ARCHIVED - Telecom Decision CRTC 2007-77

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Telecom Decision CRTC 2007-77

  Ottawa, 31 August 2007
 

Applications to review and vary Ethernet and ADSL Orders

  Reference: 8662-B2-200702771, 8662-S22-200704199, 8662-S22-200704529, 8662-T66-200703464 and 8662-T66-200704462
  In this Decision, the Commission disposes of applications made by Bell Aliant Regional Communications, Limited Partnership, Bell Canada, Saskatchewan Telecommunications and TELUS Communications Company (TCC) (collectively, the Companies), to review and vary several Orders dated 25 January 2007 related to the Companies' provision of Ethernet and Asymmetric Digital Subscriber Line (ADSL) services (the Orders).
  The Commission rescinds certain of the Orders' determinations regarding the Companies' competitor Ethernet and ADSL services. As a result, except for the determinations that TCC has implemented, SaskTel's ADSL service charge, and the determinations that are not the subject of the review and vary applications, the Companies' competitor Ethernet and ADSL services available to competitors on 24 January 2007, prior to the issuance of the Orders, remain in place.
 

Introduction

1.

Bell Aliant Regional Communications, Limited Partnership (Bell Aliant) and Bell Canada (collectively, Bell Canada et al.), Saskatchewan Telecommunications (SaskTel) and TELUS Communications Company (TCC) (collectively, the Companies) filed applications between February and May 2007 to stay and to review and vary several orders related to the Companies' provision of Ethernet and Asymmetric Digital Subscriber Line (ADSL) servicesdated 25 January 2007. The order relating to the Companies' provision of Ethernet service is Telecom Order 2007-20 (the Ethernet Order). The orders relating to the Companies' provision of ADSL services are, in the case of Bell Canada et al., Telecom Orders 2007-21 and 2007-22; in the case of SaskTel, Telecom Order 2007-24, and in the case of TCC, Telecom Order 2007-25 (the ADSL Orders). The Ethernet and ADSL Orders are referred to collectively as the Orders.

2.

More specifically, Bell Canada et al. and TCC requested that the Commission review and rescind the Ethernet Order in its entirety. SaskTel requested that the Commission review and vary the Ethernet Order by rescinding paragraphs 130, 169, 185, 249, 256, and 303. SaskTel did not request that the Commission rescind the determination that gave final approval of its retail Ethernet access service.

3.

Bell Canada et al. further requested that the Commission review and rescind Telecom Orders 2007-21 and 2007-22 in their entirety. SaskTel requested that the Commission review and vary Telecom Order 2007-24 by rescinding paragraphs 42, 48, 49, and 52. With regard to paragraph 49, SaskTel specifically requested that the Commission vary its determination to approve an ADSL service charge of $1001 per access on a final basis and requested that it be increased to $260 per access. SaskTel did not request that the Commission rescind the determinations it had implemented. TCC requested that the Commission review and vary Telecom Order 2007-25 by varying paragraph 63 and rescinding paragraphs 64, 65, and 66. TCC requested the rescission of the determinations it had implemented.

4.

TCC made a submission dated 4 May 2007 (TCC's 4 May 2007 submission) in which it requested that the Commission rescind its findings in Telecom Order 2007-25 with respect to volume-based rates if it granted Bell Canada's application to review and vary Telecom Order 2007-22. TCC also requested that, in the alternative, the Commission provide TCC with the opportunity to show cause why it should not remove volume-based rates for its ADSL services. TCC further requested that in the event the Commission determined that volume-based rates should be removed from Bell Canada's ADSL rate structure, it amend the effective date of the direction at paragraphs 57 and 58 of Telecom Order 2007-25 to align with the effective date applicable to Bell Canada in Telecom Order 2007-22.

5.

The Companies requested that the Commission consider the matters in question in light of the direction issued by the Governor in Council to the Commission (the Policy Direction)2as part of the broader proceeding initiated in Telecom Public Notice 2006-14 (the Essential Services proceeding) to review the regulatory framework for wholesale services provided by the large incumbent local exchange carriers (ILECs), the competitive local exchange carriers, and cable carriers, including the definition of essential services. This Decision generally refers to wholesale services as competitor services.

6.

The Canadian Association of Internet Providers, Cybersurf Corp. (Cybersurf), MTS Allstream Inc. (MTS Allstream), Primus Telecommunications Canada Inc., Rogers Communications Inc. (RCI), Vonage Canada Corp. (Vonage), and Xittel Telecommunications Inc. (collectively, the Competitors) filed comments opposing the review and vary applications. The record of this proceeding closed on 25 May 2007 with the Companies' reply comments.

7.

In Telecom Decision 2007-46, the Commission addressed the Companies' request to stay the implementation of the Orders. In that Decision, the Commission directed Bell Canada, SaskTel, and TCC to issue revised tariff pages for retail Ethernet access services. The Commission also, pursuant to section 50 of the Telecommunications Act (theAct), with the exception of determinations implemented by SaskTel and TCC, extended the time for the Companies to implement the Orders' determinations with respect to competitor Ethernet and ADSL services. In Telecom Decision 2007-46, the Commission also indicated that it intended to dispose of the Companies' review and vary applications by the end of August 2007.
 

Issues

8.

The Commission considers that parties' submissions on the review and vary applications raise the following issues:
  I. Should the Commission strike certain paragraphs from TCC's 4 May 2007 submission, as requested by Cybersurf?
  II. Did the Commission err in failing to apply the Policy Direction in the Orders?
  III. Should the Orders' disputed determinations be confirmed or rescinded in light of the Policy Direction?
 

Scope of review and vary applications

 

Background

9.

Prior to the issuance of the Ethernet Order, the Companies provided various competitor Ethernet services, which had received interim approval. Notably, all the Companies provided an Ethernet Transport Service that made available an access and transport component for a single bundled price. Bell Aliant also provided a fibre-based competitor Ethernet access service and Bell Canada provided a copper-based T1 competitor Ethernet access service. The Ethernet services provided by Bell Aliant, Bell Canada, SaskTel, and TCC on an interim basis are referred to in this Decision as interim Ethernet services.

10.

Prior to the issuance of the ADSL Orders, Bell Canada provided two competitor ADSL services, some components of which had received interim approval while other components had received final approval.3 Bell Aliant and TCC each provided two competitor ADSL services approved on an interim basis, while SaskTel provided one competitor ADSL service that received interim approval. The ADSL services provided by Bell Aliant, Bell Canada, SaskTel, and TCC on an interim basis are referred to in this Decision as interim ADSL services. While the ADSL services under consideration in this Decision are tariffed under different names by the Companies, they are referred to in this Decision as competitor ADSL services.4

11.

In this Decision, the services that were in place immediately prior to the issuance of the Orders are referred to collectively as interim services. These interim services consist of the Companies' competitor Ethernet and ADSL services and TCC's Asynchronous Transfer Mode Network-to-Network Interface (NNI) service that were in place on 24 January 2007.

12.

In the Orders, the Commission:
  a) approved on a final basis the retail Ethernet access services of Bell Canada, SaskTel, and TCC;5
  b) required the Companies to file tariffs for the following:
 
  • additional competitor Ethernet access and transport services as well as additional speed options for components for the interim Ethernet services (new Ethernet services);
 
  • additional speeds for competitor ADSL services that match any new speeds of their retail Internet services (matching ADSL services);
 
  • an additional 10 megabits per second (Mbps) speed for TCC's NNI service (TCC's 10 Mbps NNI service); and
  c) approved revised rates and terms for certain components of the Companies' interim services and, with one exception,6 approved these revised rates and terms, other interim services rates and terms, and the new services on a final basis.

13.

The determinations implemented by SaskTel and TCC, respectively are: the determinations with respect to SaskTel's ADSL service in paragraphs 54, 57, and 63 of Telecom Order 2007-24 that required SaskTel to issue revised tariff pages with respect to Letters of Authorization, termination charges, and proposed conditions of service; the direction to TCC in paragraph 57 of Telecom Order 2007-25 to issue revised tariff pages modifying the rates for its 3 Mbps speed Wholesale Internet ADSL Access service; and the direction in paragraph 63 of that Order to reduce the Central Office (CO) activation fee for TCC's Wholesale Internet ADSL service (ADSL CO activation fee) on a retroactive basis.

14.

In this Decision, "new services" refers to the Orders' determinations with respect to new Ethernet services, to matching ADSL services, and to TCC's 10 Mbps NNI service. New services also include determinations in the Ethernet Order that required the Companies to revise the description of the Ethernet CO Connecting Link service to allow interconnection between a co-located competitor and their competitor Ethernet access service. In addition, new services include determinations in the ADSL Orders that required the Companies to introduce a contract renewal term for any period, including on a month-to-month basis.

15.

In this Decision, "new rates" refers to determinations in the Orders that are the subject of the review and vary applications that required the Companies to revise interim service rates and approved Sasktel's existing interim ADSL service charge of $100 per access on a final basis. Determinations considered under new rates include those in the Orders that required the Companies to include month-to-month rates. New rates do not include the rate determinations implemented by TCC that are being considered in section III below.
 

Commission's analysis and determinations

16.

As noted above, Bell Canada et al. requested the rescission of the Ethernet Order and Telecom Orders 2007-21 and 2007-22 in their entirety and TCC requested the rescission of the Ethernet Order in its entirety.

17.

The Commission notes, however, that in their review and vary applications with respect to the Ethernet Order, Bell Canada et al. and TCC made submissions related only to new Ethernet services and new rates. They did not make submissions with respect to the other determinations in the Ethernet Order that approved on a final basis, without change, the interim services rates, terms, and conditions, including those that approved retail Ethernet access services on a final basis (other Ethernet determinations). Further, no party expressed support for rescinding those determinations. The Commission also notes that no comments were received regarding retail Ethernet access services during the proceeding that led to the Ethernet Order.

18.

The Commission also notes that in their review and vary applications with respect to Telecom Orders 2007-21 and 2007-22, Bell Canada et al. made submissions related only to new services and new rates, with the exception of the two determinations implemented by TCC, which are addressed in section III below. They did not submit arguments or evidence with respect to the other determinations in those Orders that approved on a final basis, without change, the interim ADSL service rates, terms, and conditions (other ADSL determinations). Further, no party expressed support for rescinding those determinations.

19.

In light of the above, the Commission considers that the review and vary applications relate only to the determinations associated with new services and new rates and the determinations implemented by TCC that are dealt with in section III below (the disputed determinations). The Commission therefore will not consider the Orders' other Ethernet determinations and other ADSL determinations (collectively, other determinations) in this Decision.

20.

Accordingly, final approval of the other determinations in the Orders, including SaskTel's non-disputed implemented determinations, remains in place. To the extent that the Companies have not already issued tariff pages reflecting these determinations, the Commission directs them to issue, within five days of the date of this Decision, tariff pages indicating that the rates, terms, and conditions associated with the other determinations are approved on a final basis.
 

I. Should the Commission strike certain paragraphs from TCC's 4 May 2007 submission as requested by Cybersurf?

21.

Cybersurf requested that the Commission strike from the record certain sections TCC's 4 May 2007 submission on the grounds that these sections included new arguments regarding the treatment of volume-based pricing that properly should have been included in TCC's initial application to review and vary Telecom Order 2007-25. Cybersurf argued that these sections should be struck from the record because TCC's submission being filed at such a late date was procedurally unfair to the respondents and had caused additional and unnecessary delays in the proceeding that would prejudice competitors. MTS Allstream supported Cybersurf's position.

22.

The Commission notes that, while the new arguments in TCC's 4 May 2007 submission were filed as comments on the other ILECs' applications, the process was amended such that the Competitors were given the opportunity both to comment on TCC's arguments and to amend their previously filed submissions. Therefore, the Commission considers that the Competitors were not procedurally disadvantaged as argued by Cybersurf.

23.

Accordingly, the Commission will not strike from the record the sections of TCC's submission identified by Cybersurf as new argument.
 

II. Did the Commission err in failing to apply the Policy Direction in the Orders?

 

Positions of parties

24.

The Companies and the Competitors disagreed on whether the Policy Direction applied to the Orders and also whether the Orders were consistent with the Policy Direction.

25.

The Companies submitted that the Commission had erred in law by not applying the Policy Direction in its deliberations leading to the Orders, as required by sections 11 and 47 of theAct. They argued that under section 11 of the Act, a policy direction of the Governor in Council was binding on the Commission on the day that it came into force, which in this case was 14 December 2006, well before the Orders were released.

26.

The Companies took the position that subsection 11(3)7 of the Act was a narrow exception to the requirement to apply the Policy Direction. According to the Companies, the word "matter" in subsection 11(3) should be given a broad interpretation. In their view, the matters dealt with in the tariff approval processes leading to the Orders were still "pending before the Commission" in the Essential Services proceeding and therefore, in the circumstances of this case, the exception in subsection 11(3) did not apply.

27.

The Companies also argued that in the Orders, the Commission had failed to take into account the following three provisions of the Policy Direction:
 
  • the direction in subparagraph 1(a)(i) and (ii) to place maximum reliance on market forces and to engage in minimal, efficient and proportionate regulation;
 
  • the direction in subparagraph 1(b)(i) to specify the telecommunications policy objective that is advanced when relying on regulation and demonstrate the compliance of these measures with the Order-in-Council; and
 
  • the presumption in subparagraph 1(c)(ii) of the Policy Direction that mandatory access should not be extended to new non-essential wholesale services.

28.

The Competitors disputed the Companies' view that the Policy Direction applied to the Orders. In their view, subsection 11(3) of the Act applied to exempt the Orders from the application of the Policy Direction since the record in the tariff approval processes that led to the Orders had closed less than a year before the Policy Direction came into force. They further argued that the matters in the tariff approval processes that led to the Orders involved the application of the current wholesale regulatory regime and thus were distinct from those under consideration in the Essential Services proceeding, which would be reviewing the regulatory regime for wholesale services and considering whether or not (and if so, how) to revise it. They submitted that the issues dealt with in the Orders were therefore not "pending before the Commission" and thus were not subject to the Policy Direction. The Competitors also argued that the Orders were not inconsistent with the Policy Direction, which did not, in their view, require the phasing out of mandated non-essential services.

29.

In reply, SaskTel argued that subsection 11(3) of the Act should not be interpreted to override the express wording of the Policy Direction and the other sections of the Act. In its view, subsection 11(3) was meant to apply in the event that a Policy Direction did not state whether it applied to matters pending before the Commission such that subsection 11(3) should be read as if it stated:
 

In the event the Order-in-Council does not state that it shall apply in respect of matters pending before the Commission, then an order made under section 8 does not apply in respect of a matter pending before the Commission on the day on which the order comes into force if:

 

(a) final submissions have been filed in respect of that matter; and

 

(b) less than one year has expired since the period for filing final submission ended.

30.

SaskTel argued that to interpret section 11 otherwise would require the Commission to act contrary to the express intent of the Governor in Council that the Policy Direction was to take effect on the day on which it comes into force.
 

Commission's analysis and determinations

31.

The Policy Direction sets out the following directives, which are relevant to the review and vary applications:
 

1. (a) .the Commission should

 

(i) rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives, and

 

(ii) when relying on regulation, use measures that are efficient and proportionate to their purpose and that interfere with the operation of competitive market forces to the minimum extent necessary to meet the policy objectives;

 

1. (b) the Commission, when relying on regulation, should use measures that satisfy the following criteria, namely, those that

 

(i) specify the telecommunications policy objective that is advanced by those measures and demonstrate their compliance with this Order,

 

(ii) if they are of an economic nature, neither deter economically efficient competitive entry into the market nor promote economically inefficient entry,

 

.

 

1. (c ) the Commission, to enable it to act in a more efficient, informed and timely manner, should adopt the following practices, namely,

 

.

 

(ii) with a view to increasing incentives for innovation and investment in and construction of competing telecommunications network facilities, to complete a review of its regulatory framework regarding mandated access to wholesale services, to determine the extent to which mandated access to wholesale services that are not essential services should be phased out and to determine the appropriate pricing of mandated services, which review should take into account the principles of technological and competitive neutrality, the potential for incumbents to exercise market power in the wholesale and retail markets for the service in the absence of mandated access to wholesale services, and the impediments faced by new and existing carriers seeking to develop competing network facilities, .

32.

Section 11 of theAct states:
 

(1) An order made under section 8 is binding on the Commission beginning on the day on which the order comes into force.

 

(2) Subject to subsection (3), an order made under section 8 shall, if it so provides, apply in respect of matters pending before the Commission on the day on which the order comes into force.

 

(3) An order made under section 8 does not apply in respect of a matter pending before the Commission on the day on which the order comes into force if:

 

(a) final submissions have been filed in respect of that matter; and

 

(b) less than one year has expired since the period for filing final submissions ended.

33.

The Commission notes the Companies' arguments to the effect that the matters addressed in the Orders are matters within the scope of the Essential Services proceeding and that, because final submissions have not been filed in respect of the matters pending in that proceeding, subsection 11(3) of the Act does not apply relative to the matters considered in the Orders. The Commission notes that in the Essential Services proceeding, the Commission will determine what changes should be made to the existing regulatory framework for competitor services. To this end, the Commission will, in relation to the Companies, review and determine, among other things, the definition of essential services, the pricing principles that should be applied to essential services, the regulatory regime that should apply to non-essential services, and how to manage the transition of non-essential services in any such regime. In contrast, the tariff approval processes leading to the Orders applied the existing definition of essential services and dealt with the specific tariff items that were to be approved and the rates to be charged for them based on current pricing principles. It did not deal with broad policy issues regarding essential services, which would have been inappropriate given the Commission's stated intention to consider such policy issues in the Essential Services proceeding. As indicated in the Orders, the regulatory status of the competitor Ethernet and ADSL services is within the scope of the Essential Services proceeding. This means that these services will be subject to whatever regulatory regime is established when a decision is issued in that proceeding. Accordingly, the Commission is of the view that the tariff matters considered in the Orders are quite separate from those under consideration in the Essential Services proceeding.

34.

The Commission finds that because final submissions in the tariff application processes leading to the Orders were filed less than a year before the Policy Direction came into force, subsection 11(3) operates to exempt the Orders from the Policy Direction.

35.

In regard to SaskTel's argument, the Commission notes that subsection 11(2) of theAct states that subject to subsection 11(3), an order made under section 8 shall, if it so provides, apply in respect of matters pending before the Commission on the day on which the order comes into force. The Commission notes that subsection 11(2) expressly provides that it is subject to subsection 11(3).

36.

Giving the words of subsections 11(2) and 11(3) their plain meaning, it is the Commission's view that an order under section 8 would apply to matters that are already pending before the Commission on the day the order comes into force if the order so states, but not if final submissions have been filed in respect of that matter and the deadline for doing so was less than one year before the order came into force.

37.

In light of the above, the Commission finds that it was correct not to apply the Policy Direction in the tariff approval processes that led to the Orders.

38.

The Commission notes, however, that the review and vary applications, which request rescission of all or part of the Orders, were filed after the Policy Direction came into force. The Commission further notes that it is required to comply with section 47 of the Act, which provides as follows:
 

The Commission shall exercise its powers and perform its duties under this Act and any special Act

 

(a) with a view to implementing the Canadian telecommunications policy objectives and ensuring that Canadian carriers provide telecommunications services and charge rates in accordance with section 27; and

 

(b) in accordance with any orders made by the Governor in Council under section 8 or any standards prescribed by the Minister under section 15.

39.

In regard to the issues raised in the review and vary applications, consistent with section 47, the Commission considers that the determinations that are the subject of these applications should be examined in light of whether they are consistent with the telecommunications policy objectives set out in sections 7 and 27 of the Act, and the Policy Direction.

40.

The Commission notes that the determinations under review in this proceeding stem from the exercise by the Commission of its powers under section 27 of the Act to ensure that rates are just and reasonable and not unjustly discriminatory. As recognized by the Courts, these powers, which are subject to the Policy Direction, are very broad.8
 

III. Should the Orders' disputed determinations be confirmed or rescinded in light of the Policy Direction?

41.

In this section, the Commission considers, in light of the Policy Direction:
 

1. Disputed determinations that have not been implemented, and

 

2. Disputed determinations implemented by TCC.

42.

The Commission notes that its findings set out below do not prejudge the outcome of any issue in the Essential Services proceeding.
 

1. Disputed determinations that have not been implemented

 

Positions of parties

43.

The Companies submitted that the Policy Direction represents a fundamental change in telecommunications regulatory policy and that the Orders contravened this Policy Direction.

44.

In general, the Companies submitted that the disputed determinations contravened the requirements in subparagraphs 1(a)(i) and (ii) of the Policy Direction for maximum reliance on market forces and minimally intrusive regulation. They submitted further that the Orders' requirements for new services that are non-essential contravened subparagraph 1(c)(ii) of the Policy Direction by mandating access to new services that are non-essential. Bell Canada et al. submitted that subparagraph 1(c)(ii) of the Policy Direction contains an express presumption that mandatory access to non-essential services should be phased out and that, therefore, the Commission should not require new non-essential services.TCC also submitted that, in view of the Essential Services proceeding, the effect of the Ethernet Order was to prejudge a number of issues in that proceeding.

45.

The Companies submitted further that there was a clear overlap between the issues considered in the Orders and those under consideration in the Essential Services proceeding. Bell Canada et al. submitted that failure to apply the Policy Direction would subject these services to three regulatory regimes over approximately a year and a half. TCC submitted that, in view of the Essential Services proceeding, it was imprudent and potentially wasteful to require additional competitor services while the associated issues were under review.

46.

Bell Canada et al. submitted that the Governor in Council intended the Commission to implement the changes required by the Policy Direction immediately and that the Orders' failure to do so frustrated the beneficial intent of the Policy Direction.

47.

In regard to the requirement that they provide a stand-alone Ethernet Transport Service, Bell Canada et al. submitted that the Commission had erred in applying reasoning from Telecom Decision 2005-6 in the Ethernet Order.

48.

SaskTel expressed concerns about the determinations in the Ethernet Order and Telecom Order 2007-24 that required it to reduce its 1000 Mbps Ethernet Transport Interface service charge and, its Ethernet CO connecting link rate and service charges, and to make final rather than change its ADSL access service charge approved on an interim basis in Telecom Order 2006-64. In this regard, SaskTel noted that it had filed cost evidence in the proceedings leading to those Orders, which in its view demonstrated that its costs for these functions exceeded the rates approved. SaskTel submitted that the Commission had erred in law and/or in fact in requiring a reduction in the above rates.

49.

TCC submitted that the Ethernet Order failed to deal with the basic issue of facilities-based competition and, contrary to the Policy Direction, required the ILECs to provide more non-essential services. TCC also submitted that the Ethernet Order, if allowed to stand, would damage facilities-based competition and competitively disadvantage TCC.

50.

In regard to determinations that required TCC to provide matching ADSL services, TCC submitted that the Commission had erred in law by failing to give notice of what TCC described as the conversion of the tariff proceeding that led to Telecom Order 2007-25 into what it characterized as a major policy proceeding to determine the future of unbundling and resale for ADSL services.

51.

The Competitors submitted that the Commission should confirm the Orders' requirements with respect to competitor services. The Competitors disagreed with the Companies' interpretation of the Policy Direction and with their submissions as to the application of the Policy Direction to the Orders.

52.

MTS Allstream, RCI, and Vonage submitted that the Companies' submissions were based on a presumption regarding the outcome of the Essential Services proceeding. MTS Allstream and RCI submitted further that the Policy Direction contained no presumption as to what services should be identified as essential services, and did not prejudge the outcome of that proceeding.In regard to subparagraph 1(c)(ii) of the Policy Direction, MTS Allstream, RCI, and Vonage submitted that the Companies had mischaracterized the Policy Direction as requiring that mandatory non-essential services be phased out. RCI submitted further that the Regulatory Impact Analysis Statement associated with the Policy Direction did not espouse the view that the Commission should no longer mandate access to ILEC services where such access was necessary for competition.

53.

RCI disagreed with Bell Canada et al.'s submission that the Orders frustrated the intent of the Governor in Council that the beneficial effects of the Policy Direction not be delayed. RCI submitted that this argument assumed that the Policy Direction contained a presumption as to whether Ethernet and Wholesale ADSL services should be found to be essential services or whether it required these services to be excluded. RCI argued that since there were no such presumptions in the Policy Direction, this argument must fail.

54.

MTS Allstream submitted that any common ground between the subject matter of the Orders and the issues under consideration in the Essential Services proceeding did not detract from the importance of resolving these issues in the interim period prior to the completion of the Essential Services proceeding. MTS Allstream submitted further that, contrary to the submission of Bell Canada et al., the reasoning from Telecom Decision 2005-6 applied to the stand-alone Ethernet Transport Service and was relevant to the Ethernet Order.

55.

MTS Allstream and RCI submitted that, contrary to TCC's submission, the Commission had considered facilities-based competition and constraints on the development of facilities-based competition in the Ethernet Order. In regard to Bell Canada et al.'s submission that the Commission's failure to apply the Policy Direction would subject the services in question to three regulatory regimes over approximately a year and a half, RCI submitted that this situation would not be inefficient and that any transition period for non-essential services found to be appropriate in the Essential Services proceeding would also apply to the services in question.

56.

In regard to SaskTel's submission regarding its ADSL service charge, MTS Allstream submitted that the Commission had clearly considered SaskTel's costing approach and costing principles in Telecom Order 2007-24. MTS Allstream, supported by Vonage, submitted further that as the Commission had broad discretion in determining rates and assessing the reasonableness of rates, the decision could not be characterized as a principled statement against the recovery of costs incurred by carriers.

57.

With respect to SaskTel's submission regarding its Ethernet Transport Interface charge and its Ethernet CO connecting link rate, MTS Allstream submitted that the Commission had explicitly considered SaskTel's cost data and determined that it did not justify SaskTel's proposed rates.

58.

In reply, the Companies submitted that the Competitors had not supported their positions. Bell Canada et al. submitted that the application of the Policy Direction to the Orders requested by Bell Canada et al. and the other ILECs did not prejudge the outcome of the Essential Services proceeding, but merely ensured that the rules applicable to the services under consideration would be consistent with the Policy Direction and the forthcoming rules applicable to other wholesale services. SaskTel submitted that considering the Orders in the context of the requirement to conduct a wholesale proceeding did not require pre-determination of the issues in the Essential Services proceeding.
 

Commission's analysis and determinations

59.

The Commission noted in Telecom Decision 2007-46 that the Companies' review and vary applications called into question the Commission's interpretation of the Policy Direction as well as the relevance of the current regulatory regime for the Ethernet and ADSL competitor services that are the subject of the review and vary applications, in light of the current Essential Services proceeding.

60.

The Commission notes parties' submissions regarding the interpretation of the Policy Direction as it applies to competitor services and, in particular, as it applies to the Orders' requirements for the provision of new services and new rates. Notably, the Companies and the Competitors disagreed on whether the Policy Direction meant that the Companies should be required to provide new services and new rates.

61.

As parties also noted, the regulatory framework for competitor services of the ILECs is currently before the Commission in the Essential Services proceeding. In that proceeding, the Commission is considering what changes should be made to the current competitor services framework and, consistent with subparagraph 1(c)(ii) of the Policy Direction, will make determinations on a number of issues. These include the extent to which mandated access to wholesale services that are not essential services should be phased out and pricing principles for mandated services. In doing so, the Commission will determine the regulatory approach to competitor services in a manner that is consistent with the directive in subparagraph 1(a)(i) of the Policy Direction to rely on market forces to the maximum extent feasible.

62.

In view of this, the Commission notes that its review of the Orders' determinations on new services and new rates is being undertaken in light of significant regulatory uncertainty with respect to the competitor services that are the subject of the review and vary applications.

63.

In considering the Policy Direction as it applies to the review and vary applications regarding the Orders' competitor services determinations, the Commission has therefore considered whether, in light of that environment and in the circumstances of this case, it would be more consistent with the Policy Direction to rescind or confirm the Orders' determinations with respect to new services and new rates.

64.

With the exception of the Ethernet CO connecting link service and its rates,the new services in question are non-essential services and the new rates relate to services that are non-essential under the current competitor services framework. The Commission notes that the regulatory status of all of these competitor services is under review in the Essential Services proceeding.

65.

The Commission also notes, with respect to new rates, that a number of its determinations in the Orders revised the Companies' interim services rates to introduce a month-to-month rate structure or eliminate the volume-based rate structure. The Commission notes that the definition of essential service and pricing principles for the services in question, including the appropriateness of mandated month-to-month rates and the approach to volume-based rate structures, are within the scope of the Essential Services proceeding.

66.

The Commission notes, moreover, that with the exception of SaskTel's ADSL service charge, if the Companies were required to implement new services and most of the new rates, they would need to modify, for example, billing and other systems related to the provision of these services and, for new services, develop rates for approval. The Commission notes that the time frame within which these activities would occur parallels the scheduled completion of the Essential Services proceeding.

67.

In finalizing the Companies' ADSL services in the ADSL Orders, the Commission notes that it considered the importance of providing comparable competitor ADSL access services across the ILECs' operating regions and similar rates for such services. Similarly, in finalizing the ILECs' Ethernet services, it determined that the ILECs should provide Ethernet services that were uniform nationally. The Commission notes, for example, that it took these considerations into account in revising certain rates for interim services, as well as in its decision to reduce SaskTel's ADSL service charge from $260 per access to $100 per access in Telecom Order 2006-64, in which the Commission noted that, among other things, the average such service charge for the other ILECs' most analogous service was under $100.

68.

In light of the significant uncertainty regarding the regulatory framework for competitor services provided by the Companies, the Commission finds that maintaining the new services and new rates approved on a final basis in the Orders would not be consistent with the requirement in subparagraph 1(a)(ii) of the Policy Direction that regulatory measures are to be efficient and proportionate to their purpose and interfere with the operation of competitive market forces to the minimum extent necessary. The Commission also finds that in the particular circumstances of this case, requiring the provision of comparable services across the ILEC operating regions and similar prices for those services is also not consistent with subparagraph 1(a)(ii). In regard to the disputed determinations that have not been implemented, the Commission finds that it would be consistent with the Policy Direction and, in particular, with subparagraph 1(a)(ii) of the Policy Direction, to return to the status quo in place on 24 January 2007, and to maintain the Ethernet and ADSL services that were available to competitors at that time. With regard to SaskTel's ADSL service charge, the Commission considers that it would be consistent with subparagraph 1(a)(ii) to approve a rate of $260 per access as SaskTel had originally proposed.

69.

In view of the above, the Commission finds that there is substantial doubt as to the ongoing correctness of its determinations with respect to new services and new rates that are the subject of the review and vary applications.

70.

Accordingly, the Commission rescinds the Orders' determinations with respect to new services and new rates that are the subject of the review and vary applications. Consequently, the Commission rescinds its direction to Bell Canada to show cause why volume-based rates should not be removed from the rate structure for its ADSL services or in the alternative, file proposed revised tariff pages that exclude volume-based rates.

71.

In regard to SaskTel's submission regarding its revised Ethernet CO connecting link rates, the Commission notes that the result of its determination to rescind new services is that rates for new competitor Ethernet access services can no longer recover the service introduction costs associated with SaskTel's Ethernet CO connecting link service. The Commission notes that this situation also applies with respect to the revised Ethernet CO connecting link rates approved for the other ILECs. The Commission considers that it would not be appropriate to preclude the Companies from recovering these service introduction costs. The Commission also notes that in the Ethernet Order, it required the Companies to introduce a month-to-month rate for the Ethernet CO connecting link service. Given the uncertainty with respect to the regulatory framework for competitor services, and consistent with its determinations above with respect to new rates, the Commission finds that there is substantial doubt as to the ongoing correctness of its determinations in the Ethernet Order with respect to the Companies' Ethernet CO connecting link rates. Accordingly, the Commission rescinds determinations in the Ethernet Order with respect to the Companies' Ethernet CO connecting link rates.

72.

The Commission notes that in the Ethernet Order, it maintained interim approval for Bell Aliant's competitor Ethernet access service. In the Ethernet Order, the Commission directed Bell Aliant to revise the definition of its competitor Ethernet access service to permit that service to connect to its Ethernet CO connecting link service. It also directed Bell Aliant to submit a tariff application for the access component of its competitor Ethernet access service with supporting cost studies.9

73.

The Commission notes that, in rescinding its determinations with respect to new services, it is rescinding the determination that required Bell Aliant to revise the description of its Ethernet CO Connecting Link service to allow interconnection between a co-located competitor and Bell Aliant's Ethernet access service. The Commission therefore finds that there is substantial doubt as to the ongoing correctness of the determination that required Bell Aliant to submit a revised tariff application for the access component of its competitor Ethernet access service with supporting cost studies. Accordingly, the Commission rescinds this determination.

74.

In view of the Commission's analysis and determinations in this section, it is not necessary to consider parties' other submissions with respect to the errors in law alleged by the Companies and other submissions with respect to new services and new rates.

75.

The Commission notes that in this Decision, it is rescinding determinations in the Orders with respect to new services and new rates. As a result, with respect to the rates, terms, and conditions that were disputed by the Companies, other than those dealt with in section 2 below, the interim rates, terms, and conditions in place on 24 January 2007, are restored. In the case of Sasktel's ADSL service charge, the revised rate of $260 per access is approved on an interim basis effective the date of this Decision.

76.

The Commission considers that if, at a future date, it were to revise the interim rates and terms with retroactive effect in light of its determinations in the Essential Services proceeding, an unacceptable level of regulatory uncertainty would result in the circumstances of this case. The Commission therefore does not expect,in the future, to revise on a retroactive basis rates and terms for the competitor Ethernet and ADSL services in place as a result of this Decision.
 

2. Disputed determinations implemented by TCC

77.

In this section the Commission considers, in light of the Policy Direction, the two disputed determinations in Telecom Order 2007-25 implemented by TCC: (a) the revised ADSL CO activation fee and (b) the revised 3 Mbps Wholesale Internet ADSL service rate.
 

(a) TCC's ADSL CO activation fee

 

Background

78.

In paragraph 63 of Telecom Order 2007-25, the Commission reduced the interim rate for TCC's ADSL CO Activation service from $60,000 to $30,000 and also directed TCC to apply the modification retroactively to any competitors that had previously paid the higher interim rate. The Commission notes that TCC requested that the Commission vary paragraph 63 of Telecom Order 2007-25 in a manner consistent with the Commission's decision regarding retroactive rate adjustments in the review and vary application filed by TCC on 30 October 2006 pertaining to Access Tandem, Direct Connection, and Co-location power service rates by either rescinding the application of the new ADSL CO activation fee on a retroactive basis or, in the alternative, permitting TCC to recover the difference between the interim rate and the final rate through the deferral account.
 

Positions of parties

79.

TCC submitted that the Commission had erred in law by ordering retroactive rebates for competitors that had ordered TCC's ADSL CO Activation service or, in the alternative, having ordered rebates, the Commission had committed a policy error by failing to allow TCC to recover the amount of the rebates through the deferral account. TCC further submitted that as a matter of law, the device of interim rates could not be used for a prolonged period, especially in a case such as this. In TCC's view, there was a considerable delay in making the interim rate for ADSL CO Activation service final and this delay was of the Commission's own making. TCC was of the view that there was no policy justification for ordering rebates when to do so would not affect past competition but would amount to a windfall for competitors.

80.

Cybersurf, MTS Allstream, and Vonage submitted that this ground of appeal by TCC should be dismissed. In support, they submitted that the prohibition against retrospective rate-making was subject to an exception where the Commission previously set rates on an interim basis and was revising these rates. Cybersurf submitted that ever since the Supreme Court of Canada's decision in Bell Canada v. Canada (Canadian Radio-Television and Telecommunications Commission)10 was issued, it has been clear that the Commission could, in a final determination, order a retrospective reduction of rates back to the effective date of an interim order setting the original rates.

81.

In reply, TCC argued that while the Supreme Court of Canada did, in Bell Canada v. Canada (Canadian Radio-Television and Telecommunications Commission), allow the Commission to retroactively set rates, this power was a limited one, meant to allay the prospect of a regulated entity's financial instability in the context of lengthy proceedings. In TCC's view, retroactive rate-setting causes financial instability and cannot increase reliance on past market forces.
 

Commission's analysis and determinations

82.

The Commission will consider TCC's submission with respect to ordering retroactive rebates for competitors that had ordered its ADSL CO Activation service in light of its statutory authority and the Policy Direction.
  (i) Statutory authority

83.

The Commission's power to make final rates effective the date they were approved on an interim basis is explicitly set out in subsection 61(2) of the Act, which reads as follows:
 

The Commission may make an interim decision and may make its final decision effective from the day on which the interim decision came into effect.

84.

The Commission notes in this regard that the above power is not stated to be subject to temporal limitations.

85.

To the extent that TCC is suggesting that the Commission may exercise its powers under subsection 61(2) solely to address the potential for financial instability of an applicant, the Commission considers that such an interpretation is unduly narrow.

86.

The Commission further notes that it is required by Parliament to ensure that at all times rates are just and reasonable and not unjustly discriminatory and that the Courts have recognized that the Commission has broad statutory powers to carry out Parliament's mandate in this respect. Absent the power to revisit interim rates retroactively, rates would remain in effect, notwithstanding that the Commission had found them not to be just and reasonable, and unjustly discriminatory. In the Commission's view, such a result would clearly be contrary to Parliament's intention that the Commission exercise its powers to ensure that at all times rates are just and reasonable and not unjustly discriminatory, and would be unlawful.

87.

The Commission also considers that given the interim nature of the rate in question, TCC was on notice that this rate could be adjusted retroactively to the date of the interim approval of the rate for the ADSL CO Activation service.

88.

With regard to TCC's submissions on the delay in making the interim rate final, the Commission notes that it gave interim approval to TCC's application to introduce Carrier Access Tariff item 226 - Wholesale Internet ADSL Service on 20 January 2006. Subsequently, the Commission received the following applications by TCC to modify its Wholesale Internet ADSL Service:
 
  • Tariff Notice 187B dated 19 May 2006,
 
  • Tariff Notice 229 dated 24 July 2006, and
 
  • Tariff Notice 232 dated 25 August 2006.

89.

The Commission notes that it approved these tariff applications on an interim basis, within fewer than 15 days after they were filed, on 31 May 2006, 2 August 2006, and 7 September 2006, respectively. The Commission gave final approval (with changes) to these and other ADSL-related tariff notices on 25 January 2007.

90.

In light of the above, the Commission is not persuaded by the submissions of TCC that it lacked jurisdiction to order the retroactive application of the final ADSL CO activation fee and the attendant rebates, subject to the Policy Direction.
(ii) Application of the Policy Direction

91.

In regard to subparagraph 1(a)(i) of the Policy Direction, the Commission notes that, in this proceeding, TCC did not dispute that its ADSL CO Activation service should be tariffed, nor did TCC dispute the level of the rate the Commission had approved on a final basis. The Commission further notes that there was no evidence before it in this proceeding to suggest that market forces are sufficient to ensure that the rate is just and reasonable for any time period, including a past period when the rate had interim approval. In view of this, the Commission considers that market forces cannot be relied on to achieve the telecommunications policy objectives set out in paragraph 93 below.

92.

In regard to subparagraph 1(a)(ii) of the Policy Direction, the Commission considers that given the interim nature of the rate in question, both TCC and competitors were on notice that this rate could be adjusted retroactively. The Commission considers that the rescission of the rebates prescribed in Telecom Order 2007-25 would give rise to market uncertainty. Moreover, the Commission considers that in the circumstances of this case, absent the requirement to pay rebates, competitors would have paid a rate that was not just and reasonable. In light of this, the Commission considers that the relief sought by TCC would not constitute efficient, timely, effective and proportionate regulation, and would not constitute minimal interference with the operation of competitive market forces as required by subparagraph 1(a)(ii) of the Policy Direction.

93.

In regard to subparagraph 1(b)(i) of the Policy Direction, the Commission is of the view that its determination regarding the retroactive application of the final rate for ADSL CO Activation service advances the following policy objectives in section 7 of the Act:
  • to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada [paragraph 7(b)];
  • to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective [paragraph 7(f)]; and
  • to respond to the economic and social requirements of users of telecommunications services [paragraph 7(h)].

94.

In regard to subparagraph 1(b)(ii) of the Policy Direction, in Telecom Order 2007-25 the Commission approved a rate for TCC's ADSL CO Activation service that was just and reasonable and set at a level that would neither deter economically efficient competitive entry nor promote economically inefficient entry. Accordingly, the Commission considers that confirming its determination would be consistent with this aspect of the Policy Direction.

95.

In light of the above, the Commission considers that maintaining the retroactive application of the ADSL CO activation fee is consistent with the Policy Direction. The Commission therefore considers that no substantial doubt exists as to the correctness of its determination in Telecom Order 2007-25 with respect to the retroactive application of TCC's revised ADSL CO activation fee. The Commission therefore denies TCC's request to vary this determination.
  (iii) Compensation for TCC from the deferral account with respect to retroactive rebates

96.

In regard to TCC's request that it be compensated from the deferral account for revenues foregone as a result of the Commission's determination to reduce its ADSL CO activation fee on a retroactive basis, the Commission notes that the final rate stemmed from non-costing considerations. The Commission considers that in the circumstances of this case, such relief would be consistent with the Policy Direction for the reasons that follow.

97.

The Commission is of the view that, as the deferral account is a regulatory mechanism, market forces cannot be relied on to provide compensation from this source. The Commission therefore considers that a determination in this Decision to compensate TCC from the deferral account would be consistent with subparagraph 1(a)(i) of the Policy Direction.

98.

In regard to subparagraph 1(a)(ii) of the Policy Direction, the Commission notes that the amount of deferral account compensation provided to TCC would not be significant and would interfere minimally with the operation of market forces. The Commission therefore considers that a determination in this Decision to compensate TCC from the deferral account would be consistent with subparagraph 1(a)(ii) of the Policy Direction.

99.

In regard to subparagraph 1(b)(i) of the Policy Direction, the Commission is of the view that its determination to permit TCC to receive deferral account compensation advances the same policy objectives as the Commission's determination to confirm the requirement to provide retroactive rebates.

100.

In regard to subparagraph 1(b)(ii) of the Policy Direction, the Commission considers that in the circumstances of this case, a determination to permit deferral account compensation would neither deter economically efficient competitive entry nor promote economically inefficient entry.

101.

Accordingly, the Commission approves TCC's request for compensation from the deferral account for revenues foregone as a result of the Commission's determination to retroactively reduce its ADSL CO activation fee.

(b) TCC's 3 Mbps ADSL service rate

102.

In this section the Commission considers, in light of the Policy Direction, the determination in paragraph 56 and direction in paragraph 57 of Telecom Order 2007-25 that TCC has implemented with respect to the 3 Mbps speed of its Wholesale Internet ADSL Access service by removing volume-based rates from its rate structure for that service speed.

Positions of parties

103.

TCC noted that the Commission had concluded in Telecom Order 2007-22 that Bell Canada's volume-based rate structure for its ADSL services was not appropriate and had directed Bell Canada to show cause why volume-based rates should not be removed from the rate structure for the access component of these services. TCC submitted that the Commission had directed TCC to modify its ADSL service rates by removing volume discounts without providing it with the opportunity to show cause why it should not do so.

104.

TCC requested that the Commission rescind its finding with respect to volume-based rates for TCC's ADSL services should it grant Bell Canada's review and vary application pertaining to Telecom Order 2007-22, or provide TCC with an opportunity to show cause as to why TCC need not remove volume-based rates for its ADSL services (TCC's show cause request). TCC also requested that if the Commission does determine that volume-based rates should be removed from Bell Canada's ADSL services, the Commission amend the effective date for TCC to remove volume-based rates to be the same as the effective date for Bell Canada.

105.

Cybersurf submitted that the difference in circumstances related to the consideration of volume-based rates for Bell Canada's and TCC's ADSL services justified the difference in the Commission's approach with respect to show cause. Cybersurf noted that the Bell Canada rates in question had received final approval in Telecom Order 2005-62, while the issue of TCC's volume-based rates was considered in the proceeding leading to Telecom Order 2007-25. Cybersurf submitted that, as a result, TCC had the opportunity in that proceeding to make submissions on the appropriateness of the volume-based rates in question.

Commission's analysis and determinations

106.

The Commission notes TCC's show cause request. The Commission also notes that, except for the 3 Mbps speed of TCC's Wholesale Internet ADSL Access service, in this Decision, the Commission is rescinding the determinations that required the Companies to remove volume discounts from their ADSL rate structures.

107.

In regard to TCC's show cause request as it relates to its 3 Mbps service rates, the Commission considers that, as Cybersurf submitted, the difference in status between Bell Canada's rates and TCC's rates was the reason Bell Canada was provided with the opportunity to show cause in Telecom Order 2007-22. The Commission notes that TCC had a full opportunity in the proceeding that led to Telecom Order 2007-25 to demonstrate why it should be permitted to retain volume-based rates. In view of this, the Commission denies TCC's show cause request.

108.

The Commission notes that TCC's review and vary application did not dispute that its 3 Mbps ADSL service should be tariffed, but rather has requested that the Commission rescind its determination in Telecom Order 2007-25 that TCC replace its volume-based rate structure with a single rate. In regard to subparagraph 1(a)(i) of the Policy Direction, the Commission notes that, as above in relation to TCC's ADSL CO activation fee, there was no evidence before it in this proceeding to suggest that market forces are sufficient to ensure that the volume-based rate is just and reasonable. Accordingly, the Commission considers that market forces cannot be relied on to achieve the telecommunications policy objectives set out at paragraph 110 below.

109.

In regard to subparagraph 1(a)(ii) of the Policy Direction, the Commission considers that rescission of the requirement to remove volume-based rates for TCC's 3 Mbps speed would give rise to market uncertainty. The Commission also considers that in the circumstances of this case, competitors would pay rates that are not just and reasonable. In light of this, the Commission considers that rescission of the requirement to remove volume-based rates for the 3 Mbps speed would not constitute efficient, timely, effective, and proportionate regulation, and would not constitute minimal interference with the operation of competitive market forces as required by subparagraph 1(a)(ii) of the Policy Direction.

110.

In regard to subparagraph 1(b)(i) of the Policy Direction, the Commission considers that confirming its determination in Telecom Order 2007-25 with respect to TCC's 3 Mbps ADSL service would advance the policy objectives in paragraphs 7(b), 7(f), and 7(h) of the Act.

111.

In regard to subparagraph 1(b)(ii) of the Policy Direction, the determination in Telecom Order 2007-25 with respect to TCC's 3 Mbps ADSL service approved rates that were just and reasonable and set at a level that would neither deter economically efficient competitive entry nor promote economically inefficient entry. Accordingly, the Commission considers that confirming that determination would be consistent with this aspect of the Policy Direction.

112.

The Commission therefore finds that there is no substantial doubt as to the ongoing correctness of the determination in paragraph 56 of Telecom Order 2007-25 as it relates to the 3 Mbps service speed. Accordingly, the Commission confirms the determination in paragraph 56 and the direction in paragraph 57 of Telecom Order 2007-25 with respect to TCC's 3 Mbps Wholesale Internet Access service.
  Secretary General
 

Related documents

 
  • Incumbent local exchange carriers' applications with respect to the implementation of Ethernet and ADSL Orders, Telecom Decision CRTC 2007-46, 27 June 2007
 
  • Ethernet services, Telecom Order CRTC 2007-20, 25 January 2007
 
  • Bell Aliant Regional Communications, Limited Partnership for services provided in the Atlantic provinces - ADSL Access Service and ADSL WAN Service,Telecom Order CRTC 2007-21, 25 January 2007
 
  • Bell Canada and Bell Aliant Regional Communications, Limited Partnership for services provided in Ontario and Quebec - Gateway Access Service and High Speed Access Service,Telecom Order CRTC 2007-22, 25 January 2007
 
  • Saskatchewan Telecommunications - Aggregated Asymmetric Digital Subscriber Line (ADSL) Service, Telecom Order CRTC 2007-24, 25 January 2007
 
  • TELUS Communications Company - Network-to-Network Interface Service, Wide Area Network ADSL Service, and Wholesale Internet ADSL Service,Telecom Order CRTC 2007-25, 25 January 2007
 
  • Review of regulatory framework for wholesale services and definition of essential service, Telecom Public Notice CRTC 2006-14, 9 November 2006 as amended by Telecom Public Notices CRTC 2006-14-1, 15 December 2006; 2006-14-2, 15 February 2007; 2006-14-3, 16 March 2007, and 2006-14-4, 20 March 2007
 
  • Saskatchewan Telecommunications - Aggregated Asymmetric Digital Subscriber Line (ADSL) Service, and Ethernet Access Services and Agreement, Telecom Order CRTC 2006-64, 27 March 2006
 
  • Bell Canada - Gateway Access Service and High Speed Access Service - Telecom Order CRTC 2005-62, 17 February 2005
 
  • Competitor Digital Network Services, Telecom Decision CRTC 2005-6, 3 February 2005
 
  • Ethernet services, Telecom Decision CRTC 2004-5, 27 January 2004
 
  • Regulatory framework for second price cap period, Telecom Decision CRTC 2002-34, 30 May 2002 as amended by Telecom Decision CRTC 2002-34-1, 15 July 2002
  This document is available in alternative form at upon request, and may also be examined in PDF format or in HTML at the following Internet site: www.crtc.gc.ca
  __________

Footnotes:

1  The Commission approved this rate on an interim basis in Telecom Order 2006‑64 and on a final basis in Telecom Order 2007‑24.

2   Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy Objectives, P.C. 2006‑1534, effective 14 December 2006.

3  In its request to review and vary Telecom Order 2007‑22, Bell Canada did not make submissions on the final approval granted to the tariff notices that were the subject of the Order but made submissions on the further ADSL service components that it was directed to provide.

4   TCC also provided an Asynchronous Transfer Mode Network‑to‑Network Interface service for use with its competitor Ethernet and ADSL services.

5  Bell Aliant did not provide a retail Ethernet access service.

6   The Commission did not grant final approval to the access component of Bell Aliant's competitor Ethernet service. In paragraphs 167 and 168 of Telecom Order 2007‑20, the Commission maintained its interim approval of this service component and required Bell Aliant to provide a cost study in support of rates for this service component.

7  Subsection 11(3) states: "An order made under section 8 does not apply in respect of a matter pending before the Commission on the day on which the order comes into force if (a) final submissions have been filed in respect of that matter; and (b) less than one year has expired since the period for filing final submissions ended."

8  The Commission notes that under subsection 27(5) of the Act, it may adopt any method or technique that it considers appropriate when establishing just and reasonable rates. The Commission considers that in determining the appropriateness of specific costs proposed by an ILEC, it may have regard to all relevant factors, to the extent that they pertain to the same service or to the same costing components, including previous costing studies and costing evidence submitted by the ILEC or other ILECs. Further, the Commission considers that pursuant to section 27, it has the power to make cost adjustments and to apply a different methodology than the methodology proposed by the ILEC in question. With respect to the relationship between section 27 of the Act and the Policy Direction, the Commission considers that the question of whether the Commission has lawfully carried out its duties under section 27 of the Act must necessarily be informed by whether or not its determinations comply with the Policy Direction.

9  Paragraphs 167 and 168 of the Ethernet Order.

10 [1989] 1 S.C.R. 1722

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