ARCHIVED - Telecom Commission Letter - 8623-C12-200610924

Letter

Ottawa, 18 October 2006

Our File: 8623-C12-200610924

By E-Mail

To: Distribution list

Re: Telecom Public Notice CRTC 2006-12 - Proceeding to reassess certain aspects of the local forbearance framework established in Decision 2006-15: Placement of certain aggregated information on the public record

In a letter dated 20 September 2006 , parties that provided data in confidence as part of this proceeding were requested to show cause why the Commission should not place on the public record certain information on a nationally aggregated basis.

The aggregated information proposed to be put on the public record consisted of:

• actual and forecast total Network Access Services (NAS) and NAS-equivalents (connections) and associated revenues, separately for business and residence and for Incumbent Local Exchange Carrier (ILEC) and non-ILEC service providers;

• actual average percentage of telephone numbers that were ported into non-ILECs' local exchange services, averaged across non-ILEC service providers based on connections, separately for business and residence; and
  
• actual average monthly churn rates, averaged across non-ILEC service providers based on connections, separately for business and residence.

Responses were received from Bell Canada; Bell Aliant Regional Communications, Limited Partnership ( Bell Aliant); MTS Allstream Inc. (MTS Allstream); Saskatchewan Telecommunications (SaskTel); TELUS Communications Company (TCC); Rogers Communications Inc (RCI); Cogeco Cable Inc. (Cogeco) and Télébec, société en commandite (Télébec).

Positions of the parties

MTS Allstream did not object to the release of the information on a nationally aggregated basis.

RCI did not object to the release of nationally aggregated numbers in the manner proposed by the Commission for the year 2006 and earlier years.

RCI submitted that, generally, it provided year-end guidance publicly for the current year in January of that year and it did not provide multiple-year guidance. RCI also submitted that it did not believe it was appropriate to disclose any aggregated numbers for years beyond the year for which companies had provided guidance.

In RCI's view, the proposed disclosure of forecast confidential information would permit public insight into the overall pricing intentions of the cable industry, since average prices could be derived from the total revenue and total number of connections data that the Commission had proposed to place on the public record. RCI submitted that disclosure would cause it direct and specific harm by providing information of great competitive value to the company's competitors on the public record. Further, RCI submitted that the public interest that would be served by the release of the data would be minimal, if any, and that it did not outweigh the direct harm that might result from the disclosure.

RCI submitted that the determinations to be made in matters pertaining to this proceeding do not appropriately rest on forecasts of future market share, number ports and churn figures that may or may not prove to be accurate.   RCI argued that a review of the abridged responses to interrogatories showed that the data is inconsistent.   RCI submitted that aggregations of incomplete datasets could result in the disclosure of company specific data and that, therefore, the proposed release of aggregated information may harm the public interest because it would be misleading and inconsistent.

Cogeco submitted that it concurred with RCI's view that it would not be appropriate to disclose any aggregated numbers for years beyond the fiscal year for which companies had provided public guidance to the financial community.

SaskTel questioned the relevance of information on share of revenue, the porting of numbers, and average monthly churn to the matter of the appropriate market share loss threshold to be applied in relation to forbearance of retail local exchange services.

Bell Aliant, Bell Canada , SaskTel, TCC, and Télébec submitted that national-level data regarding local services provide no useful information regarding the conditions in any given local area and that aggregated data distorts the view of the competitive situation in Local Forbearance Regions.  

Bell Aliant, Bell Canada , and TCC submitted that the forecast data to be aggregated was not complete.   TCC submitted that parties had applied different methodologies used to derive the data and that a number of parties had not filed responses. TCC also submitted that the Commission's interrogatories were not served on all access-independent voice over Internet Protocol providers in TCC's operating territory.

Bell Aliant and Bell Canada submitted that the data on the record is not sufficient to complete a national forecast and that publication of incomplete data could lead parties to erroneous conclusions.

Bell Aliant submitted that in Forbearance from the regulation of retail local exchange services , Telecom Decision CRTC 2006-15, 6 April 2006 , the Commission had already determined that revenue is not an appropriate method for calculating market share for the purposes of a forbearance framework and that, therefore, the presentation of revenues distracts from the issues under consideration in the proceeding.

Bell Aliant and Bell Canada submitted that many of the forecasts are now nine months old and that, in the meantime, there may have been significant changes in the market.   These companies questioned the reliance of such forecasts, submitting that parties relying on them could draw erroneous conclusions.

Bell Canada further submitted that t he results of any analysis of the average percentage of telephone numbers that were ported into non-ILECs' local exchange services are likely to be ambiguous due to the rapid rate of growth in the installed base of non-ILEC service providers.

Determination

Parties' submissions have been carefully examined in light of sections 38 and 39 of the Telecommunications Act and section 19 of the CRTC Telecommunications Rules of Procedure .

Commission staff considers that there is a public interest in the disclosure of the information aggregated on a national basis as it relates to the status of competition for local exchange services.   Commission staff also considers that disclosure of data at this level of aggregation would result in little, if any, direct harm to the parties that provided specific company information.   In Commission staff's view, the public interest in disclosing the information set out below on a nationally aggregated basis outweighs any specific direct harm that may result from such disclosure.

In light of the above, and taking into account the completeness of the data submitted, Commission staff determines that the following information, aggregated on a national basis, should be placed on the public record:

• actual residential and business connections and associated revenues for ILEC and non-ILEC service providers, for the years 2004 and 2005, and for the period ending August 2006;
• average monthly churn rates for residential and business services, averaged across non-ILEC service providers based on connections for the year 2005 as of December 31 and the year 2006 as of August 31; and
• percentage of telephone numbers that were ported into non-ILECs' local exchange residential and business services, averaged across non-ILEC service providers, based on connections for the year 2005 as of December 31 and the year 2006 as of August 31.

Commission staff notes that it is expected that the data pertaining to residential services will be placed on the public record by 20 October 2006 so that it is available for use by parties in their comments.  

With respect to the data pertaining to business services, staff notes that Bell Canada is not yet in a position to provide the requested information but expects to do so within the coming weeks.   Accordingly, the data pertaining to business services, aggregated on a national basis, will be placed on the public record following receipt of the information from Bell Canada . Depending on when the aggregated data is placed on the public record, parties will be given an opportunity to revise their comments and reply comments in light of the data pertaining to business data. Commission staff notes that any such revisions will necessarily be confined to addressing the impact of such data.

Yours sincerely,

Original signed by

John Macri
Director, Financial and Regulatory Affairs  

c.c:   Adam Mills (819) 997-4574
        William Lloyd (819) 997-4654
        Parties to Telecom Public Notice CRTC 2006-12

Distribution List:

regulatory.matters@aliant.ca; bell.regulatory@bell.ca iworkstation@allstream.com; document.control@sasktel.sk.ca; reglementa@telebec.com; regulatory.affairs@telus.com; telecom.regulatory@cogeco.com; regaffairs@quebecor.com; david.watt@rci.rogers.com; ken.englehart@rci.rogers.com; jean.brazeau@sjrb.ca; esther.snow@sjrb.ca; regulatory.matters@corp.eastlink.ca; andrew@isptelecom.net; dave.jarrett@sympatico.ca; regulatory@corporate.fcibroadband.com; donald.dupuis@maskatel.qc.ca; johnp@mountaincable.on.ca; documents@accesscomm.ca; pwightman@wightman.ca; jesse@vianet.ca; jschacter@babytel.ca; yb@comwave.net; marcel.mercia@cybersurf.com; christian.tacit@cybersurf.com; regulatory@primustel.ca; rwdelsesto@swidlaw.com; john.lacalamita@ca.mci.com; brovet@yak.ca; Joe.Parent@vonage.com;