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Telecom Order CRTC 2005-21
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Ottawa, 13 January 2005
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Société en commandite Télébec
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Reference: 8340-T78-200405482
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Fibre swapping agreement
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1.
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The Commission received an application by Société en commandite Télébec (Télébec), dated 1 June 2004, requesting approval of a fibre swapping agreement between Télébec and Bell Canada (collectively, the parties), dated 30 November 1999, and an amendment to that agreement, dated 30 March 2004.
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2.
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Télébec stated that the parties had discovered, while developing the amendment, that through an administrative oversight neither party filed the original fibre swapping agreement for Commission approval in 1999.
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3.
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Télébec indicated that the original agreement covered intra and inter-exchange fibres between various cities throughout Québec, totalling 485.3 km of fibre provided by Bell Canada and 451.6 km of fibre provided by Télébec. Télébec submitted that the units of fibre that each party provided was equivalent, within 33.7 km, and that no other sum would be paid by either party. Télébec submitted that the amendment to the agreement modified the number of fibres and exchanges affected, changing the total distance to 459.7 km of fibre provided by Bell Canada and 451.6 km of fibre provided by Télébec.
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Process
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4.
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The Commission received comments from Xit télécom Inc. (Xit), dated 5 July 2004, and reply comments from Télébec on 16 July 2004.
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Position of parties
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5.
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Xit opposed the fibre swapping agreement between the parties. Xit indicated that the original swapping agreement heavily favoured Télébec, since the monetary value of the fibre provided by Bell Canada was significantly higher than that provided by Télébec. Xit noted that the parties were affiliated and submitted that the agreement constituted cross-subsidization, which it argued would not be in the public interest. Xit requested that, consequently, the Commission deny the proposed agreement.
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6.
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Télébec submitted that Xit's arguments were not based on the total optical fibre distances being swapped, which Télébec reaffirmed were, in terms of distance of fibre provided, within 7 percent of each other in the 1999 agreement and within 2 percent of each other in the 2004 amended agreement. Télébec indicated that it would be virtually impossible to structure a fibre swapping agreement where the amount of fibre exchanged was exactly the same, and maintained that the proposed agreement was, for all practical purposes, an equivalent exchange of fibre.
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Commission's analysis and determination
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7.
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In Telecom Order CRTC 99-346, 13 April 1999, the Commission denied a fibre swapping agreement between Bell Canada and one of its affiliated companies. The Commission noted that it had previously approved fibre-swap agreements when optical fibre facilities were not available under a general tariff and when an agreement did not involve the provision of local fibre facilities between affiliated companies. The Commission considered that while an agreement might involve the swapping of equivalent units of fibre, the costs of such units might not necessarily be the same. Consequently, the Commission determined that where a service was available under a general tariff, then that tariff should be used to provide the service instead of an agreement.
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8.
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In Fibre swapping agreement, Telecom Order CRTC 2004-356, 29 October 2004, the Commission denied a fibre swapping agreement between NorthernTel, Limited Partnership (NorthernTel) and Bell Canada. The Commission directed NorthernTel to file for approval an inter-exchange fibre tariff and directed Bell Canada and NorthernTel to apply their respective tariffs to charge for the exchanged fibres.
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9.
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The Commission notes that although Bell Canada has an approved general tariff for intra and inter-exchange optical (dark) fibre, Télébec does not. The Commission notes that in Follow-up to Decision 2003-58 (Decision 2003-4) - Inter-exchange dark fibre (Show Cause), Télébec argued against being required to file a general tariff for intra and inter-exchange dark fibre on the grounds that it did not want to be in the business of providing dark fibre.
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10.
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The Commission considers that the use of a general tariff by Télébec and Bell Canada would address concerns regarding potential unjust discrimination or undue preference with respect to fibre swapping. Consistent with its previous determinations regarding fibre swapping agreements between affiliated companies, the Commission considers it appropriate to require the parties to charge for the respective fibres being swapped based on approved tariffs.
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11.
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In light of the foregoing, the Commission denies the agreement and directs Télébec to file for approval an intra and inter-exchange optical (dark) fibre general tariff within 30 days. The Commission directs the companies to use the applicable general tariffs forthwith, once Télébec's general tariff has been approved, to charge for the fibres used by parties.
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Secretary General
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This document is available in alternative format upon request and may also be examined at the following Internet site: http://www.crtc.gc.ca
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Date Modified: 2005-01-13