ARCHIVED - Telecom Commission Letter - 8622-C12-200704321

Letter

Ottawa, 27 June 2007

File No.:   8622-C12-200704321

BY E-MAIL

Mr. Dennis Béland
Director, Regulatory Affairs
Telecommunications
Vidéotron ltée
465 McGill Street , 5 th Floor
Montreal, Quebec
H2Y 4A6

beland.dennis@quebecor.com
regaffairs@quebecor.com

Dear Mr. Béland:

Re:   Proceeding to consider the requirement for a network interconnection device when a local exchange carrier's network is disconnected from residential inside wire

This letter addresses the concerns of Quebecor Media Inc. (Quebecor) on behalf of its affiliate Vidéotron ltée (Vidéotron) regarding submissions filed by Bell Canada on 22 May 2007 .

On 15 March 2006 , Bell   Canada filed a Part VII application pursuant to the CRTC Telecommunications Rules of Procedure requesting that the Commission direct Vidéotron to discontinue certain installation practices at the premises of customers subscribing to Vidéotron's cable telephony service.

On 11 April 2006 , Bell Canada requested that the Commission suspend the process associated with the Part VII Application because the two companies had started negotiations aimed at resolving their issues.   At the request of both parties, the Commission subsequently granted several extensions to Vidéotron's answer to Bell Canada 's application in order to permit the parties to attempt to resolve the dispute through negotiation.

As a result of these negotiations, parties resolved a number of issues but were unable to agree on one outstanding issue.

By letter dated 6 December 2006 , Bell Canada confirmed that in a recent Commission staff assisted meditation the parties were unable to reach an agreement.   Bell Canada requested that the Commission re-activate the proceeding.

The Commission issued Proceeding to consider the requirement for a network interconnection device when the incumbent local exchange carrier's network is disconnected from residential inside wire , Telecom Public Notice CRTC 2007-3, 19 March 2007, as amended by Proceeding to consider the requirement for a network interconnection device when a local exchange carrier's network is disconnected from residential inside wire , Telecom Public Notice 2007-3-1, 11 May 2007 (PN 2007-3-1).

The record of the proceeding initiated by Bell Canada's 15 March 2006 application was made part of the record of the PN 2007-3-1 proceeding.

Pursuant to the procedure set out in PN 2007-3-1, Bell Aliant Regional Communications, Limited Partnership and Bell Canada , among other parties, filed written comments with respect to issues raised in the public notice.

In its letter of 1 June 2007 , Quebecor protested against what it considered to be Bell Canada 's repeated reference to and misrepresentation of settlement discussions between the two parties in 2006.   Quebecor stated that it had entered into without prejudice settlement negotiations with Bell Canada in order to avoid regulatory proceedings and had also agreed to without prejudice Commission mediation for the same reason.   It submitted that parties would be unwilling to pursue settlement discussions without protection from disclosure since to do so could severely prejudice their position should settlement talks break down.   Quebecor requested that the Commission indicate in writing that no agreement had been reached between the two parties with respect to the issues set out at paragraph 15 of Bell Canada 's submission and that it indicate that it would disregard the statements of Bell Canada on this point.

Quebecor also submitted that Bell 's characterization of the scope of this proceeding as relating only to the question of who should pay for the installation of NIDs was incorrect.   Quebecor requested that the Commission indicate in writing that Bell Canada's characterization of the issues was incorrect and that it would disregard the statements of Bell Canada on this point.

Quebecor was also concerned about comments and allegations made by Bell Canada regarding a document which Bell Canada had submitted to the Commission.   It alleged that Bell Canada misrepresented and made false allegations regarding a transcript of an examination of Quebecor personnel that took place in the course of civil proceedings between the two parties.   Quebecor also provided its view of the context of the examination and called for the Commission to censure Bell Canada for its behaviour.

Quebecor closed with a request that the Commission give no weight to Bell Canada 's assertions of damage to its network, stating that these allegations were vague, untested and unsubstantiated.

By letter dated   4 June 2007 , Roger Communications Inc. (Rogers)   stated that it supported the comments made by Quebecor regarding the disclosure of information from "without prejudice settlement talks".   Rogers expressed its concern about participation in Commission mediation processes if the content of without prejudice settlement talks were to be considered by the Commission.

By letter dated   5 June 2007 , Bragg Communications Inc., c.o.b. as Eastlink expressed its support for Quebecor's comments "regarding Bell 's disclosure of settlement negotiations and possible settlement offers being inappropriately referred to in the comments filed in PN 2007-3".

By letter dated 6 June 2007 , Bell Canada denied having disclosed any of the details of discussions at the meeting of 24 November 2006 and argued that the information disclosed by Bell Canada was central to the issues in the present proceeding.   Bell Canada also denied that it had misrepresented or made false allegations regarding the public transcription of the examination of Quebecor's witness that Bell Canada had submitted on 22 May 2007 .   Finally, Bell Canada expressed its concern about the effects of delay in the PN 2007-3-1 process.

Staff notes that Bell Canada released information about its settlement negotiations with Quebecor as early as its submissions of 11 September 2006 when it stated at paragraphs 24 and 25:

In instances in which a teladaptable device was not already installed, in their negotiations the parties agreed that as the Company installs such devices in all new installations and when it performs premises work, it would also be appropriate for Vidéotron to install teladaptable devices at the time cable telephone service is installed in premises already served by the Company.   The Company and Vidéotron, however, could not agree on the manner in which costs associated with such devices would be recovered.

Vidéotron proposed that it would assume the cost of labour to install the devices and Bell Canada should assume responsibility for the cost of the devices.   The Company's position is that it has been incurring all of the costs associated with the installation of teladaptable devices for over a decade and it continues to do so.   It would be appropriate, in the interests of customer convenience and competition, that Vidéotron similarly assume the cost associated with the installation of such devices.   Discussions between the parties broke down over this issue.

Staff further notes that Quebecor also disclosed the content of settlement discussions when, at paragraph 13 of its argument submitted 24 October 2006 , Quebecor stated:

-    [A]s part of the overall settlement of the dispute with Bell Canada , Quebecor was willing to agree to install NDDs between Bell Canada 's network and the CIW in those circumstances where they did not exist, provided that Bell Canada covered the cost of the device.   Quebecor agreed to cover the labour and related costs of the installation.

At paragraph 18 of its argument, Quebecor also stated:

In order to resolve the dispute initiated by Bell Canada , Quebecor was willing to cover the labour cost of installing an NDD but was not willing to supply the devices.   Bell Canada would not agree to cover the cost of the NDD and, as a result, the negotiations broke down.

Communications in furtherance of settlement

Commission staff considers that generally the content of communications in furtherance of settlement ought not to be disclosed without the consent of the party against whose interest the release of the information would be.   In the course of negotiation, parties may offer or agree to terms of settlement imposing a greater burden than are likely to be imposed by a court or tribunal because they want to "buy peace".   Without protection from disclosure, parties may well be reluctant to enter into settlement negotiations for fear that any concessions they might offer could be used to their detriment if no settlement agreement is reached.

With regard to the content of the settlement discussions, staff is of the view that, had Quebecor objected to the disclosure of the content of settlement discussions before it included such information in its own submissions to the Commission, it would have been justified in its objection.   However, by itself placing evidence before the Commission regarding the content of settlement discussions, Quebecor has waived its right to keep this information between itself and Bell Canada .   Parties wishing to avoid disclosure of communications in furtherance of settlement should not themselves release such information.   Further, to minimize the negative effects of such disclosure, parties should also raise their objections to such release by other parties at the earliest possible opportunity.

With respect to the issue of whether or not an agreement had been reached between Quebecor and Bell Canada regarding the issues raised in paragraph 15 of Bell Canada's submissions, staff notes that the PN 2007-3-1 proceeding will result in determinations that will apply to all LECs including Bell Canada and Quebecor.   The issues in this proceeding cannot therefore be determined by any agreement which may or may not have existed between Bell Canada and Quebecor.

Scope of the Proceeding

With regard to Quebecor's concern about Bell Canada's statement that the proceeding relates only to the question of who should pay for the installation of NIDs, staff notes that paragraph 8 of PN 2007-3-1 sets out the scope of this proceeding, including issues other than the one identified by Bell Canada.

Transcript of examination on affidavit

Staff is of the view that this is not an issue which needs to be determined on a preliminary basis.

Allegations of damage

Staff is of the view that this is not an issue which needs to be determined on a preliminary basis.

Yours sincerely, 

'Original signed by L. Fancy'

Lynne Fancy
Acting Director - Competition Implementation and Technology
Telecommunications

cc: Interested parties to the PN 2007-3-1

Interested parties to PN 2007-3-1:

regaffairs@quebecor.com ;  regulatory.affairs@telus.com ;  regulatory@bell.aliant.ca ;  fsnell@brucetelecom ;  ken.engelhart@rci.rogers.com ;  document.control@sasktel.sk.ca ;  natalie.macdonald@corp.eastlink.ca ;  Regulatory@sjrb.ca ;  telecom.regulatory@cogeco.com ;  bell.regulatory@bell.ca ;  iworkstation@mtsallstream.com ;  cataylor@cyberus.ca ;  dgmoss@mosstar.com ;  david.watt@rci.rogers.com ;  john.lange@open-it.ca ;  blackwell@giganomics.ca ;  rob.brown@citywest.ca ;  dmckeown@viewcom.ca ;  regulatory@lya.com ;  David.Wilkie@tbaytel.com ;  christian.tacit@cybersurf.com ;  benrovet@rogers.com ;  cedwards@ccsa.cable.ca ;  kstevens@execulink.com ;  reglementa@telebec.com ;  bsipprell@bmts.com ;  y.brunelle@telephonelabaie.qc.ca ;  andre.labrie@mcc.gouv.qc.ca ;  sdesy@actq.qc.ca ;