ARCHIVED - Letter

Ottawa, 4 February 2011

Our References:  8638-C12-201014620

BY E-MAIL

Mr. Michel Messier
Director, Regulatory Affairs
Telecommunications
Cogeco Cable Canada Inc.
telecom.regulatory@cogeco.com

Mr. Dennis Béland
Directeur principal, Affaires réglementaires
Télécommunications
Quebecor Media Inc.
regaffairs@quebecor.com

Mr. Kenneth G. Engelhart
Senior Vice President - Regulatory
Rogers Cable Communications Inc.
ken.engelhart@rci.rogers.com

Mr. Jean Brazeau
Senior Vice President,
Regulatory Affairs
Shaw Communications Inc.
Regulatory@sjrb.ca

Re:  Follow-up to Telecom Regulatory Policy CRTC 2010-632, Wholesale high-speed access services proceeding – Review of proposed tariffs

Dear Sirs:

In accordance with the revised procedure for this proceeding set out in the 1 February 2011 Commission staff letter, attached are Commission interrogatories directed to Cogeco Cable Inc., Quebecor Media Inc., on behalf of its affiliate Videotron Ltd., Rogers Communications Inc. and Shaw Communications Inc. (collectively, the cable carriers).

The cable carriers are to file the responses to their interrogatories with the Commission, serving a copy on all other parties, by 4 March 2011.

These responses are to be received, and not merely sent, by this date.

Yours sincerely,

Original signed by Yvan Davidson

for

Lynne Fancy
Director General
Competition, Costing and Tariffs
Telecommunications

cc:  Yvan Davidson, yvan.davidson@crtc.gc.ca
Tom Vilmansen, tom.vilmansen@crtc.gc.ca

Enclosure:  Distribution List

Attachment 1:  Interrogatories for Cogeco Cable Inc.
Attachment 2:  Interrogatories for Quebecor Media Inc., on behalf of its affiliate Videotron Ltd.
Attachment 3:  Interrogatories for Rogers Communications Inc.
Attachment 4:  Interrogatories for Shaw Communications Inc.

DISTRIBUTION LIST:

Bell Canada: bell.regulatory@bell.ca
Bell Aliant Regional Communications: regulatory@bell.aliant.ca
Saskatchewan Telecommunications: document.control@sasktel.sk.ca
MTS Allstream Inc.: iworkstation@mtsallstream.com
TELUS Communications : regulatory.affairs@telus.com
Northwestel Inc.: regulatoryaffairs@nwtel.ca
Télébec: reglementa@telebec.com
Eastlink Cable Systems: Regulatory.Matters@corp.eastlink.ca
Shaw Communications Inc.: Regulatory@sjrb.ca
Cybersurf Corp. : marcel.mercia@cybersurf.com
Quebec Coalition of Internet Service Providers (QCISP): reglementation@xittel.net
Distributel Communications Limited: regulatory@distributel.ca
OneConnect Services Inc.: lisagoetz@globalive.com
Primus Telecommunications Canada Inc.: regulatory@primustel.ca
Cogeco Cable Canada Inc.: telecom.regulatory@cogeco.com
Quebecor Média inc. Quebecor Media Inc.: regaffairs@quebecor.com
Rogers Communications Inc. : ken.engelhart@rci.rogers.com
Mark H. Goldberg & Associates Inc.: crtc@mhgoldberg.com
Ripnet Ltd.: eric@rothschildco.com
The Internet Centre Inc.: gfletcher@incentre.net
Nucleus Inc.: berzins@nucleus.com
McCarthy, Tetreault, Barrister & Solicitors: babramson@mccarthy.ca
Execulink Telecom Inc.: regulatory@execulink.com
Christian S. Tacit, Barrister & Solicitor: ctacit@tacitlaw.com
AGBriggs Consulting Inc.: abriggs@cogeco.ca
Next Dimension Communications Corporation: slavalevin@ethnicchannels.com
Les.Net (1996) Inc. : crtc@les.net
LCB Consulting. Inc.: LBC_Consulting@live.ca
Ministère de la Culture et des Communications: andre.labrie@mcccf.gouv.qc.ca
Open Source Solutions: bob.Allen@abccomm.com
TIA Telecommunications: ghariton@sympatico.ca
Wall Communications Inc.: lefebvre@rogers.com
Fraser Milner Casgrain, LLP: kirsten.embree@fmc-law.com
Bruce Buchanan : bruce@brucebuchanan.net
Ontario Telecommunications Association: jonathan.holmes@ota.on.ca
Christopher Taylor: cataylor@cyberus.ca
ABC Communications: chris.allen@abccomm.com
Kathleen Turnsek: regulatory@vianet.ca
The Consumer Groups: piac@piac.ca
Canadian Association of Internet Providers Association canadienne des fournisseurs Internet : tom.copeland@caip.ca
Union des consommateurs: hemond@consommateur.qc.ca
Giganomics Consulting Inc.: blackwell@giganomics.ca
James H Pratt Consulting Inc.: jhpratt@msn.com
EGATE Networks Inc.: crtc@paul.ca
Peace Region Internet Society: pris@pris.ca
Lemay-Yates Associates Inc.: regulatory@lya.com
TekSavvy Solutions Inc. : regulatory@teksavvy.com
View Communications Inc.: dmckeown@viewcom.ca
TBayTel : David.Wilkie@tbaytel.com
Fibernetics Corporation: regulatory@fibernetics.ca
Vaxination Informatique : jfmezei@vaxination.ca
Electronic Box Inc.: jp@electronicbox.net
TBayTel: stephen.scofich@tbaytel.com
British Columbia Broadband Association (BCBA): regulatory@bcba.ca
Liam Buckley: crtcmail@gmail.com
Province of British Columbia: telecom@gov.bc.ca
CNOC Regulatory: regulatory@cnoc.ca

Attachment 1

Interrogatories for Cogeco Cable Inc.

101. Refer to section 3.2.1 Forecast Assumptions in company’s 10 December 2010 Economic Evaluation report submitted in response to Cogeco(CRTC)15Sept10-101 where the company provided All-Company and TPIA demand.

Using the format of Tables 3.1 to 3.5 in the company’s 10 December 2010 Economic Evaluation report, provide revised proposed costs per end-user and rates assuming that the company’s retail end-user demand grows at a uniform rate of 4% per year over the study period and the TPIA end-user demand grows at a uniform rate per year over the study period such that the TPIA end-user market share relative to all-carrier end-user demand attains 5% in the last year of the study period. Provide the revised annual cable carrier and TPIA end-user demand under this scenario. Further discuss, with supporting rationale, changes in costing assumptions, if any, due to the changes in demand forecast under this scenario.

102. Refer to the tab named “Forecast” in attachment 2 of the response to Cogeco(CRTC)15Sept10-101 where the company provided the estimated percentage of new additions for company and TPIA end-users taking Ultimate 30 (in line numbers 45 and 108 respectively) and taking Ultimate 50 (in line numbers 46 and 109 respectively).

Using the format of Tables 3.1 to 3.5 in the company’s 10 December 2010 Economic Evaluation report, provide revised proposed costs per end-user and rates assuming that the estimated percent of new additions for company and TPIA taking Ultimate 30 (in line numbers 45 and 108 respectively) and taking Ultimate 50 (in line numbers 46 and 109 respectively) to be 50% less than the values used by the company for the last five years of the study period. (note:  the values used by the company for the first five years of the study period are not to be changed).

103. Refer to page 7, section 5.2-Downstream in attachment 3 of the response to Cogeco(CRTC)15Sept10-101 where the company provided the forecast of number of channels available per node for the study period. Provide a detailed explanation identifying the methodology, assumptions and source and vintage of data used to estimate the number of channels available per node. The response should provide actual number of channels available per node for the most recent historical year, specifying the year.

104. Refer to the response to Cogeco(CRTC)15Sept10-107 where the company submitted that the average bandwidth allocation per user (measured at peak) is measured and calculated every month and that other tiers are calculated using Simultaneous Usage Ratio and Bandwidth Usage ratio. The company also provided the Average Allocation and Equivalence Factor (vs Regular) for all TPIA speeds.

a. With respect to Cogeco’s estimation of average bandwidth allocation per user (measured at peak)

i. Identify the peak period noted above in terms of time of day and days of week. Further, justify why the sample is viewed to be representative of peak period traffic at the overall company level. Further, explain any changes that have occurred to the peak period over the past few years;

ii. Explain whether the peak period bandwidth usage is determined based on the highest bandwidth consumption over a specified time interval (specify the time interval) during the peak period or an average of the bandwidth consumption during the peak period. Further, explain the criteria used by the company to determine when a peak period bandwidth consumption measurement would cause it to increase provisioning capacity;

iii. Explain whether the peak period traffic is based only on retail Internet usage. If not, identify each service other than Internet on which the peak period traffic is based.

b. Provide the methodology, assumptions and source and vintage of data used to estimate Simultaneous Usage Ratio, Bandwidth Usage Ratio and Equivalence Factor. Further, explain the relationship between Simultaneous Usage Ratio, Bandwidth Usage Ratio and Equivalence Factor.

105. Refer to the response to Cogeco(CRTC)15Sept10-107 where the company provided the Average Allocation for all TPIA speeds. Using the format of Tables 3.1 to 3.5 in the company’s 10 December 2010 Economic Evaluation report, provide revised proposed costs per end-user and rates assuming that the first year per end-user traffic load is reduced by 20 percent. Further discuss, with supporting rationale, changes in costing assumptions, if any, due to the changes in end-user traffic load under this scenario.

106. Refer to page 2 of attachment 3 to the response to Cogeco(CRTC)15Sept10-101 where the company provided traffic growth rate for 10 years. Using the format of Tables 3.1 to 3.5 in the company’s 10 December 2010 Economic Evaluation report, provide revised proposed costs per end-user and rates assuming the growth in traffic levels for each year of the study period is 20 percent per year.

107. With respect to the company’s high-speed Internet and wholesale TPIA services:

a. Provide the number of wholesale and retail users, separately, for each of the years 2006 to 2010.

b. Provide the average retail Internet usage levels per end-user per month for each of the years 2006 to 2010.

c. For each of the company’s retail speeds, provide the average Internet usage level per end-user per month for the most recently available month, specifying the month.

d. Comment on the impact that the introduction of throttling (i.e. technical Internet traffic management practice (ITMP)) has had on the annual retail end-user usage growth rate, briefly describing the throttling measure(s) that was implemented.

e. Comment on the impact that the introduction of usage based billing (UBB) (i.e. economic ITMP) has had on the annual retail end-user usage growth rate, briefly describing UBB measure(s) that was implemented. Further, comment on the impact that the chosen usage cap per speed tier has had in curbing average usage per end-user to a level closer to the usage cap.

f. Comment on the impact that the introduction of any recent changes in the company’s retail usage based billing has had or is expected to have on the annual retail end-user usage growth rate.

g. Indicate whether the company intends to introduce additional ITMPs in its retail and wholesale services in the future, identifying the types of ITMPs it may implement. Further comment on the impact that the introduction of an additional ITMP could have on the assumed annual end-user usage growth rate.

108. Refer to page 2 to the response to Cogeco(CRTC)15Sept10-105 where the company provided CMTS cost per downstream port.

a. Identify the major components included in the development of CMTS cost and provide Installed First Cost (IFC) for each of these major components. Further, provide a comparison of the CMTS IFC, CMTS capacity, average working fill factor, and vintage and source of data used between the 2006 and 2010 Economic Evaluations. 

b. Explain how the CMTS IFC is converted to a cost per downstream port; the response should provide the methodology, assumptions and source and vintage of data used to develop each IFC, identifying the assumed capacity by major components, with supporting rationale.

109. Refer to page 2 to the response to Cogeco(CRTC)15Sept10-105 where the company provided optical transport cost per Mbps.

a. Identify the major components included in the development of optical transport cost and provide the Installed First Cost (IFC) for each of these major components. 

b. Explain how the IFC is converted to a cost per Mbps; the response should provide the methodology, assumptions and source and vintage of data used to develop cost per Mbps, identifying the assumed capacity by major components, with supporting rationale.

c. If the company identifies that it uses capital values that are based on depreciation or book value, comment on the appropriateness of using depreciation or net book value (instead of incremental capital expenditures) to estimate prospective incremental costs. Further, the response should explain how this approach captures prospective unit cost changes due to new supplier prices and changes in capacity over time.

110. Refer to the tab named “Network Costs” in attachment 1 of response to Cogeco(CRTC)15Sept10-101 where the company provided capital unit costs and capital percent factors to estimate the capital expenditures associated with optical node equipment (segmentation).

a. For each major capital resource, provide the methodology and assumptions used to estimate the capital unit cost, with supporting rationale. The response should provide the source and vintage of the capital unit cost and retrospective capital increase factors and productivity factors that were used to estimate the capital unit costs from the vintage year to the first year of the study period.

b. For each capital percent factor, provide the methodology and assumptions used to estimate the capital percent factor, with supporting rationale. The response should provide the source and vintage of the capital factors.

111. Refer to page 2 of response to Cogeco(CRTC)15Sept10-103 where the company submitted that MPLS is the recommended network technology architecture to provide for a centralized POI architecture and that the company would be dismantling the current number of POIs implemented within the company’s network. Further, the company provided the development costs associated with aggregation of traffic for the TPIA end-users.

a.Explain how the company has included the salvage value associated with the dismantled POIs in the cost study, if any. If so, provide the methodology and assumptions used to estimate these costs. If not, explain why not.

b. Confirm whether the MPLS technology is used for Cogeco’s retail services, such as retail Internet and IP voice.  If so, explain how the company has attributed the sharing of the routers between retail and wholesale service in estimating the development costs associated with aggregation of traffic for the TPIA end-users, with supporting rationale.

112. Refer to the tab named “Cap-Exp Resume” in attachment 1 of response to Cogeco(CRTC)15Sept10-101 where the company provided the Net Book Value (NBV) used, for each of the following equipment: Optical Node Fibre, Optical Node Equipment, DOCSIS CMTS, Test Equipment for HFC 2-Way and Racking space for equipment.

a. Explain whether the above Net Book Values (NBVs) used are based on the company’s booked NBV value for each of these assets, identifying any adjustments made to these NBVs, with supporting rationale. If not, provide the methodology and assumptions, with supporting rationale, used to derive these NBVs, explaining what they represent.

b. Using the format of Tables 3.1 to 3.5 in the company’s 10 December 2010 Economic Evaluation report, provide revised proposed costs per end-user and rates assuming that the capital costs for the in-service demand at the start of the study period is estimated by multiplying this demand by the capital unit cost for the following equipment: Optical Node Fibre, Optical Node Equipment, DOCSIS CMTS, Test Equipment for HFC 2 Way and Racking space. Under this scenario, for each equipment type provide the revised capital costs for the in-service demand at the start of the study and any associated replacement capital costs. Further discuss, with supporting rationale, changes in costing assumptions, if any, under this scenario.

113. With respect to transport costs associated with aggregation of competitor traffic, given that the company already has the necessary infrastructure in place to aggregate its own retail internet end-users traffic, explain and quantify what prospective incremental transport costs would be incurred for aggregating competitor TPIA traffic, with supporting rationale.

114. Refer to the tab named “Network Cost” in attachment 1 of response to Cogeco(CRTC)15Sept10-101 where the company provided the software maintenance expense percent factor, regular maintenance expense unit cost and other expense unit costs associated with each of DOCSIS CMTS equipment and Transport equipment (traffic aggregation) respectively, to estimate the associated maintenance expenses. Further refer to the tab named “Model” in attachment 2 of Cogeco(CRTC)15Sept10-101 where the company provided software maintenance expense percent factor, regular maintenance expense unit cost and other expense unit costs associated with Centralized POI router to estimate the associated maintenance expenses.

For each of CMTS equipment, Transport equipment (traffic aggregation) and Centralized POI router:

a. Provide a description of the major activities associated with each of software maintenance and regular maintenance. Confirm that there is no overlap between these two types of maintenances. 

b. Provide the methodology and assumptions used to derive the software maintenance expense percent factor, with supporting rationale. The response should identify the source and vintage for the data used. Also confirm that the regular maintenance expenses defined in response to part a) above are not used in the development of the software maintenance expense percent factor.

c. For each of maintenance and other expense unit cost, provide the methodology and assumptions used to estimate the expense unit cost, with supporting rationale. The response should provide the source and vintage of the unit cost data and retrospective expense increase factors and productivity factors that were used to estimate the expense unit costs from the vintage year to the first year of the study period.

115. Refer to page 10 of company’s 10 December 2010 Economic Evaluation report submitted in response to Cogeco(CRTC)15Sept10-101 where the company submitted that the two-way plant requires additional maintenance to prevent noise ingress (hardening). Also, refer to the tab named “Network Costs” in attachment 1 of response to Cogeco(CRTC)15Sept10-101 where the company provided the unit costs to estimate hardening maintenance expenses.

a. Explain, with supporting rationale, if and how the maintenance expenses to prevent noise ingress would be incurred whether or not the wholesale TPIA service is offered by the company; if these expenses could not be avoided, explain why the company proposed to include these maintenance expenses as prospective incremental costs  in the company’s 10 December 2010 Economic Evaluation.

b. If in response to part a) above, the maintenance expenses to prevent noise ingress are prospective incremental costs, provide a detailed explanation identifying the methodology, assumptions and source and vintage of data used to estimate the unit cost to estimate the hardening maintenance expenses; the response should also identify the source and vintage of the data used.

116. Refer to the tab named “Network Costs” in attachment 1 of response to Cogeco(CRTC)15Sept10-101 where the company provided maintenance expense unit cost and other expense unit costs associated with optical node equipment (segmentation). Provide the methodology and assumptions used to estimate the maintenance expense unit cost and each of the other expense unit cost, with supporting rationale. The response should provide the source and vintage of the unit cost data and retrospective expense increase factors and productivity factors that were used to estimate the expense unit costs from the vintage year to the first year of the study period.

117. Refer to page 10 of company’s 10 December 2010 Economic Evaluation report submitted in response to Cogeco(CRTC)15Sept10-101 where the company submitted that Customer Service Group (CSG) capital costs and expense costs do not vary with the level of demand forecasted in the cost study. Explain why the CSG costs are assumed to not vary with the level of demand and provide the actual number of CSG resources for the most recent historical year, specifying the year.

118. Refer to page 3, attachment 3 in the response to Cogeco(CRTC)15Sept10-101 where the company submitted that Bad Debt expense level that has been applied due to an increase of the bad debt noted by the company in the last years.  Provide justification to support the Bad Debt percentage assumed in the cost study; the response should provide the actual company’s bad debt percentage associated with its retail internet service for the most recent historical year, specifying the year.

119. Refer to page 1, attachment 3 in the response to Cogeco(CRTC)15Sept10-101 where the company provided the productivity improvement factor that it has applied to DOCSIS equipments, transport equipment and routers. 

a. With respect to the productivity improvement factor applied to DOCSIS equipments, transport equipment and routers, identify the changes in capacity and cost per Kbps over the last five years and comment on the appropriateness of using the productivity improvement factor proposed for these capital components.

b. Using the format of Tables 3.1 to 3.5 in the company’s 10 December 2010 Economic Evaluation report, provide revised proposed costs per end-user and rates assuming that the productivity improvement factor that is applied to DOCSIS equipments, transport equipment and routers to be 20 percent more than the productivity improvement factor proposed by the company.

120. Refer to the tab named “Cap-Exp Resume” in attachment 1 of response to Cogeco(CRTC)15Sept10-101.

a. Confirm that the present worth of demand forecast in line 8 should be calculated based on the mid-year discounting approach. If so, update attachment 1 to calculate the present worth of demand forecast using mid-year discount approach.  If not, explain why not.

b. Confirm that the cell E75 should reflect the present worth of revenues for all the years in the study period. If so, update attachment 1 to include the present worth of revenues for all the years in the study period. If not, explain why not.

c. Confirm that the income taxes calculated in lines 51 and 120 should use revenues without applying the percent mark-up. If so, update attachment 1 to calculate income taxes using revenues without applying the mark-up. If not explain why not.

d. Confirm that the proposed rates provided in the tabs named “Table 1 Costing-Lite”, “Table 2 - Costing-Lite plus”, “Table 3 - Tariff-regular”, “Table 4 - Costing-Ultimate 30” and “Table 5 - Costing-Ultimate 50” should reflect the mark-up provided by the company on page 7, section 3.1.1 Study Assumptions of company’s 10 December 2010 Economic Evaluation report. If so, update attachment 1 such that the above referenced tabs reflect the appropriate mark-up. If not, explain why not.

e. Using the format of Tables 3.1 to 3.5 in the company’s 10 December 2010 Economic Evaluation report, provide revised proposed costs per end-user and rates, using the updated attachment 1 which incorporates all the necessary modifications in response to parts a) to d) above.

121. Refer to the cell M244 in tab named “Model” in attachment 2 of response to Cogeco(CRTC)15Sept10-101 where all the costs associated with Information system & other costs are summarized.

a. Confirm that the cell M244 should include MPLS Configuration & POI costs.  If not, update attachment 2 to remove the MPLS Configration & POI costs. If so, explain why the same MPLS Configration & POI costs are included in two categories namely Information system & other costs category and in MPLS Configration & POI category.

b. Using the format of Tables 3.1 to 3.5 in the company’s 10 December 2010 Economic Evaluation report, provide revised proposed costs per end-user and rates using the updated attachment 2 in response to part a) above.

122. With respect to the proposed TPIA per end-user monthly costs, provide the cost elements that are driven by TPIA access demand and the cost elements that are driven by TPIA traffic demand. Further, with respect to the TPIA cost elements that are driven by TPIA traffic demand, provide the cost per end-user per GB of usage broken down by each of the major resource components.

123. With respect to the company’s current retail broadband services complete the attached table.

Attachment 2

Interrogatories for Quebecor Media Inc., on behalf of its affiliate Videotron Ltd

101. Refer to the response to QMI(CRTC)15Sept10-104 TPIA where the company provided All-Company end-users and TPIA end-users demand.

Using the format of Tables 1 to 8 in the company’s Third Party Internet Access Updated Economic Evaluation revised 14 December 2010, provide revised proposed costs per end-user and rates assuming that the company’s retail end-user demand grows at a uniform rate of 4% per year over the study period and the TPIA end-user demand grows at a uniform rate per year over the study period such that the TPIA end-user market share relative to all-carrier end-user demand attains 5% in the last year of the study period. Provide the revised annual cable carrier and TPIA end-user demand under this scenario. Further discuss, with supporting rationale, changes in costing assumptions, if any, due to the changes in demand forecast under this scenario.

102. Refer to the response to QMI(CRTC)15 Sept – 107 where Videotron submitted that it measured the average weekly traffic for each of its head-ends.

a. Identify i) the time periods or periods in terms of time of day and days in week, and ii) the number of measurements used to estimate the average weekly traffic per head-end. Further, justify why the sample is viewed to be representative of peak period traffic at the overall company level; describe any changes that have occurred to average traffic per-head end over the past few years.

b. Confirm that the company measures the average weekly traffic for each speed tier. If not, provide the methodology and assumptions along with supporting rationale used to estimate the average weekly traffic per-end user for each speed tier.

103. Refer to the response to QMI(CRTC)15 Sept – 107 where Videotron submitted that it applies a peak-to-average ratio to its average weekly traffic to estimate the peak 5-minute traffic.

a. Identify i) the time periods or periods in terms time of day and days in week/month, and ii) the number of measurements used to estimate the peak traffic component of its peak-to-average ratio. Further, justify why the sample is viewed to be representative of peak period traffic at the overall company level; describe any changes that have occurred to peak periods over the past few years.

b. Explain whether the peak period bandwidth usage is determined based on the highest bandwidth consumption over a specified time interval (specify the time interval) during a peak period or an average of the bandwidth consumption during the peak period.

c. Identify i) the time periods or periods in terms of time of day and days in week/month, and  ii) number of measurements used to estimate the average traffic component of its peak-to-average ratio. Further, justify why the sample is viewed to be representative of average traffic at the overall company level; describe any changes that have occurred to average traffic over the past few years.

d. Explain whether the peak-to-average ratio is based only on retail Internet usage. If not, identify each service other than Internet which the peak-to average ratio is based on.

e. Provide the company’s historical peak-to-average ratios for the most recent historical year, specifying the year.

104. Refer to the response to QMI(CRTC)15Sept10-107 TPIA where the company provided rates of traffic increases assumed for the duration of the TPIA study period.

Using the format of Tables 1 to 8 in the company’s revised 14 December 2010 Economic Evaluation, provide revised proposed costs per end-user and rates assuming the growth in traffic levels for each year of the study period is 20 percent per year. 

105. Refer to the response to QMI(CRTC)15Sept10-107 TPIA where the company provided average peak downstream traffic per end-user in (kbps) assumed during the study period. Using the format of Table 1 to 8 in the company’s revised 14 December 2010 Economic Evaluation, provide revised proposed costs per end-user and rates assuming that the first year per end-user traffic load is reduced by 20 percent. Further discuss, with supporting rationale, changes in costing assumptions, if any, due to the changes in end-user traffic load under this scenario.

106. With respect to the company’s high-speed Internet and wholesale TPIA services:

a. Provide the number of wholesale and retail users, separately, for each of the years 2006 to 2010.

b. Provide the average retail Internet usage levels per end-user per month for each of the years 2006 to 2010.

c. For each of the company’s retail speeds, provide the average Internet usage level per end-user per month for the most recently available month, specifying the month.

d. Comment on the impact that the introduction of throttling (i.e. technical Internet traffic management practice (ITMP)) has had on the annual retail end-user usage growth rate, briefly describing the throttling measure(s) that was implemented.

e. Comment on the impact that the introduction of usage based billing (UBB) (i.e. economic ITMP) has had on the annual retail end-user usage growth rate, briefly describing UBB measure(s) that was implemented. Further, comment on the impact that the chosen usage cap per speed tier has had in curbing average usage per end-user to a level closer to the usage cap

f. Comment on the impact that the introduction of any recent changes in the company’s retail usage based billing has had or is expected to have on the annual retail end-user usage growth rate.

g. Indicate whether the company intends to introduce additional ITMPs in its retail and wholesale services in the future, identifying the types of ITMPs it may implement. Further comment on the impact that the introduction of an additional ITMP could have on the assumed annual end-user usage growth rate.

107. Refer to tab named “Model ING” in attachment 1 of response to QMI(CRTC)15Sept10-101 TPIA, where the company provided breakdown of the TPIA costs:

a. With respect to values provided in columns G and M;

i. Confirm whether the values are Net Book Values (NBVs). If so, explain whether these values are based on the company’s booked NBV value for each of these assets, identifying any adjustments made to these NBVs, with supporting rationale. If not, provide the methodology and assumptions, with supporting rationale, used to derive these values, explaining what they represent;

ii. if the company identifies that it uses capital values that are based on depreciation or book value, comment on the appropriateness of using depreciation or net book value (instead of incremental capital expenditures) to estimate prospective incremental costs. Further, the response should explain how this approach captures prospective unit cost changes due to new supplier prices and changes in capacity over time;

iii. Using the format of Tables 1 to 8 in the company’s revised 14 December 2010 Economic Evaluation report provide revised proposed costs per end-user and rates assuming that the capital costs for the in‑service demand at the start of the study period is estimated by multiplying this demand by the capital unit cost. Under this scenario, for each equipment type provide the revised capital costs for the in-service demand at the start of the study and any associated replacement capital costs. Further discuss, with supporting rationale, changes in costing assumptions, if any, under this scenario.

b. For each of the cash flows identified under Major Modernization/Node Segmentation and IP Layer – Variable;

i. confirm that the capital unit costs provided in response to QMI(CRTC)15Sept10-105 TPIA were used; if not, provide the capital unit costs that were used to estimate the capital cash flows;

ii. for each of the capital unit costs used to estimate the capital cash flows, provide the methodology and assumptions used to estimate capital unit costs. The response should provide the source and vintage of the capital unit cost and retrospective capital increase factors and productivity factors that were used to estimate the capital unit costs from the vintage year to the first year of the study period;

iii. provide the methodology and assumptions to estimate each of the cost drivers used to estimate capital cash flows, with supporting rationale (e.g. explaining how peak downstream traffic per end-user was used to develop the number of segments required); further provide the value of each cost driver, specifying the name. Also, provide the calculation and all the relevant data (such as, capital unit costs/factors) used to calculate the capital cash flow in an Excel spreadsheet format.

108. Refer to the response of QMI(CRTC)15Sept10-105 TPIA where the company provided installed first costs for IP layer. Identify the major components included in the development of CMTS cost and provide Installed First Cost (IFC) for each of these major components. Further, provide a comparison of the CMTS IFC, CMTS capacity, average working fill factor, and vintage and source of data used between the 2006 and 2010 Economic Evaluations.

109. Refer to the response to (CRTC)15Sept10-103 TPIA where the company submitted that ongoing backhaul costs to Videotron’s centralized POI are now embedded in the proposed monthly service rates.

a. Provide the major capital and expense costs that have been included in the ongoing backhaul cost per end-user.

b. For each of the major capital and expense costs identified in response to part a) above, provide the methodology and assumptions used, with supporting rationale, in estimating the costs. The response should provide the source and vintage of the unit cost data used.

c. For each of the major capital and expense costs provided in response to part a) above;

i. indicate under which line item(s) in Tables 1 to 8 of the company’s updated Economic Evaluation study report these costs are included; and

ii. provide the present worth and cost per end-user per month.

110. With respect to transport costs associated with aggregation of competitor traffic, given that the company already has the necessary infrastructure in place to aggregate its own retail internet end-users traffic, explain and quantify what prospective incremental transport costs would be incurred for aggregating competitor TPIA traffic, with supporting rationale.

111. Refer to tab “Model ING” in attachment 1 to the response to QMI(CRTC)15Sept10-101 TPIA. 

a description of all the components under the maintenance category.

b. Justify each of the percentage factors used to derive the various maintenance expenses and explain how each of these percentage factors relate to the information provided in parts c) and d) of the response to QMI(CRTC)15Sept2010-108 TPIA.

c. Explain, with supporting rationale, if and how the  HFC maintenance expenses would be incurred whether or not the wholesale TPIA service is offered by the company; if these expenses could not be avoided, explain why the company proposed to include the HFC maintenance expenses as prospective incremental costs  in the company’s 14 December 2010 Economic Evaluation.

112. Refer to section 4.4 Phase II costs in the company’s Third Party Internet Access Updated Economic Evaluation revised 14 December 2010 where the company submitted that Customer Service Group (CSG) costs have been included in the cost study. Provide the methodology and assumptions used to estimate the CSG costs. The response should provide the number of CSG resources, with supporting rationale and the associated labour unit costs. Further provide the actual number of CSG resources for the most recent historical year, specifying the year.

113. Refer to page 2 of the response to QMI(CRTC)15Sept10-108 TPIA where the company submitted the Bad Debt percentage used in the company’s Economic Evaluation. Provide justification to support the Bad Debt percentage assumed in the cost study; the response should provide the actual company’s bad debt percentage associated with its retail internet service for the most recent historical year, specifying the year.

114. Refer to part e) of the response to QMI (CRTC)15Sept10-108 TPIA where the company provided Technical Service and Assistance per end-user cost for both retail and TPIA. For each of the company’s retail and wholesale operations, provide a breakdown of the major activities and their respective per end-user cost associated with Technical Service and Assistance. Further, justify with supporting rationale, the major differences between the retail and TPIA activities and their respective per end-user cost.

115. Refer to the response to QMI(CRTC)15Sept10-105 TPIA where the company provided equipment lives.

a. Using the format of Tables 1 to 8 in the company’s Third Party Internet Access Updated Economic Evaluation revised 14 December 2010 provide revised proposed costs per end-user and rates assuming that the economic life estimate of CMTS and routers are 7 years.

b. Further comment on the appropriateness of using economic life estimates of 7 years for CMTS and routers.

116. Refer to tab named “Summary” in attachment 1 of response to QMI(CRTC)15Sept10-101 TPIA where the company provided the productivity factors for CMTS, routers, and others respectively. 

a. Confirm whether the productivity factor associated with the category “others” is applied to expense cash flows. If not explain why not?

b. With respect to productivity factor for CMTS and routers, identify the changes in capacity and cost per Kbps over the last five years and comment on the appropriateness of using the productivity improvement factor proposed for these capital components.

c. Using the format of Tables 1 to 8 in the company’s revised 14 December 2010 Economic Evaluation report, provide revised proposed costs per end-user and rates assuming that the productivity improvement factor that is applied to CMTS and routers to be 20 percent more than the productivity improvement factor proposed by the company.

117. With respect to the proposed TPIA per end-user monthly costs, provide the cost elements that are driven by TPIA access demand and the cost elements that are driven by TPIA traffic demand. Further, with respect to the TPIA cost elements that are driven by TPIA traffic demand, provide the cost per end-user per GB of usage broken down by each of the major resource components.

118. With respect to the company’s current retail broadband services complete the attached table.

Attachment 3

Interrogatories for Rogers Communications Inc.

101. Refer to section 3.2.3 Estimates of Demand Quantities in the company’s 10 December 2010 Economic Evaluation where the company provided Rogers’ and TPIA End-Users demand.

Using the format of Tables 1 to 18 in the company’s 10 December 2010 Economic Evaluation, provide revised proposed costs per end-user and rates assuming that the company’s retail end-user demand grows at a uniform rate of 4% per year over the study period and the TPIA end-user demand grows at a uniform rate per year over the study period such that the TPIA end-user market share relative to all-carrier end-user demand attains 5% in the last year of the study period. Provide the revised annual cable carrier and TPIA end-user demand under this scenario. Further discuss, with supporting rationale, changes in costing assumptions, if any, due to the changes in demand forecast under this scenario.

102. Refer to the response to Rogers(CRTC)15Sep10-107 where the company noted that it uses average traffic volumes to calculate the number of traffic-sensitive capital units.

a. Provide the company’s methodology, along with supporting rationale for determining the average daily traffic volume (as represented by byte loads) per end-user (upstream and downstream) for each of its service speed tiers.

b. Identify i) the time period or periods in terms of time of day and days in week/month ii) the number of measurements used to estimate the average daily traffic volume per end-user. Further, justify why the sample is viewed to be representative of the average daily traffic volume per end-user at the overall company level.

c. Comment with supporting rationale, on the appropriateness of using the traffic volume data for one month (October data adjusted by growth estimates for November and December) as representative of average daily traffic volumes per end-user.

103. Refer to the response to Rogers(CRTC)15Sept10-107, where the company indicated that additional downstream or upstream channels would be triggered in its access network before a threshold percentile utilization on a channel exceeded a specific percentage of its capacity.

a. Provide the capacity for a downstream channel and for an upstream channel in megabits per second for the company’s network. If a channel can be configured for different capacities provide the capacity in megabits per second for each configuration that the company uses or plans to use.

b. The company indicated that it used traffic loads represented by daily byte loads (upstream and downstream) for each of its speed tiers in its cost study. Provide separately for downstream and upstream channels, the traffic load represented by daily byte load on a channel that would trigger the need for an additional channel.

104. Refer to page 3 of the response to Rogers(CRTC)15Sept10-107 where the company provided its traffic growth rates for 10 years.

Using the format of Tables 1 to 18 in the company’s 10 December 2010 Economic Evaluation, provide revised proposed costs per end-user and rates assuming the growth in traffic levels for each year of the study period is 20 percent per year.

105. Refer to page 3 of the response to Rogers(CRTC)15Sept10-107 where the company provided per end-user traffic loads.

Using the format of Tables 1 to 18 in the company’s 10 December 2010 Economic Evaluation, provide revised proposed costs per end-user and rates assuming that the first year per end-user traffic load is reduced by 20 percent. Further discuss, with supporting rationale, changes in costing assumptions, if any, due to the changes in end-user traffic load under this scenario.

106. With respect to the company’s high-speed Internet and wholesale TPIA services:

a. Provide the number of wholesale and retail users, separately, for each of the years 2006 to 2010.

b. Provide the average retail Internet usage levels per end-user per month for each of the years 2006 to 2010.

c. For each of the company’s retail speeds, provide the average Internet usage level per end-user per month for the most recently available month, specifying the month.

d. Comment on the impact that the introduction of throttling (i.e. technical Internet traffic management practice (ITMP)) has had on the annual retail end-user usage growth rate, briefly describing the throttling measure(s) that was implemented.

e. Comment on the impact that the introduction of usage based billing (UBB) (i.e. economic ITMP) has had on the annual retail end-user usage growth rate, briefly describing UBB measure(s) that was implemented. Further, comment on the impact that the chosen usage cap per speed tier has had in curbing average usage per end-user to a level closer to the usage cap

f. Comment on the impact that the introduction of any recent changes in the company’s retail usage based billing has had or is expected to have on the annual retail end-user usage growth rate.

g. Indicate whether the company intends to introduce additional ITMPs in its retail and wholesale services in the future, identifying the types of ITMPs it may implement. Further comment on the impact that the introduction of an additional ITMP could have on the assumed annual end-user usage growth rate.

107. Refer to part b) and c) of the response to Rogers(CRTC)15Sep10-103.

a. In the response, the company provided the cost of deploying backhaul routers for TPIA aggregation service.

i. Confirm whether the backhaul routers are the same as the RTN routers identified in the diagram provided in attachment 1 to the response to Rogers(CRTC)15Sep10-102. If not, modify the diagram to include these routers and explain why separate backhaul routers are required for TPIA aggregation service;

ii. Confirm that the cost of the backhaul router assigned to TPIA is incurred in Year 1 of the proposed cost study. If so, explain, with supporting rationale, why the cost of the backhaul routers are not calculated based on the number of ports used each year.

b. In the response, Rogers noted that its average cost of carrying 1 GB of all-carrier internet traffic over its inter head-end core data network was estimated by taking the current operating and capital costs (depreciation) of Rogers’ core data network including fibre, optical transmission equipment and IP layer costs and dividing by the total all-carrier Gigabytes of traffic carried.

i. Provide the methodology, assumptions, source and vintage of the data used (e.g. operating costs and traffic) to develop the average cost of carrying 1 GB of all-carrier internet traffic over the company’s inter head-end core data network;

ii. Comment on the appropriateness of using depreciation (instead of incremental capital expenditures) to estimate prospective incremental costs associated with carrying 1 GB of all-carrier internet traffic over its inter head-end core data network. Further, the response should explain how this approach captures the prospective unit cost changes due to new supplier prices and changes in capacity over time;

iii.Provide the amount of depreciation expense included in the calculation of the cost of carrying 1 GB of all-carrier internet traffic, specifying the vintage of the depreciation expense estimate. Also provide the company’s depreciation expense amounts for the associated assets, identifying all assets used, for the last three years;

iv. Provide a comparison of installed first cost, throughput capacity and average working fill factors for 2006 and 2010 of the major components used to estimate the cost of carrying 1 GB of all-carrier internet traffic on the company’s inter head-end core data network. Comment on the changes in capacity and cost per GB over the last five years and on the appropriateness of using the proposed CIFs and PIFs over the life of the economic study;

v. If the vintage of the data used to estimate the current cost of carrying 1 GB of all-carrier internet traffic is not based on year-end 2010 but is based on earlier vintage data, identify whether this cost was adjusted to reflect annual changes in costs and productivity from that earlier vintage to 1 January 2011; if not, provide a revised current cost by applying the average annual change to the cost per GB over the last five years as provided in response to part iv) above;

vi. Confirm whether the inter head-end core data network carries traffic other than internet traffic. If so, explain how current operating and capital costs (depreciation) of the company’s core data network including fibre, optical transmission equipment and IP layer costs were attributed to the other services making use of the core data network. If no adjustments were made, comment on the appropriateness of using an attribution factor to account for non-internet traffic and provide an estimate of the appropriate attribution factor;

vii. Explain whether the incremental core network resources are provisioned to meet peak-period traffic loads. If so, provide a revised cost of carrying 1 GB of all-carrier internet traffic at the peak threshold utilization and comment on the appropriateness of using the revised cost in the Economic Evaluation.

108. Refer to page 2 of the response to Rogers(CRTC)15Sep10-105 where the company provided CMTS costs. Provide a comparison of the CMTS installed first cost, CMTS capacity, average working fill factor, and vintage and source of data used between the 2006 and 2010 Economic Evaluations.

109. With respect to transport costs associated with aggregation of competitor traffic, given that the company already has the necessary infrastructure in place to aggregate its own retail internet end-users traffic, explain and quantify what prospective incremental transport costs would be incurred for aggregating competitor TPIA traffic, with supporting rationale.

110. Refer to the tab named “Detail” in attachment 1 of the response to Rogers(CRTC)15Sept10-101 where the company provided the expense costs associated with IP Layer (CMTS) operations and maintenance and TPIA-specific equipment maintenance.

a. For each of the percent maintenance factors used, provide the methodology and assumptions used to estimate the percent maintenance factor, with supporting rationale. The response should provide the source and vintage of the data used.

b. For each of the expense unit costs used, provide the methodology and assumptions used to estimate the expense costs, with supporting rationale. The response should provide the source and vintage of the cost data and retrospective expense increase factors and productivity factors that were used to estimate the expense costs from the vintage year to the first year of the study period.

111. Refer to part b) –d) on page 2 of the response to Rogers(CRTC)15Sep10-108 where the company noted that HFC Maintenance cost is the ongoing, preventative maintenance to maintain an acceptable level of performance on the hybrid fibre/coax (HFC) distribution plant upstream path with regard to ingress noise that would degrade speed.

a. Explain, with supporting rationale, if and how the HFC maintenance expenses would be incurred whether or not the wholesale TPIA service is offered by the company; if these expenses could not be avoided, explain why the company proposed to include the HFC maintenance expenses as prospective incremental costs  in the company’s 10 December 2010 Economic Evaluation.

b. If in response to part a) above, the HFC maintenance expenses are prospective incremental costs, provide a detailed explanation identifying the methodology, assumptions and source and vintage of data used to estimate the number of technicians required to maintain the HFC distribution plant upstream path to homes passed.

112. Refer to page 4 in the response to Rogers(CRTC)15Sept10-101 where the company submitted that Bad Debt expense is based on the company’s retail experience. Provide the actual company’s bad debt percentage associated with its retail internet service for the most recent historical year, specifying the year.

113. Refer to page 4 of the response to Rogers(CRTC)15Sep10-105 where the company provided productivity improvement factor that is applied over the study period to routers, server, CMTS and backhaul transport equipment.

a. With respect to the productivity improvement factor applied to routers, servers, CMTS and backhaul transport equipment, identify the changes in capacity and cost per Kbps over the last five years and comment on the appropriateness of using the productivity improvement factor proposed for these capital components.

b. Using the format of Tables 1 to 18 in the company’s 10 December 2010 Economic Evaluation, provide revised proposed costs per end-user and rates assuming that the productivity improvement factor that is applied to routers, server, CMTS and backhaul transport equipment to be 20 percent more than the productivity improvement factor proposed by the company.

114. Refer to attachment 1 of the response to Rogers(CRTC)15Sept10-101 where the company provided the economic lives of aggregation gateway (AGW) routers, distribution gateway (DGW) routers, regional transport network (RTN) routers and backhaul routers.

a. Using the format of Tables 1 to 18 in the company’s 10 December 2010 Economic Evaluation, provide revised proposed costs per end-user and rates assuming that the economic life estimates of all the above mentioned routers is seven years.

b. Comment on the appropriateness of assuming that the economic life estimate of these devices is seven years, with supporting rationale.

115. Refer to page 3 in the response to Rogers(CRTC)15Sept10-105 where the company provided the economic lives of CMTS devices:

a. Using the format of Tables 1 to 18 in the company’s 10 December 2010 Economic Evaluation, provide revised proposed costs per end-user and rates assuming that the economic life estimates of all CMTS devices is seven years.

b. Comment on the appropriateness of assuming that the economic life estimate of these devices is seven years, with supporting rationale.

116. With respect to the proposed TPIA per end-user monthly costs, provide the cost elements that are driven by TPIA access demand and the cost elements that are driven by TPIA traffic demand. Further, with respect to the TPIA cost elements that are driven by TPIA traffic demand, provide the cost per end-user per GB of usage broken down by each of the major resource components.

117. With respect to the company’s current retail broadband services complete the attached table.

Attachment 4

Interrogatories for Shaw Communications Inc.

101. Refer to section 4.4 Demand Forecast in the company’s 10 December 2010 Economic Evaluation report where the company provided the year-end number of the company’s retail and TPIA end-users. 

Using the format of Tables 1 to 15 in the company’s 10 December 2010 Economic Evaluation report, provide revised proposed costs per end-user and rates assuming that the company’s retail end-user demand grows at a uniform rate of 4% per year over the study period and the TPIA end-user demand grows at a uniform rate per year over the study period such that the TPIA end-user market share relative to all-carrier end-user demand attains 5% in the last year of the study period. Provide the revised annual cable carrier and TPIA end-user demand under this scenario. Further discuss, with supporting rationale, changes in costing assumptions, if any, due to the changes in demand forecast under this scenario.

102. Refer to part (b) (i) of the response to Shaw(CRTC)15Sept10-107 where the company submitted that the peak period traffic assumptions are based on company’s traffic studies and provided the peak period traffic per end-user and a graph showing the peak period traffic for a subsection of 71,000 subscribers from November 1, 2010 to November 19, 2010.

a. Identify the peak period noted above in terms of time of day and days of week. Further, justify why the sample is viewed to be representative of peak period traffic at the overall company level; explain any changes that have occurred to the peak period over the past few years.

b. Explain whether the peak period bandwidth usage is determined based on the highest bandwidth consumption over a specified time interval (specify the time interval) during the peak period or an average of the bandwidth consumption during the peak period. Further, explain the criteria used by the company to determine when a peak period bandwidth consumption measurement would cause it to increase provisioning capacity.

c. Explain whether the peak period traffic is based only on retail Internet usage. If not, identify each service other than Internet which the peak period traffic is based on.

d. Explain how the graph showing the peak period traffic sample taken for a subsection of 71,000 subscribers from November 1, 2010 to November 19, 2010 is used to estimate the peak period traffic per end-user by service type. Further justify why this sample is viewed to be representative of peak period traffic at the overall company level and identify if any adjustments were made to account for regional differences.

e. Confirm whether the peak period traffic per end-user for all service speeds (Lite, Regular, Xtreme, Warp and Nitro) is based on measured peak period traffic for a subsection of subscribers from each of the respective service speeds. If not, identify for which service speed(s) the peak period traffic per end-user was measured.  Further provide the methodology and assumptions used to estimate the peak period traffic per end-user of all other service speeds.

103. Refer to part (b) (i) of the response to Shaw(CRTC)15Sept10-107 where the company provided the peak period traffic per end-user for each service type. Using the format of Tables 1 to 15 in the company’s 10 December 2010 Economic Evaluation report, provide revised proposed costs per end-user and rates assuming that the first year per end-user traffic load is reduced by 20 percent. Further discuss, with supporting rationale, changes in costing assumptions, if any, due to the changes in end-user traffic load under this scenario.

104. Refer to part (b) (ii) in the response to Shaw(CRTC)15Sept10-107 where the company provided the assumed growth in traffic levels over the 10 year study period. Using the format of Tables 1 to 15 in the company’s 10 December 2010 Economic Evaluation report, provide revised proposed costs per end-user and rates assuming the growth in traffic levels for each year of the study period is 20 percent per year.

105. With respect to the company’s high-speed Internet and wholesale TPIA services:

a. Provide the number of wholesale and retail users, separately, for each of the years 2006 to 2010.

b. Provide the average retail Internet usage levels per end-user per month for each of the years 2006 to 2010.

c. For each of the company’s retail speeds, provide the average Internet usage level per end-user per month for the most recently available month, specifying the month.

d. Comment on the impact that the introduction of throttling (i.e. technical Internet traffic management practice (ITMP)) has had on the annual retail end-user usage growth rate, briefly describing the throttling measure(s) that was implemented.

e. Comment on the impact that the introduction of usage based billing (UBB) (i.e. economic ITMP) has had on the annual retail end-user usage growth rate, briefly describing UBB measure(s) that was implemented. Further, comment on the impact that the chosen usage cap per speed tier has had in curbing average usage per end-user to a level closer to the usage cap.

f. Comment on the impact that the introduction of any recent changes in the company’s retail usage based billing has had or is expected to have on the annual retail end-user usage growth rate.

g. Indicate whether the company intends to introduce additional ITMPs in its retail and wholesale services in the future, identifying the types of ITMPs it may implement. Further comment on the impact that the introduction of an additional ITMP could have on the assumed annual end-user usage growth rate.

106. Refer to part (ii) CMTS Devices (IP Layer) in the response to Shaw(CRTC)15Sept10-105 where the company provided the CMTS cost per peak downstream kbps for each service type.

a. Identify the major components included in the development of CMTS cost and provide Installed First Cost (IFC) for each of these major components. Further, provide a comparison of the CMTS IFC, CMTS capacity, average working fill factor, and vintage and source of data used between the 2006 and 2010 Economic Evaluations.

b. Explain how the IFC is converted to cost per peak downstream kbps; the response should provide the methodology and assumptions, and source and vintage of data used to develop each IFC, identifying  the assumed capacity by major components, with supporting rationale

107. Refer to part (iii) Transport – Fibre & Data Switching in the response to Shaw(CRTC)15Sept10-105 where the company submitted that an end-user cost per kbps for data switching capital costs was developed based on the company’s costs incurred in deploying a metropolitan area network (MAN) to serve the Calgary area and also provided the Transport – data switching cost per peak downstream kbps that is used for each service type.

Provide the methodology and assumptions used, with supporting rationale in estimating the cost per peak downstream kbps for the Calgary area. The response should:

a. Identify the major components included in the development of Transport –data switching cost and provide the Installed First Cost (IFC) for each of these major components.

b. If the company identifies that it uses capital values that are based on depreciation or book value, comment on the appropriateness of using depreciation or net book value (instead of incremental capital expenditures) to estimate prospective incremental costs. Further, the response should explain how this approach captures prospective unit cost changes due to new supplier prices and changes in capacity over time.

c. Identify all the services (e.g. TPIA, retail internet, IP voice, trunked mobile voice and data traffic) for which the traffic was measured.

d. Explain whether the cost was developed based on total traffic measured and total cost or whether the cost was developed based on internet  traffic and total costs were adjusted accordingly; further explain if and how the costs were adjusted to account for regional differences and how such costs are representative of the company’s total operating territory.

e. Explain how the IFC is converted into cost per peak downstream kbps; the response should provide the methodology and assumptions used, with supporting rationale.

108. With respect to transport costs associated with aggregation of competitor traffic, given that the company already has the necessary infrastructure in place to aggregate its own retail internet end-users traffic, explain and quantify what prospective incremental transport costs would be incurred for aggregating competitor TPIA traffic, with supporting rationale.

109. Refer to part (ii) Network equipment and plant maintenance in the response to Shaw(CRTC)15Sept10-108 where the company provided the network equipment percentage of cumulative capital used to estimate annual parts and upgrades for network maintenance . Provide the methodology and assumptions used to derive this percentage, with supporting rationale; the response should identify the source and vintage of the data used.

110. Refer to part (ii) Network equipment and plant maintenance in the response to Shaw(CRTC)15Sept10-108 where the company provided the plant percentage of cumulative capital used to estimate plant maintenance.

a. Explain, with supporting rationale, if and how the plant maintenance expenses would be incurred whether or not the wholesale TPIA service is offered by the company; if these expenses could not be avoided, explain why the company proposed to include the plant maintenance expenses as prospective incremental costs in the company’s 10 December 2010 Economic Evaluation.

b. If in response to part a) above, the plant maintenance expenses are prospective incremental costs, provide a detailed explanation identifying the methodology, assumptions and source and vintage of data used to estimate the percentage, with supporting rationale.

111. Refer to part (v) Trouble reporting and assistance in the response to Shaw(CRTC)15Sept10-108 where the company submitted that it has estimated the number of calls per TPIA customer per month and the average length of a call in minutes. Provide the actual number of calls per TPIA customer per month and the average measured length of a call in minutes, for the most recent historical year, specifying the year. If the actual data is not available provide the methodology, assumptions and data vintage used to derive the estimates proposed in response to Shaw(CRTC)15Sept10-108.

112. Refer to the part (vi) CSG group in the response to Shaw(CRTC)15Sept10-108 where the company estimated the number of CSG resources at the start of the study based upon supervisor and staff in regions and head office, and their respective percentages  of time assigned to CSG. Provide the actual number of CSG resources and their respective percentages of time assigned to CSG related activities for the most recent historical year, specifying the year.

113. Refer to the attachment titled Shaw Cablesystems – TPIA Costing Model submitted in response to Shaw(CRTC)15Sept10-101 where the company provided the Bad Debt percentage and the assumptions related to estimating the Billing and Collection cost.

a. With respect to Bad Debt percentage, provide justification to support the Bad Debt percentage assumed in the cost study; the response should provide the actual company’s bad debt percentage associated with its retail internet service for the most recent historical year, specifying the year.

b. With respect to Billing and Collection cost estimated for TPIA, provide (i) methodology and assumptions used to estimate the assumed monthly billing system cost per end-user and maximum number of ISP end-users per employee; and (ii) the actual Billing and Collection cost per end-user for both the company’s internet end-user and TPIA’s end-users for the most recent historical year, specifying the year.

114. Refer to the attachment titled Shaw Cablesystems – TPIA Costing Model to the response to Shaw(CRTC)15Sept10-101 where the company provided productivity improvement factors applied to CMTS capital, Transport capital, POI router capital. 

a. With respect to productivity improvement factors applied to CMTS, Transport and POI router, identify the changes in capacity and cost per Kbps over the last five years and comment on the appropriateness of using the productivity improvement factor proposed for these capital components.

b. Using the format of Tables 1 to 15 in the company’s 10 December 2010 TPIA Economic Evaluation, provide revised proposed costs per end-user and rates assuming that the productivity improvement factors applied to CMTS, Transport and POI router to be 20 percent more than the productivity improvement factor proposed by the company.

115. Refer to the attachment titled Shaw Cablesystems – TPIA Costing Model submitted in response to Shaw(CRTC)15Sept10-101 where the company provided the economic lives of routers and CMTS devices.

a. Using the format of Tables 1 to 15 in the company’s 10 December 2010 Economic Evaluation report, provide revised proposed costs per end-user and rates assuming that the economic life estimate of routers and CMTS devices is seven years.

b. Comment on the appropriateness of assuming that the economic life estimate of these devices is seven years, with supporting rationale.

116. With respect to the proposed TPIA per end-user monthly costs, provide the cost elements that are driven by TPIA access demand and the cost elements that are driven by TPIA traffic demand. Further, with respect to the TPIA cost elements that are driven by TPIA traffic demand, provide the cost per end-user per GB of usage broken down by each of the major resource components.

117. With respect to the company’s current retail broadband services complete the attached table.

Date modified:

2011-02-04