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Ottawa, July 20, 2010

Our File: 8663-C12-201000653  


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
Telecommunications Policy

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

Appendix 1

Distribution List:;;;;;;


Appendix 2 


Interrogatories to the following incumbent local exchange carriers (ILECs):

Bell Aliant Regional Communications, Limited Partnership (Bell Aliant), Télébec, Société en Commandite (Télébec), NorthernTel, Limited Partnership (NorthernTel), and KMTS, (collectively, the Bell Aliant Companies);

Interrogatories to Bell Aliant, Bell Canada, MTS Allstream, Northwestel, SaskTel, Télébec and TELUS

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;

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.

Interrogatories to Bell Aliant, Bell Canada, MTS Allstream, Northwestel, Télébec and TELUS

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.

Interrogatory to Bell Canada

1006. Refer to the response to interrogatory Bell Canada(CRTC)20May10-110.  Confirm that the estimates of toll margins are based on residence NAS in HCSAs and associated toll information.  If the margin estimates are not based on residence NAS in HCSAs and associated toll information, provide estimates of toll margins based on residence NAS in HCSAs and associated toll information.  Provide a detailed description of the methodology used in the development of these estimates, including all assumptions and relevant data.

Interrogatories to Bell Aliant

1006 .In its response to interrogatory Bell Aliant(CRTC)20May10-105, Bell Aliant states that it does not have a current cost margin analysis for toll service in HCSAs.  Further, Bell Aliant states that it has a significant cost/revenue shortfall relating to satellite transport to 24 Band G exchanges in Ontario and Québec because the “revenues from services flowing over these circuits or from the share of Bell Aliant's Access Tandem revenue directed toward the recovery of satellite costs” are less than the costs to lease the satellite facilities.  Bell Aliant proposes that the associated shortfall be recovered through the contribution mechanism.

a) Provide a list of all of the services provided by Bell Aliant on the satellite facilities in question, including business services, residential services, and public services.

b) Provide actual or estimated 2009 revenues associated with the use of the satellite facilities in question for each of the services provided in response to part a) above.  Provide a detailed description of how any estimate of revenues was developed.

Interrogatory to TELUS

1006. Refer to Tables 1 and 3 provided in response to interrogatory TELUS(CRTC)20May10-105.  Recalculate the estimates of the contribution / margin from optional local services, toll services and NAC in HCSAs using;

a) 2009 revenues rather than 2011 revenues, and

b) the average cost per feature derived from the five feature pack cost information provided in Table 2 of the economic evaluation report submitted in support of Tariff Notice No. 367 dated 13 July 2009.

Provide a detailed description of the methodology used in the development of these estimates, including all assumptions and relevant data.


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