange service;
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- 9-1-1 and message relay service.
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Digital Network Access service
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11.
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Aliant Telecom, Bell Canada, SaskTel, and Télébec included Digital Network Access (DNA) service in their filings of the tariffed services they considered to be within the scope of the proceeding. MTS Allstream and TCI did not include DNA service in their respective filings.
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12.
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The CCTA submitted that DNA service was not a local exchange service as it did not provide subscribers with the ability to call and/or receive calls from any telephone with access to the PSTN. The CCTA further submitted that in Commission denies forbearance for digital network access services, Order CRTC 2000-653, 14 July 2000 (Order 2000-653), the applicants3 defined DNA services as:
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Providing a subscriber with a dedicated digital point-to-point or multipoint transport capability of DS-0 bandwidth or greater between the subscriber's premises and a telecommunications carrier's central office (CO) or point of presence (POP) in the same wire centre, for the purposes of transmitting any form of information.
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The CCTA concluded that, under this definition, DNA service was not a local exchange service and was outside the scope of the proceeding.
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13.
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MTS Allstream stated that DNA service was a local access service that could be used to provision underlying access and transport for local exchange services. The CCTA noted that some ILECs had identified that Megalink/ISDN-PRI and digital exchange access (DEA) services, all of which provided connectivity to the PSTN, were dependent on DNA service in order for customers to use them. The CCTA noted that the Commission had stated in Public Notice 2005-2 that dependencies between underlying access services, transport services, and local exchange services were relevant to the proceeding. The CCTA submitted, however, that these dependencies did not imply that the underlying DNA service was a local exchange service within the scope of the proceeding. MTS Allstream further submitted that, in Public Notice 2005-2, the Commission had clearly distinguished local exchange services from local access services, such as DNA service. MTS Allstream submitted that, as such, DNA service was outside the scope of the proceeding.
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14.
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MTS Allstream submitted that including local access transport services would raise significantly different issues from those raised by conventional local exchange services. MTS Allstream did not object to including DNA service. However, MTS Allstream did state that to properly take into account the appropriate considerations for services such as DNA service, parties would have to expand their submissions, which might affect the schedule and timing of the public consultation scheduled for 26 to 29 September 2005.
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15.
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Call-Net submitted that the Commission had only recently concluded an exhaustive market analysis of point-to-point services in Competitor Digital Network Services, Telecom Decision CRTC 2005-6, 3 February 2005 (Decision 2005-6). Call-Net noted that in Decision 2005-6, the Commission had concluded that: the ILECs were the dominant suppliers of DNA and intra-exchange services used by competitors; self-supply of DNA equivalent access and intra-exchange facilities was limited and third-party supply of such facilities was even further limited; hydro telecommunications service providers and cable companies were, at that time, insignificant suppliers of DNA and intra-exchangeservices;and there was a need for the ILECs to develop and offer competitor digital network (CDN) services. Call-Net submitted that these conclusions reaffirmed the Commission's determination in Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002, that DNA service should be made available to competitors. Call-Net submitted that DNA service was therefore outside the scope of the proceeding.
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16.
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Bell Canada and Aliant Telecom stated that DNA service was within the scope of the proceeding as it applied to local exchange services. Bell Canada and Aliant Telecom submitted that DNA service was used to provide the underlying access component of Megalink and DEA services. Bell Canada and Aliant Telecom submitted that including DNA service in the proceeding was consistent with the Commission's determinations specified in paragraph 23 of Public Notice 2005-2.
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17.
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Bell Canada and Aliant Telecom stated that they had not proposed that the outcome of the proceeding become a framework for forbearance from the regulation of DNA services. Bell Canada indicated that it had filed a separate Part VII application seeking forbearance for high-speed intra-exchange digital services, and that the Commission had listed this application as a separate process in CRTC 3-Year Work Plan - 2005-2008,1 April 2005. Bell Canada and Aliant Telecom submitted that the underlying access component of Megalink and DEA services, which, for the most part, comprised DS-0 and DS-1 services, was not part of Bell Canada's Part VII application. Bell Canada and Aliant Telecom submitted that the access component needed to be considered as part of the proceeding, irrespective of whether it was provided as an integral part of an ILEC's tariff for the service, as in MTS Allstream's and TCI's respective cases for their Megalink-equivalent ISDN-PRI services, or by reference to another tariff, as in Bell Canada's and Aliant Telecom's respective cases. Bell Canada and Aliant Telecom concluded that the underlying access components for Megalink and DEA must be addressed by the Commission when examining issues such as the relevant market and the criteria for determining whether the relevant market was sufficiently competitive for forbearance from the regulation of such services.
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Ethernet access service
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18.
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Bell Canada, SaskTel, and Télébec included Ethernet access service in their filings of the tariffed services they considered to be within the scope of the proceeding.
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19.
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Call-Net, the CCTA, and MTS Allstream objected to including Ethernet access service in the proceeding for various reasons, including their respective submissions that Ethernet access was not a local exchange service. In their reply comments, Bell Canada and Aliant Telecom agreed that Ethernet access service should be excluded from the scope of the proceeding.
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Generic services
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Exchange rate bands
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20.
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Call-Net submitted that Bell Canada's General Tariff CRTC 6716, item 60, Exchange Rate Bands, and Aliant Telecom's Tariff CRTC 21491, items 200.1 and 200.2, set out, among other things, the classification of each exchange to various bands. Call-Net submitted that these Tariffs governed the application of rates for unbundled loops and various band-sensitive components of CDN service in each exchange.
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21.
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Call-Net submitted that forbearance from the regulation of the above tariffed services would permit Bell Canada and Aliant Telecom to reclassify exchanges to various rate bands, without seeking regulatory approval. In Call-Net's view, this, in turn, would permit these ILECs to determine the application of loop rates in specific exchanges or wire centres, and ultimately, would affect the costing of loops for individual bands. Call-Net submitted that forbearance from the regulation of these Tariffs was equivalent to partial forbearance from the regulation of Competitor services with band-sensitive rates.
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22.
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Bell Canada and Aliant Telecom submitted that it was their understanding that the tariffs pertaining to exchange and band classifications were within the scope of the proceeding only in respect of their association with local exchange services that were otherwise within scope.
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Service charges
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23.
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Call-Net and the CCTA noted that all of the ILECs had proposed including some or all of their standard service charge tariffs. Call-Net and the CCTA also noted that these service charges were generally applicable to a variety of retail service activities and to certain Competitor service elements or activities. Call-Net submitted that when these service charges were applied in the context of Competitor services, these charges were outside the scope of the proceeding.
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24.
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Call-Net noted that the late payment charge applied to all tariffed services, including Competitor services, non-forborne inter-exchange private line services, and local point-to-point services. Call-Net submitted that, of these, only late payment charges assessed in respect of retail local exchange services were within the scope of the proceeding.
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25.
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The CCTA and MTS Allstream noted that Bell Canada had identified late payment charges and not sufficient funds (NSF) cheque charges as local exchange services within the scope of the proceeding. In both the CCTA's and MTS Allstream's view, these elements, as part of Bell Canada's General Tariff 6716, applied to all services within the Tariff, not just to local exchange services. The CCTA submitted, as an example, that services such as lease of channels and gateway access were not identified as local exchange services, but were affected by the late payment charge or the NSF cheque charge.
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26.
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Bell Canada and Aliant Telecom submitted that NSF cheque, late payment, and service charges were within the scope of the proceeding to the extent that they applied to local exchange services and other services within the scope of the proceeding.
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27.
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Call-Net submitted that, in Bell Canada's and MTS Allstream's territory, the diagnostic maintenance charge that was applied to retail customers was also applied to competitors. Call-Net submitted that Aliant Telecom's Local Network Interconnection Tariff CRTC 21491, item 646.3(b)ii, required the application of a diagnostic maintenance charge in similar circumstances, and made reference to the application of the labour rates contained in item 270, Customer Provided Terminal Equipment Maintenance. In Call-Net's view, diagnostic maintenance charges applied to entrants were excluded from the scope of the proceeding.
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28.
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Bell Canada and Aliant Telecom submitted that diagnostic maintenance charges were only within scope with respect to the local exchange services within scope to which the maintenance charges applied.
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29.
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The CCTA submitted that Bell Canada's, MTS Allstream's, and TCI's respective service charge tariffs included items applicable to both local exchange services and non-local exchange services. The CCTA submitted, as examples, TCI's Tariff 1005, item 110, and Bell Canada's Access Service Tariff 7516, item 10.1(d), each of which, in the CCTA's view, was generally applicable. The CCTA also submitted MTS Allstream's application of Tariff 24001, item 510 - Services Charges to Tariff 24001, item 2600.3 - Mobile Telephone Service, a non-local exchange service.
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30.
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The CCTA submitted that it did not dispute that these types of tariff elements would not apply to local exchange services if and when the Commission forbore from the regulation of local exchange services. However, in the CCTA's view, the ILECs had failed to identify whether the tariff items in their respective lists also applied to non-local exchange services. The CCTA submitted that, to the extent that tariff items identified by the ILECs were also applicable to components of other tariffs, including tariffs related to Competitor services, it would be inappropriate for the Commission to consider forbearance from the regulation of these tariff items as part of this proceeding.
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Hotel-originated toll access channels
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31.
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Call-Net submitted that, according to item 430.4(a) of Bell Canada's General Tariff, toll access channels were provided for "transmitting hotel-originated message toll calls" via a "direct connection from a customer's premises to a company toll operator centre or an alternative provider of long distance services (APLDS) point of presence, and are provided for the purpose of establishing connection to an outgoing long distance network only." In Call-Net's view, when providing access to APLDS' networks, these toll access channels were akin to unbundled local loops. Call-Net submitted that toll access channels that provided access to APLDS' networks should be considered Competitor services. Further, Call-Net submitted that regardless of whether toll access channels provided access to ILECs' or APLDS' toll networks, toll access channels did not provide access to the local PSTN, and accordingly, were outside the scope of the proceeding.
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32.
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In response, Bell Canada submitted that hotel-originated toll access channels represented functional substitutes for connections to a long distance carrier via a local exchange service, and accordingly, were within the scope of the proceeding.
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Foreign exchange service
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33.
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Call-Net noted that foreign exchange (FX) service consisted of an exchange access component and an inter-exchange distance component. In Call-Net's view, the inter-exchange distance component was comparable to non-forborne analogue private line services. Call-Net submitted that forbearance from the regulation of the inter-exchange distance component of FX service amounted to forbearing from certain analogue private line services. Call-Net submitted that the inter-exchange distance component was outside the scope of the proceeding. In their reply comments, Bell Canada and Aliant Telecom agreed with Call-Net's position on this issue.
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Competitor services
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34.
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Call-Net submitted that Bell Canada's Integrated Voice Messaging Service (IVMS), MTS Allstream's Voice Messaging Integration (VMI), and TCI's VMS Network Portability Access Service were classified as Category I competitor services.
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35.
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Call-Net noted that, in Public Notice 2005-2, the Commission explicitly excluded Competitor services from the scope of the proceeding. Call-Net submitted that the above-referenced services were thus outside the scope of the proceeding.
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36.
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Bell Canada agreed with Call-Net that the components of IVMS classified as Category I competitor services, namely Bell Canada's General Tariff CRTC 6716, items 2025.4 and 2025.7, were outside the scope of the proceeding.
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9-1-1 and message relay service
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37.
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The CCTA noted that, in their lists, Aliant Telecom and Bell Canada had included 9-1-1-related services: Aliant Telecom's Provincial Enhanced 911 Service, General Tariff 21491, item 235; and Bell Canada's 9-1-1 Public Emergency Reporting Service, General Tariff 6716, item 1400, respectively. The CCTA noted that, in the case of Aliant Telecom, the same tariff item was charged to competitors that used this service to provide 9-1-1 capability to their local exchange service end-customers. The CCTA further noted that, in Bell Canada's case, the referenced tariff also applied to wireless access services.
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38.
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Bell Canada and Aliant Telecom submitted that they considered message relay service (MRS) and 9-1-1 to be within the scope of the proceeding since these services had to be provided in conjunction with local exchange services. In Bell Canada's view, ancillary services, such as 9-1-1 and MRS, were within the scope of the proceeding to the extent that they were provided in conjunction with local exchange services.
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Commission's analysis and determinations
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Digital Network Access service
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39.
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The Commission notes Bell Canada's Part VII application seeking forbearance from the regulation of high-speed intra-exchange digital services includes DNA at DS-3 speeds and greater. The Commission notes that DS-0 and DS-1 DNA services areneither part of that application nor part of the process for that application specified in CRTC 3-Year Work Plan - 2005-2008.
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40.
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The Commission notes that parties, including Bell Canada and Aliant Telecom, generally agree that DNA is not a local exchange service. The Commission also notes that the parties generally agree that DNA service is used to support services such as Megalink, DEA, and ISDN-PRI, which the ILECs correctly identified as being within the scope of the proceeding. The Commission notes, in particular, the CCTA's position that dependency of such services on underlying access services, such as DNA service, does not imply that underlying services are within the scope of the proceeding, and MTS Allstream's position that, in Public Notice 2005-2, the Commission clearly distinguished local exchange services from local access services such as DNA service.
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41.
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The Commission considers that DNA service itself is outside the scope of the proceeding because it is not a local exchange service. However, the Commission notes that the dependencies between local exchange services that meet the requirements of paragraph 22 in Public Notice 2005-2 and the underlying transport or access services, such as DNA service, are relevant to the proceeding.
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Ethernet access service
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42.
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The Commission considers that Ethernet access service is outside the scope of the proceeding because it is not a local exchange service.
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Generic services
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43.
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The Commission notes that, in their respective submissions, the ILECs included services and service charges related to the provision of local exchange services that are also applicable to various non-local exchange services. For the purpose of this Decision, the Commission will describe such services as generic services.
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44.
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The Commission notes that tariffs for generic services apply not only to local exchange services but to other telecommunications services that are not within the scope of this proceeding. Accordingly, the Commission considers that generic services are outside of the scope of the proceeding. The Commission notes, however, that the tariffs for generic services apply only to tariffed services. Accordingly, if the Commission forbears from regulating a particular local exchange service, the relevant generic service tariffs would no longer apply to that forborne service.
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45.
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Specifically, the Commission notes that exchange rate band tariffed services are generic services. The Commission considers that Bell Canada's General Tariff, item 60, is relevant to Bell Canada's General Tariff 6716, item 70 - Primary Exchange Service - only to the extent that item 60 provides the pricing structure for item 70. The Commission considers that item 60 is a pricing structure applicable to regulated services, and, as such, is intrinsic to the continued price regulation of services outside the scope of this proceeding. Accordingly, the Commission considers that item 60 fails to meet the requirements set out in paragraphs 22 and 23 of Public Notice 2005-2.
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Hotel-originated toll access channels
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46.
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The Commission notes that hotel-originated toll access channels service, described in item 430.4(a) of Bell Canada's General Tariff 6716, is provided in conjunction with a private branch exchange (PBX) service, to offer hotel customers a dedicated connection to a long distance carrier. The Commission considers PBX service to be a local exchange service, and further considers hotel-originated toll access channels service, when used in the fashion described above, to be a feature related to the provision of PBX services in accordance with paragraph 22 of Public Notice 2005-2. Therefore, the Commission considers hotel-originated toll access channels to be within the scope of the proceeding.
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Foreign exchange
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47.
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The Commission notes that Aliant Telecom, Bell Canada, and Call-Net agree that FX service consists of an exchange access component and an inter-exchange distance component, and further, that the inter-exchange component should be considered outside the scope of this proceeding as it is comparable to non-forborne analogue private line services. The Commission considers that FX service is outside the scope of the proceeding as it provides users with a capability equivalent to a private line between exchanges.
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Competitor services
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48.
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The Commission notes that Public Notice 2005-2 specifically excluded Competitor services from the scope of the proceeding. Accordingly, the Commission considers that competitor IVMS, VMI and VMS network portability access are outside the scope of the proceeding.
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9-1-1 and message relay service
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49.
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The Commission notes that Bell Canada and TCI included MRS as a local exchange service while other parties excluded MRS. The Commission notes that ILEC relay services provide the facilities and operators that facilitate communication between the hearing and the hearing impaired. The Commission notes that competitors also make use of these facilities and operators for the purpose of providing MRS to their customers. In the Commission's view, MRS is both an operator service and a Competitor service, and for these reasons, is specifically excluded from this proceeding by Public Notice 2005-2.
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50.
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The Commission notes that ILEC 9-1-1 services provide facilities to public safety answering points for the purposes of providing emergency services to the public. The Commission considers that such facilities do not provide access to the PSTN for the purposes of local calling but, instead, tunnel through the PSTN in order to provide access to emergency services.
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51.
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In light of the above, the Commission considers that 9-1-1 service is not a local exchange service as specified in paragraphs 22 and 23 of Public Notice 2005-2.
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Other matters
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Bundles
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52.
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The Commission notes that in their service lists, the ILECs indicated their view that bundles containing local exchange services should be considered within the scope of the proceeding.
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53.
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The Commission notes that, in this Decision, it is making a determination on the individual services that are considered to be within the scope of the proceeding. The Commission also notes that bundles are simply combinations of individual services under a rate structure and that tariff approval is not required for a bundle that does not include any tariffed service. In light of the above, the Commission considers it unnecessary to include service bundles within the scope of this proceeding.
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Construction services
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54.
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The Commission notes that all ILECs submitted some construction service charges to be considered within the scope of the proceeding. The Commission notes that the tariffs for construction service charges apply to both local exchange services and other telecommunications services outside the scope of the proceeding. Accordingly, the Commission considers that construction service charges are outside of the scope of the proceeding. The Commission notes, however, that the tariffs for construction service charges apply only to tariffed services. Accordingly, if the Commission forbears from regulating a particular local exchange service, the relevant construction service charge tariffs would no longer apply to that forborne service.
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Conclusion
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55.
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In light of the above, the Commission findsthat the tariff items listed in Attachment 1 to this Decision contain the existing local exchange services and dependencies that the Commission considers to be within the scope of this proceeding. The Commission notes that some of the ILECs' tariffs contain groupings of services, some of which may not be local exchange services or dependencies within the scope of the proceeding.
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Secretary General
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This document is available in alternative format upon request, and may also be examined in PDF format or in HTML at the following Internet site: www.crtc.gc.ca
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_________________________
Date Modified: 2005-06-15