ARCHIVED - Telecom Order CRTC 2010-969

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Ottawa, 23 December 2010

Cogeco Cable Inc. – Third-party Internet access rates and usage-based billing charges

File numbers: Tariff Notices 24, 25, 26, 27, 27A, and 31

Introduction

1. The Commission received several applications from Cogeco Cable Inc. (Cogeco), filed between 18 February 2009 and 6 July 2010, in which the company requested approval of proposed monthly rates for particular third-party Internet access (TPIA) service speeds and/or proposed usage-based billing (UBB)-related tariff charges.

2. In the case of its applications for new TPIA service speed tiers that matched the speed tiers available for retail Internet service offerings,[1] Cogeco proposed monthly rates based on preliminary cost data. Cogeco submitted that it did not have sufficient usage data to allow production of a detailed cost study.

3. In all of its applications, Cogeco proposed UBB charges for its TPIA service options that matched the UBB charges on its corresponding retail Internet services, consistent with the Commission’s directives set out in Telecom Decision 2006-77.[2]

4. The Commission granted interim approval to the company’s proposed monthly rates for TPIA service speeds and UBB-related tariff charges.[3]

5. The public record of these proceedings is available on the Commission’s website at www.crtc.gc.ca under “Public Proceedings” or by using the file numbers provided above.

Parties’ comments on Cogeco’s applications

6. The Commission received comments on Tariff Notice 25[4] from Vianet Internet Solutions (Vianet) and one individual. The Commission notes that TekSavvy Solutions Inc. provided comments with respect to Tariff Notice 27A, and that those comments were addressed in Telecom Order 2009-696. No comments were received with respect to any of the other above-noted applications.

7. Vianet submitted that the Commission should reject Tariff Notice 25, arguing that a moratorium should be placed on the introduction of any new Internet traffic management practices pending a determination in the proceeding initiated by Telecom Public Notice 2008-19 regarding such practices.

Commission’ analysis and determinations

8. The Commission notes that it set out its determinations related to the introduction of Internet traffic management practices in Telecom Regulatory Policy 2009-657, and that Cogeco’s proposal constitutes an economic traffic management practice that is consistent with those determinations and permits Cogeco to manage traffic on its networks.[5]

9. Further, the Commission notes the argument made by the one individual that Cogeco had not provided sufficient evidence that its proposal would have the desired effect of managing the traffic of high-volume users without degrading the quality of TPIA services for all users. In this regard, the Commission notes that since the interim approval of the company’s application, no evidence has been provided to suggest that the implementation of the additional usage charges has had any significant impact on the quality of the TPIA services.

10. With respect to Cogeco’s proposed monthly rates for different speed tiers, the Commision concluded in Telecom Regulatory Policy 2010-632 that cable carriers should modify their TPIA services to provide competitors with an increased level of aggregation. Accordingly, the Commission directed the cable carriers to file new rates for the revised TPIA services for all speeds, reflecting a new cost structure based on an increased level of aggregation for the service. The Commission notes that cost studies based on the new cost structure have been filed and will be used to assess the revised TPIA services going forward. Therefore, the Commission considers that it is not warranted to require TPIA cost studies for the new proposed TPIA service speed tiers based on the former cost structure.

11. With respect to the UBB charges proposed by Cogeco, the Commission notes that, in Telecom Decision 2010-802, it determined that UBB charges for Bell Canada's and Bell Aliant Regional Communications, Limited Partnership's' Gateway Access Service would match the UBB charges on their corresponding retail Internet services, consistent with the cable carriers' TPIA pricing approach. The Commission further notes that it initiated a proceeding to examine whether the rates for the UBB components for the wholesale aggregated asynchronous digital subscriber line (ADSL) access services and TPIA services should be lower than the comparable retail UBB rates. As a result of that decision, the Commission considers that regulatory symmetry between UBB rating approaches for TPIA services and aggregated ADSL access services has been addressed.

Conclusion

12. In light of the above, the Commission considers that it is appropriate to finalize the existing rates for Cogeco’s applications. Accordingly, the Commission approves on a final basis Cogeco’s applications.

Secretary General

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