ARCHIVED - Letter

Ottawa, July 20, 2010

Our File: 8663-C12-201000653

BY E-MAIL

To:  Distribution List

Re:  Obligation to serve and other matters, Telecom Notice of Consultation CRTC 2010-43: Commission interrogatories

Pursuant to the procedures set out in Telecom Notice of Consultation CRTC 2010-43, attached are the Commission interrogatories associated with this proceeding.

Responses to these interrogatories are to be filed with the Commission, and served on all parties to this proceeding, by 3 August 2010.   Responses are to be received, and not merely sent, by this date.

Appendix 1 contains the distribution list.

Appendix 2 contains the interrogatories and to whom they are addressed.

Yours sincerely,

Original signed by:

John Macri
Director
Telecommunications Policy

As amended by Telecom Notice of Consultation CRTC 2010-43-2.

Appendix 1

Distribution List:

sdesy@actq.qc.ca; gcordeau@maskatel.qc.ca ; jpatry@telcourcelles.qc.ca; telstep@telstep.net; telvic@telvic.net; pallard@cooptel.qc.ca; rroy@telwarwick.qc.ca;j-fmathieu@telupton.qc.ca; alain.duhaime@sogetel.com; paul.frappier@telmilot.com; nantel@tellambton.net; regulatory@bell.aliant.ca; dreynard@kmts.biz; reglementa@telebec.com; Regulatory.Matters@corp.eastlink.ca; Lisa.marogna@cwct.ca; scoffey@dryden.ca; jonathan.holmes@ota.on.ca;m.baron@brktel.on.ca; regulatory@brucetelecom.com; Nicolet@puc.net;regulatory@execuling.com; a.schneider@hay.net; grubb@hurontel.on.ca; pdowns@nexicom.net; sachuter@tcc.on.ca; Roxboro@ontarioeast.net; pwightman@wightman.ca; rbanks@mornington.ca; wagrier@1000island.net; steve@wtccommunications.ca; tracy.cant@ontera.ca; jdowns@nexicomgroup.net; dave.baxter@guadro.net; gosfield@gosfieldtel.com; nfrontenac@kw.igs.net;barb@rideau.net; rob.olenick@tbaytel.com

Interrogatories to the small incumbent local exchange carriers (small ILECs)

Interrogatories to all small ILECs

1001. Several parties in this proceeding have proposed that the basic service objective be modified to include access to broadband Internet service.

a) If the coverage of broadband Internet services deployed by your company or your affiliates is less than 100% for any of the speeds offered on a retail basis (for example, if you offer a 25 Mbps service, but it is only available to 20% of your serving territory), describe any plans to achieve a greater level of coverage, including what level of coverage you anticipate, and which technology you will use to reach that goal.  Your response should include the timeframe to achieve this.

b) Provide any plans that either your company or your affiliates have to offer additional retail broadband Internet connection speeds, indicating the technology to be used as well as the proposed coverage for any such offer, during the next 5 years.

1002. The small ILECs have argued that there are a number of differences between them and the large ILECs and that a different local competition framework for the small ILECs is justified.  For example, at paragraph 54 of their 20 April 2010 submission, the OTA and TBayTel describe the “doughnut effect” as it relates to local competition in small ILEC operating territories.  The ACTQ also discusses the doughnut effect at paragraph 22 of its 20 April 2010 submission.

In contrast, TELUS Communications Company states at paragraph 144 of its 26 April 2010 submission that at the very least the twenty small ILECs with CLEC operations should be brought under the same regulatory framework as the other ILECs.

For each of the scenarios below, provide your views as to whether it would be appropriate for the Commission to permit local competition only within the core of a small ILEC’s exchange, with the core being defined as proposed by the small ILEC:

a) local competition is permitted pursuant to the same regulatory framework as is currently applicable for competition in the large ILEC territories;

Refer to Appendix 3 for a list of the small ILECs.

b) local competition is permitted pursuant to the current small ILEC framework, but only where the competitor is capable of serving at a minimum 50 percent of the number of residential network access services (NAS) in the core of the small ILEC exchange; and

c) local competition is permitted pursuant to the current small ILEC framework, but only where a small ILEC’s total NAS is equal to or greater than an established  threshold.  Comments should include a discussion of an appropriate threshold.

For each scenario, and in relation to both the portion of a small ILEC’s territory inside and outside the core, comments should include a discussion, but not necessarily be limited to, the following issues:

1. the appropriate mechanism for the recovery of the small ILECs’ costs of implementing local competition;
2. any requirement to maintain the obligation to serve;
3. the appropriate level of the local service subsidy in forborne and non-forborne exchanges;
4. the continued use of proxy costs to determine any local service subsidy; and
5. the eligibility of a competitor to receive, if available, a local service subsidy.

   1003. Various parties have suggested that HCSAs must be redefined because the “doughnut effect” results in under-recovery of subsidy requirements by ILECs due to NAS losses resulting from competition in lower-cost portions of HCSAs.

   a) Assume that the Commission adopts a subsidy regime in which a subsidy amount in a given HCSA was fixed and was not portable (i.e., the entire subsidy amount would be distributed to the ILEC, which has the obligation to serve).

   i. Discuss, with supporting rationale, of the appropriateness of such a regime.

   ii. If such a regime is deemed appropriate, provide a detailed description of how the subsidy amount in a given HCSA would be determined (for example, based on total NAS in an HCSA and the current per-NAS subsidy amount).

   iii. Explain whether such a regime would sufficiently address the “doughnut effect” and preclude the redefinition of HCSAs.

   b) Comment, with supporting rationale, assumptions and data, on the appropriateness and feasibility of using the following to define HCSAs for ILECs:

   i. municipal boundaries (for example, as proposed by OTA/TBayTel to define the core of an exchange in its response to interrogatory OTA/TBayTel(CRTC)20May10-102); and

   ii. a boundary analogous to SaskTel’s Base Rate Area proposal (as set out in SaskTel’s evidence, revised 15 June 2010).

   1004. If the company, including any of its affiliates, provides both wireline voice service and wireless voice services, does it market and package the two services such that customers perceive them as substitutes?  Your answer should address how wireless voice offerings either are, or are not, comparable to wireline voice services in terms of minutes of use and price.  Provide any documentation (e.g. economic studies) available to support the company’s view.

   1005. In its 20 April 2010 evidence, SaskTel stated that mobile wireless solutions did not meet the BSO at this time, due to inconsistent coverage and quality associated with mobile wireless service, particularly in rural areas.   However, in a letter dated 29 June 2010, the company indicated that it had ceased producing quantified performance measurements several years ago, and was unable to identify specific technical shortcomings with respect to mobile wireless technologies meeting the BSO.

   a) In the company’s view, is the quality of wireless voice service sufficient to satisfy the BSO?  Explain why or why not.  Your response should also address the markets (i.e., rural vs. urban) in which the services are offered.

   b) Does the company have objective criteria for measuring the quality of wireless voice service? If so, identify how wireless voice service quality is measured.

   1006. In response to interrogatory small ILEC(CRTC)20May10-101, the small ILECs identified the extent that a facilities-based service provider is present in the core of each exchange of their serving territories.

To what extent is a facilities-based service provider present outside the core of each exchange in your serving territory?  Identify the potential competitor(s) the percentage, if readily available, of each of residence and business NAS that could be served by the potential competitor(s).

Interrogatory to NorthernTel Limited Partnership

1007. At paragraphs 14 to 16 of its evidence dated 26 April 2010, the Ontario Telecommunications Association (OTA) stated the following:

“Depending on the magnitude of market share loss, the SILEC’s ability to continue to provide new services to the whole customer base will be greatly impaired...SILECs will not be able to afford to offer enhanced services in rural areas, rural rates might have to increase to guarantee revenue and recover cost... [T]hose outside [the cable company footprint] will not benefit and may see service levels drop and prices increase.”

Indicate, with supporting evidence, whether OTA’s statement reflects the current situation in the serving territory of NorthernTel Limited Partnership where local competition has already been implemented.

Interrogatory to TBayTel

1007. At paragraphs 14 to 16 of its evidence dated 26 April 2010, the Ontario Telecommunications Association (OTA) stated the following:

“Depending on the magnitude of market share loss, the SILEC’s ability to continue to provide new services to the whole customer base will be greatly impaired...SILECs will not be able to afford to offer enhanced services in rural areas, rural rates might have to increase to guarantee revenue and recover cost... [T]hose outside [the cable company footprint] will not benefit and may see service levels drop and prices increase.”

Indicate, with supporting evidence, whether OTA’s statement reflects the current situation in the serving territory of TBayTel where local competition has already been implemented.

Interrogatory to People’s Tel Limited Partnership

1007. At paragraphs 14 to 16 of its evidence dated 26 April 2010, the Ontario Telecommunications Association (OTA) stated the following:

“Depending on the magnitude of market share loss, the SILEC’s ability to continue to provide new services to the whole customer base will be greatly impaired...SILECs will not be able to afford to offer enhanced services in rural areas, rural rates might have to increase to guarantee revenue and recover cost... [T]hose outside [the cable company footprint] will not benefit and may see service levels drop and prices increase.”

Indicate, with supporting evidence, whether OTA’s statement reflects the current situation in the serving territory of People’s Tel Limited Partnership where local competition has already been implemented.

Appendix 3

Small ILECs

(listed by association / company which made a submission in this proceeding)

Association des Compagnies de Téléphone du Québec

Téléphone Guèvremont inc.
La Compagnie de Téléphone de Lambton inc.
Le Téléphone de St-Éphrem inc.
La Compagnie de Téléphone de St-Victor
CoopTel
La Cie de Téléphone de Courcelles inc.
La Compagnie de Téléphone Upton inc.
Sogetel inc.
Téléphone Milot inc.

Bell Aliant Regional Communications, Limited Partnership

KMTS
NorthernTel, Limited Partnership

Bragg Communications Inc.

Amtelecom Limited Partnership
People's Tel Limited Partnership

CityWest Telephone Corporation

Dryden Municipal Telephone System

Ontario Telecommunications Association

Brooke Telecom Co-operative Limited
Bruce Telecom
Cochrane Telecom Services
Execulink Telecom Inc.
Gosfield North Communications Co-operative Limited
Hay Communications Co-operative Limited
Huron Telecommunications Co-operative Limited

Dryden Municipal Telephone System did not make a submission in this proceeding.

Appendix 3

The Lansdowne Rural Telephone Company Limited
Mornington Communications Co-operative Limited
Nexicom Telecommunications Inc.
Nexicom Telephones Inc.
North Frontenac Telephone Corporation Limited
North Renfrew Telephone Company Limited
Ontera
Quadro Communications Co-operative Inc.
Roxborough Telephone Company Limited
Tuckersmith Communications Co-operative Limited
Westport Telephone Company Limited
Wightman Telecom Limited

TBayTel

Date modified:

2010-07-20