ARCHIVED - Letter

Ottawa, 12 August 2009

File No.: 8740-B2-200908569

           8740-B54-200908543

BY E- MAIL

Mr. Denis E. Henry

Vice-President

Regulatory and Government Affairs

Bell Aliant Regional Communications, Limited Partnership

160 Elgin Street, 19th Floor

Ottawa, Ontario   K2P 2C4

regulatory@bell.aliant.ca

Mr. David Palmer

Director - Regulatory Affairs

Bell Canada

160 Elgin Street, 19th Floor

Ottawa, Ontario   K2P 2C4

bell.regulatory@bell.ca

Re: Bell Aliant Tariff Notice 269 and Bell Canada Tariff Notice 7205 - Proposed unbundled local loop rate increases

Dear Sirs:

Pursuant to the procedure established in the Commission staff's 26 June 2009 letter, the Commission is in receipt of comments regarding Bell Aliant Tariff Notice 269 and Bell Canada Tariff Notice 7205 - Unbundled Local Loop Rates from Distributel Communications Limited, Globility Communications Corporation, MTS Allstream Inc., Primus Telecommunications Canada Inc., Rogers Communications Inc. and Execulink Telecom Inc. in conjunction with Bruce Telecom, Coop Tel, Huron Telecommunications Co-operative Limited, Mornington Communications Co-operative Limited, Nexicom Telecommunications Inc., the North Renfrew Telephone Company, Sogetel Inc., the Tuckersmith Communications Co- operative Limited, Wightman Telecom Limited and WTC Communications, and reply comments from Bell Aliant Regional Communications, Limited Partnership (Bell Aliant) and Bell Canada (collectively, the Bell companies).

In their reply comments, the Bell companies requested that the Commission make the current unbundled loop rates interim immediately with the final rates to be applied retroactively to that date in light of the significant difference between the Bell companies' proposed unbundled loop costs and those upon which the existing unbundled loop rates are based.

Given the significant change in the proposed unbundled loop costs and rates, Commission staff considers that it is necessary to validate the assumptions used in the Bell companies' cost study for the development of the prospective incremental costs before an assessment can be made on the merits of making the current unbundled loop rates interim. The Bell companies are to provide responses to the attached interrogatories by 4 September 2009.

Parties may file comments on the Bell companies' responses as they related to making the current unbundled loop rates interim by 18 September 2009. Reply comments from the Bell companies are to be filed by 30 September 2009.

Responses to interrogatories, comments and reply comments are to be filed with the Commission and served on all parties.

Documents to be filed and served in accordance with the above process are to be received, not merely sent, by the dates indicated. Copies of the documents should also be sent to thomas.hui@crtc.gc.ca

Once the Commission determines whether to make the current unbundled loop rates interim, the Commission staff will establish further process to review the Bell companies' unbundled loop tariff applications.

Yours sincerely,

Original signed by

Paul Godin

Director General

Competition, Costing & Tariffs

Telecommunications

c.c.:   Yvan Davidson, yvan.davidson@crtc.gc.ca ; Thomas Hui, thomas.hui@crtc.gc.ca

bell.regulatory@bell.ca ;  regulatoryaffairs@nwtel.ca ;  regulatory.affairs@telus.com ;  reglementa@telebec.com ;  document.control@sasktel.sk.ca ;  iworkstation@mtsallstream.com ;  regulatory@bell.aliant.ca ;  pdowns@nexicom.net ;  telstep@telstep.net ;  a.schneider@hay.net ;  alain.duhaime@sogetel.com ;  nantel@tellambton.net ;  j-fmathieu@telupton.qc.ca ;  gcordeau@maskatel.qc.ca ;  jpatry@telcourcelles.qc.ca ;  nfrontenac@kw.igs.net ;  sachuter@tcc.on.ca ;  tracy.cant@ontera.ca ;  rroy@telwarwick.qc.ca ;  pwightman@wightman.ca ;  telvic@telvic.net ;  dreynard@kmts.biz ;  scoffey@dryden.ca ;  paul.frappier@telmilot.com ;  m.baron@brktel.on.ca ;  regulatory@brucetelecom.com ;  lisa.marogna@citywest.ca ;  dave.baxter@quadro.net ;  rob.olenick@tbaytel.com ;  roxboro@ontarioeast.net ;  steve@wtccommunications.ca ;  rbanks@mornington.ca ;  wagrier@1000island.net ;  grubb@hurontel.on.ca ;  gosfield@gosfieldtel.com ;  deborah.shaffner@corp.eastlink.ca ;  regulatory@execulink.com ;  pllard@cooptel.qc.ca ;  jonathan.holmes@ota.on.ca ; michel.messier@cogeco.com ;  andrew@isptelecom.net ;  JohnP@mountaincable.on.ca ;  regaffairs@quebecor.com ;  documents@accesscomm.ca ;  ataylor@personainc.ca ;  Regulatory.Matters@corp.eastlink.ca ;  jboutros@globility.ca ;  regulatory@distributel.ca ;  regulatory@telnetcommunications.com ;  sbishay@iristel.com ;  cedric.tardif@derytelecom.ca ;  s.cloutier@axion.ca ;  tim@cabletv.ca ;  regulatory@vianet.ca ;  bazilewichr@westmancom.com ;  dmckeown@viewcom.ca ;  Regulatory@sjrb.ca ;  regulatory.aff@fidomobile.ca ;  rmccaffrey@seaside.ns.ca ;  reglementation@xittel.net ; lisagoetz@globalive.com ;  regulatory@primustel.ca ; rwi_gr@rci.rogers.com

Annex (1)

Annex

1.    Refer to the cost submission dated 2 June 2009 filed by Bell Aliant Regional Communications, Limited Partnership and Bell Canada (the Bell companies) in support of Bell Aliant Tariff Notice (TN) 269 and Bell Canada TN 7205 (the cost submission).

In paragraph 88 of Attachment A to the cost submission, the Bell companies describe three options for provisioning Competitive Local Exchange Carrier ( CLEC ) unbundled loops:

Option 1: Use existing copper facilities that often run parallel to the voice remote transmission path.

Option 2:      Use the voice remote technologies situated at the remote site itself, provided that terminal equipment in the central office (i.e., existing Central Office Terminals (COTs) or existing legacy channel banks) are available.

Option 3: Migrate the Bell companies' own end-customers from existing copper facilities to the remote technology (if such facilities are available) and re-assign copper facilities formerly serving Incumbent Local Exchange Carrier (ILEC) end-customers to provision CLEC unbundled loops.

a)    For each company, for each band, provide the total number of CLEC unbundled loops for year-end 2008 and the forecast year 2013 as assumed in the cost study associated with Option 3. Further identify the specific situations that would lead the Bell companies to rely on Option 3 rather than Option 1 to provide CLEC unbundled loops.

b)    Refer to the response to The Companies(CRTC)14Nov08-1 PN 2008-5 where the Bell companies provided their latest company-specific measured copper feeder and distribution cable working fill factors (WFFs). In light of these latest measured copper cable WFFs which indicate a significant amount of spare capacity in the Bell companies' existing copper facilities, explain why the Bell companies could not make use of spare copper facilities (Option 1) as opposed to migrating their own end-customers (Option 3) to provide an unbundled loop to a CLEC .

c)    With respect to the provisioning of unbundled loops to CLEC end-customers ( CLEC unbundled loops), confirm that the Bell companies would use one of the following two loop configurations:

i) All copper facilities loop configuration (i.e., using copper feeder and copper distribution cables between the central office and the end-customer); and

ii) Overlay network loop configuration (i.e., using COT / channel bank at the central office, transmission facilities between the central office and the remote site, voice remote technology situated at the remote site and copper distribution cables between the remote site and the end-customer).

Identify and explain any other loop configurations that the Bell companies may use to provide CLEC unbundled loops.

d)   For each company, for each band, provide the total number of CLEC unbundled loops associated with each of the loop configurations identified in response to part c) above for the actual in-service CLEC demand as at year-end 2008.

e)  With respect to the provisioning of unbundled loops to their own end-customers (ILEC unbundled loops), confirm that the Bell companies would use one of the following two loop configurations:

i) All copper facilities loop configuration (i.e., using copper feeder and copper distribution cables between the central office and the end-customer); and

ii) Voice remote loop configuration (i.e., using transmission facilities to connect between the Digital Multiplex System (DMS) switch at the central office and the remote site, voice remote technology situated at the remote site and copper distribution cables between the remote site and the end-customer).

Identify and explain any other loop configurations that the Bell companies may use to provide ILEC unbundled loops.

f)   For each company, for each band, provide the total number of ILEC unbundled loops associated with each of the loop configurations identified in response to part e) above for the actual in-service ILEC demand as at year-end 2008.

g)   Explain whether the Bell companies have denied CLEC requests for unbundled loops since the issuance of Telecom Decision 2001-238. If so, list the wire centres for each company, for each band, where the Bell companies have denied CLEC unbundled loops and identify the specific circumstances under which the Bell companies were unable to provide CLEC unbundled loops, with supporting rationale. Further identify any other potential situations where the Bell companies may deny an unbundled loop request from a CLEC going forward.

h)   With respect to CLEC unbundled loops that are provided using the all copper facilities loop configuration and where there is a voice remote transmission path running parallel to the copper facilities:

i) Provide the circumstances where the Bell companies would and would not replace the existing copper feeder cable at the end of its life. For the circumstances where the Bell companies would not replace the existing copper feeder cable, explain if and how the Bell companies would continue to provide existing CLEC unbundled loops, with rationale; and

ii) For each company, for each band, provide the total number of CLEC unbundled loops that are provided using the all copper facilities loop configuration where there is a voice remote transmission path running parallel to the copper facilities for the actual in-service CLEC demand as at year-end 2008 and for the CLEC demand forecast in the cost study for the year 2013.

i)   In paragraph 87 of Telecom Decision CRTC 97-8, the Commission stated that it "considers that, should the ILECs provide local exchange services that require a specific type of loop, that type of loop should be made available on an unbundled basis".

In paragraph 88 of Attachment A to the cost submission, the Bell companies indicated that "since 2006, the Companies no longer deploy Central Office Terminals (COTs) in order to provision unbundled loops to CLEC customers served by voice access remotes".

• i) For each company, for each band, provide the total number of ILEC unbundled loops that could not be provided to a CLEC (e.g., those provisioned by a voice remote without parallel copper facilities and without COT at the central office) for the actual in-service ILEC demand as at year-end 2008 and for the ILEC demand forecast in the cost study for the year 2013; and

• ii) Confirm that in the case of voice remote loops provided by the Bell companies to their end-customers as noted in i) above, the decision to no longer deploy COTs to provide unbundled loops to CLEC end-customers is contrary to Telecom Decision CRTC 97-8.

2.    Refer to Table 3 of Appendices 1 and 2 of Attachment 1 to the cost submission where the Bell companies forecast a decline in total demand for unbundled loops over the study period.

Further refer to the response to The Companies(CRTC)14Nov08-1 PN 2008-5 where the Bell companies provided their latest company-specific measured copper feeder and distribution cable WFFs which indicate a significant amount of spare capacity in the Bell companies' existing copper facilities.

a)   With respect to the Bell companies' unbundled loop cost study, confirm that the Bell companies have determined the incremental copper cable and Any Media Access System (AMAS) remote capital costs by using a capacity cost approach based on cost new as a proxy for cost of advancement for both the in-service demand at the beginning of the study and the incremental demand over the study period.

b)    In paragraph 31 of Attachment 1 to the cost submission, the Bell companies stated that "[t]he total percentage of loops served via remotes is based on the proportion of net growth in loops (year-end 2007 NAS / Year end 2006 NAS) provisioned using remotes relative to those provisioned using only copper, for each wire center". For each company, for each band, provide the percentage of each of CLEC and ILEC unbundled loops assumed to be served via remotes, and percentage of each of CLEC and ILEC unbundled loops assumed to be provisioned using only copper in the cost study.

c)   For each of the all copper facilities loop configurations identified in 1 c) i) and 1 e) i) above associated with CLEC unbundled loops and ILEC unbundled loops respectively, for each of copper feeder and copper distribution cable plant, explain why the Bell companies expect to incur any incremental copper cable capital costs (cost of advancement) in light of the significant amount of spare capacity in the Bell companies' existing copper facilities and the forecast decline in total demand for unbundled loops over the study period.

d)    For the overlay network loop configuration identified in 1 c) ii) above used to provide CLEC unbundled loops :

i) Explain why the Bell companies expect to incur any incremental copper distribution cable capital costs (cost of advancement) in light of the significant amount of spare capacity in the Bell companies' existing copper distribution facilities and the forecast decline in total demand for unbundled loops over the study period; and

ii) Confirm that if there are existing copper feeder facilities running parallel to the remote transmission path, the Bell companies would provide the CLEC unbundled loops using the copper facilities instead of the overlay network loop configuration. If not, explain why not with supporting rationale. If yes, explain why the Bell companies expect to incur any incremental AMAS capital costs (cost of advancement) associated with these CLEC unbundled loops in light of the significant amount of spare capacity in the Bell companies' existing copper feeder facilities used in providing the CLEC unbundled loop and the forecast decline in total demand for unbundled loops over the study period.

e)   For the voice remote loop configuration identified in 1 e) ii) above used to provide ILEC unbundled loops:

i) Explain why the Bell companies expect to incur any incremental copper distribution cable capital costs (cost of advancement) in light of the significant amount of spare capacity in the Bell companies' existing copper distribution facilities and the forecast decline in total demand for unbundled loops over the study period; and

ii) Explain why the Bell companies expect to incur any incremental AMAS remote capital costs (cost of advancement) in light of the forecast decline in total demand for unbundled loops over the study period.

f)    Provide an estimate of the percentage of Outside Plant Equipment Capital Causal to Demand identified in each Table 6 of each band of Appendices 1 and 2 of the Attachment 1 to the cost submission that is attributable to copper cable capital costs.

g)    Provide an estimate of the percentage of Transmission Equipment Capital Causal to Demand identified in each Table 6 of each band of Appendices 1 and 2 of the Attachment 1 to the cost submission that is attributable to AMAS remote capital costs.

3.   For each company, for each of the copper feeder cable, copper distribution cable and AMAS remote asset accounts, for each of the years 2006 to 2008, provide the dollar amount of retirements, additions, and plant in service. Further, provide a breakdown of the copper cable additions (or estimates of the percentage breakdown of the additions) into those that are:

• i) due to replacement of existing copper feeder cable facilities;

• ii) due to replacement of existing copper distribution cable facilities;

• iii) due to growth of copper feeder cable facilities; and

• iv) due to growth of copper distribution cable facilities. 

4.   Further to the responses to questions 2 c), 2 d), 2e) and 3 above, comment on the appropriateness of using the capacity cost approach based on cost new to determine the incremental capital costs associated with the use of existing copper cable facilities and AMAS remotes (cost of advancement) in light of the significant amount of spare capacity in the Bell companies' existing copper facilities and the forecast decline in total demand for unbundled loops over the study period. Provide the Bell companies' view on other costing approaches that could be used to determine the incremental costs associated with the use of existing copper facilities and AMAS remotes in light of the above-mentioned conditions.

Date modified:

2009-08-12