ARCHIVED - Letter

Ottawa, 20 April 2011

Our Reference: 8661-C12-201102350, 8638-C12-201016882

BY E-MAIL

To Distribution List

Re:  Telecom Notice of Consultation CRTC 2011-77 (TNC 2011-77), Review of billing practices for wholesale residential high-speed access services

Pursuant to the proceeding initiated by TNC 2011-77, the Commission and parties may request information in the form of interrogatories on or before 29 April 2011.

In order to provide the incumbent companies with additional time to respond, Commission staff is providing certain interrogatories pertaining to costs in advance of the 29 April 2011.

Accordingly, Bell Aliant Regional Communications, Limited Partnership in Ontario and Quebec and Bell Canada (collectively the Bell companies), TELUS Communications Company (TCC), Cogeco Cable Inc., Quebecor Media Inc., on behalf of its affiliate Videotron Ltd., Rogers Communications Inc., and Shaw Communications Inc. are requested to provide responses to the attached interrogatories.

Commission staff notes that these interrogatories and their responses will be put on the record of both the TNC 2011-77 proceeding (file 8661-C12-201102350) and the Speed Matching proceeding (file 8638-C12-201016882).

Pursuant to the process established in the TNC 2011-77 proceeding, the information to be provided by the incumbent companies is to be filed with the Commission and served on all interested parties by 24 May 2011.  The above material must be received, not merely sent, by this date.  Copies of the documents should also be sent to richard.page@crtc.gc.ca and mohammed.omar@crtc.ca.

Yours sincerely,

Lynne Fancy
Director General
Competition, Costing and Tariffs
Telecommunications

cc: Yvan Davidson, yvan.davidson@crtc.gc.ca; Richard Pagé, richard.page@crtc.gc.ca; Tom Vilmansen, tom.vilmansen@crtc.gc.ca; Mohammed Omar, mohammed.omar@crtc.gc.ca

DISTRIBUTION LIST:

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ATTACHMENT

Interrogatories for the Bell companies

1. In their comments dated 28 March 2011, the Bell companies proposed the introduction of Aggregated Volume Pricing (AVP) for their residential Gateway Access Services (GAS - both legacy and FTTN). Under the AVP proposal, residential GAS (both legacy and FTTN) would be composed of two components: a flat-rated access fee by speed and the AVP which can be pre-purchased in blocks of single Terabytes (TB) and which has a post-use wholesale rate per Gigabyte (GB) for any extra GB required to accommodate the overall usage of a customer’s total end-users that month.

Refer to page 29 of the Bell companies' 28 March 2011 comments where the usage cost per GB per month estimate was provided for each of non-FTTN and FTTN services.

a. For each of the non-FTTN and FTTN usage cost per GB per month estimates, using the format of tables 1, 2, 3 and 5 of the Bell companies' 10 December 2010 cost study and the format of the tables in the response to The Companies(CRTC)15Sep10-103 and 105 (page 2 only), provide the proposed information that pertains to the AVP rate component. Further provide the associated methodologies and assumptions (including the  Capital Increase Factors (CIFs) and the study period used), with supporting rationale.

b. Further to the response to a) above, for each of the non-FTTN and FTTN usage cost per GB per month estimates pertaining to the AVP rate component, using the format of tables 1, 2, 3 and 5 of the Bell companies' 10 December 2010 cost study and the format of the tables in the response to The Companies(CRTC)15Sep10-103 and 105 (page 2 only), provide revised proposed rates and cost information which reflect CIFs of -15%.

c. For each of the non-FTTN and FTTN usage cost per GB per month estimates pertaining to the AVP rate component, using the format of tables 1, 2, 3 and 5 of the Bell companies' 10 December 2010 cost study and the format of the tables in the response to The Companies(CRTC)15Sep10-103 and 105 (page 2 only), provide revised proposed rates and cost information which reflect a study period of 10 years. The response should also identify, with supporting rationale, any change in methodology or assumptions (including the end-user and usage per end-user growth rates for the last five years of the study period).

d. Further to the response to c) above, for each of the non-FTTN and FTTN usage cost per GB per month estimates pertaining to the AVP rate component, using the format of tables 1, 2, 3 and 5 of the Bell companies' 10 December 2010 cost study and the format of the tables in the response to The Companies(CRTC)15Sep10-103 and 105 (page 2 only), provide revised proposed rates and cost information which reflect a study period of 10 years and CIFs of -15%.

2. In their comments dated 28 March 2011, the Bell companies proposed that, in recognition of the fact that usage was included in the cost study filed in the proceeding leading to Decision 2010-255, each ISP be given an aggregated traffic volume credit in proportion to their legacy usage up to a maximum of the aggregate usage assumed by multiplying the thresholds from the cost study (42.1 GB, 16.6 GB and 5.4 GB per month per end-user respectively for residential end-users of 5 Mbps, 2 Mbps and 512 Kbps) by the number of legacy residential GAS end-users that the ISP has for each speed.

a. For non-FTTN residential GAS speeds in their AVP proposal, confirm that the Bell companies are proposing to charge the access rates approved in Decision 2010-255. If not, identify the proposed rates, with supporting rationale.

b. Explain how the Bell companies calculated each of the credit values of 42.1 GB, 16.6 GB and 5.4 GB. The response should provide the details of the calculations, including the forecasted usage levels by year. The response should also identify whether the forecasted usage levels included customer reaction (e.g. demand curtailment) to usage related rates, and if so, further provide the associated adjustments, with supporting assumptions and rationale.

3. In its comments dated 28 March 2011, CNOC proposed a pricing model that has three distinct rate components: an access rate that would capture the non-usage-based cost, an aggregation rate that would capture all usage-driven costs and would be measured on the interface at the point of interconnection between the incumbent and competitor networks, and an interface rate which would recover the flat-rate cost of the port facing the competitor network. CNOC also proposed that these rate components be priced as Conditional Essential Services.

CNOC further proposed that aggregation (measured on the interface at the point of interconnection between the incumbent and competitor networks) be charged on a per wholesale customer basis and submitted that wholesale customers would have to pay for any peak traffic that their users cause in the aggregate on incumbent networks.

a. Assuming that the Bell companies were to offer their residential GAS services based on CNOC's proposed pricing model,

i. Provide an estimate of the additional development costs (PWAC and MEC per end-user) the Bell companies expect to incur to implement CNOC’s proposed pricing model; the response should identify all of the changes that would be required (e.g. network and billing systems changes, changes to operations) and provide all costing assumptions, with supporting rationale.

ii. Confirm that, for each of the FTTN residential speed options, the Bell companies’ proposed costs and rates under CNOC's proposed pricing model, except for the additional development costs provided in response to part a) above, would be the same as the costs and rates for the access rate component proposed in the Bell companies’ 28 March 2011 AVP submission.

If not, using the format of tables 1, 2, 3 and 5 of the Bell companies' 10 December 2010 cost study and the format of the tables in the response to The Companies(CRTC)15Sep10-103, 105 (page 2 only), 108 (PWAC table only), 109 and 110, for each of the Bell companies' FTTN residential speed options, provide proposed costs and rates for the access rate component under CNOC's proposed pricing model; further, provide the changes in methodologies and assumptions relative to the 28 March 2011 submission, with supporting rationale.

iii. Using the format of tables 1, 2, 3 and 5 of the Bell companies' 10 December 2010 cost study and the format of the tables in the response to The Companies(CRTC)15Sep10-103, 105 (page 2 only), 108 (PWAC table only), 109 and 110, for each of the Bell companies' non-FTTN residential speed options, provide proposed costs and rates for the access rate component under CNOC's proposed pricing model. Further, provide the changes in methodologies and assumptions relative to the cost submissions in the proceeding leading to Decision 2010-255 and Decision 2010-802 (as applicable), with supporting rationale.

iv. Using the format of tables 1, 2, 3 and 5 of the Bell companies' 10 December 2010 cost study and the format of the tables in the response to The Companies(CRTC)15Sep10-103 and 105 (page 2 only), provide proposed costs and rates per unit of peak residential traffic usage for the aggregation rate component under CNOC's proposed pricing model; Further provide the changes in methodologies and assumptions (e.g. change in cost drivers, forecast of peak residential traffic usage) relative to the 28 March 2011 AVP submission, with supporting rationale.

b. Explain, with supporting rationale, whether the Bell companies consider that there are major concerns with CNOC's proposed pricing model. If so, provide an alternative residential GAS model based on aggregated peak traffic pricing that the Bell companies can reasonably implement, and provide proposed rates and supporting cost information consistent with that provided in response to part a) above.

4. The following questions address the demand and revenue information under the Bell companies’ former proposals for per end-user UBB, their proposal for AVP, and their proposal of rates under CNOC's proposed pricing model.

a. For each of the non-FTTN residential speed options of the Bell companies’ former proposal for per end-user UBB, for each year of the study period,

i. Provide the forecast of revenue and average monthly revenue per end-user associated with the access rate component, assuming the rates set out in Decision 2010-255. The response should identify the demand used to estimate the revenue information.

ii. Provide the forecast of revenue and average monthly revenue per end-user associated with the UBB rate components, assuming the rates set out in Decision 2010-255 as adjusted according to Decision 2011-44. The response should identify the demand used to estimate the revenue information.

b. Refer to the Bell companies’ 11 March 2011 revised UBB cost study. For each of the FTTN residential speed options, for each year of the study period,

i. Provide the forecast of revenue and average monthly revenue per end-user associated with the access rate component. The response should identify the rates and demand used to estimate the revenue information.

ii. Provide the forecast of revenue and average monthly revenue per end-user associated with the UBB rate component. The response should identify the rates and demand used to estimate the revenue information.

c. Refer to 28 March 2011 AVP cost submission and to the response to part a) of question 2 above. For each of the non-FTTN and FTTN speed options, for each year of the study period, provide the forecast of revenue and average monthly revenue per end-user associated with the access rate component, excluding revenue associated with usage. The response should identify the rates and demand used to estimate the revenue information, identifying any changes to the demand assumptions and rationale used in response to a) i) and b) i) above.

d. Refer to the response to part a) of question 1 above. For each year of the study period, provide the forecast of revenue and average monthly revenue per end-user associated with the AVP rate component broken down into (i) pre-purchased TB blocks and (ii) post-use GB. The response should identify the rates and demand (for each of the non-FTTN and FTTN residential speed options) used to estimate the revenue information.

e. Refer to the responses to parts a) ii), a) iii) and b) of question 3 above. For each of the FTTN and non-FTTN residential speed options, for each year of the study period, provide the forecast of revenue and average monthly revenue per end-user associated with the access rate component under CNOC’s proposed model. The response should identify the rates and demand used to estimate the revenue information, identifying any changes to the demand assumptions and rationale used in response to a) i) and b) i) above.

f. Refer to the response to parts a) iv) and b) of question 3 above. For each year of the study period, provide the forecast of revenue and average monthly revenue per end-user associated with the aggregation rate component under CNOC’s proposed model. The response should identify the rates and demand (for each of the non-FTTN and FTTN residential speed options) used to estimate the revenue information.

Interrogatories for TCC

1. Refer to TCC's 15 March 2011 revised proposed monthly per end-user costs for residential ADSL access speeds.

a. For each residential ADSL access speed, using the format of table 5 of TCC's 15 March 2011 cost study, provide the proposed costs that would capture the non-usage driven costs, identifying all non-usage driven cost components, with supporting rationale. Further provide the assumptions and rationale supporting the end-user demand forecast.

b. Also refer to the response to question #2 asked by Commission staff on 5 April 2011. For each residential ADSL access speed, using the format of table 5 of TCC's 15 March 2011 cost study, provide the proposed costs that would capture the usage driven costs, identifying all usage driven cost components, with supporting rationale. Further, for each year of the study period, provide the associated usage (specify) demand forecast, with supporting assumptions and rationale.

Interrogatories for Cogeco Cable Inc.

1. Revise each of the Tables 3.1 to 3.5 provided in 10 December 2010 Economic Evaluation report, in response to Cogeco(CRTC)4Feb11-101, 102, 105, 106, 112 b), 119 b), 120 e) and 121 b), and Cogeco(CRTC)5Apr11-1002 to include  the following:

a. an additional column titled “present worth in the study period” that provides for each of the rate and cost components provided in the table, the present worth value in the study period,

b. an additional line to provide the present worth of competitor demand (used to derive the per end-user competitor-specific monthly cost components), and

c. an additional line to provide the present worth of All Carrier demand (used to derive the per end-user All Carrier monthly cost components).

2. Refer to the TPIA monthly per end-user costs and rates proposed in the company’s 10 December 2010 Economic Evaluation. 

a. For each speed tier, using the revised format of Tables 3.1 to 3.5 as outlined in question 1 above, provide a breakdown of the proposed costs into the following:

i. the proposed per end-user costs that would strictly capture the non-usage-driven costs, identifying all non-usage driven cost components, with supporting rationale, and

ii. the proposed per end-user costs that would strictly capture the usage-driven costs, identifying all usage driven cost components, with supporting rationale.

b. Further to the response to part a) above, for each speed tier, provide the proposed revised access and usage driven rates assuming that the access rate component is defined to strictly recover the non-usage driven cost components and the usage-driven rates strictly recover the usage driven cost components.

c. For each speed tier, for each of the years 2011 to 2020, provide the forecast of average monthly GB usage per end-user and average monthly peak traffic in kbps per end-user.  Explain, with supporting assumptions and rationale, the relationship between the forecasted annual estimates of average monthly GB usage per end-user and average monthly peak traffic in kbps per end-user.  Further provide the conversion factor(s) that reflect this relationship.

d. Further to the response to part c) above, for each speed tier, identify the year in which the average forecasted traffic exceeds the proposed volume cap.

e. Explain, with rationale, if and how customer reaction (e.g. demand curtailment) to overage UBB charges is accounted for in the cost study for developing the monthly costs and rate per end-user.  If not, explain why not, and further provide the necessary adjustments to take account of the anticipated customer reaction to UBB overage charges, with supporting assumptions and rationale.

f. Further to the response to part e) above, explain, with supporting rationale, whether the company intends to change its UBB usage thresholds over the study period;  if so, provide the necessary adjustments to take account of these changes with supporting assumptions and rationale.

3. Refer to paragraphs 56 to 62 in the attachment to the comments of Cogeco Cable Inc., Quebecor Media Inc., on behalf of its affiliate Videotron G.P., and Rogers Communications Partnership dated 28 March 2011, where the cable companies proposed to modify TPIA to an aggregated usage model where each small ISP would have its usage measured based on the average usage of all its end-users. With reference to this aggregated usage model:

a. For each speed tier, as applicable, provide the following:

i. the proposed aggregate threshold level where additional usage beyond this level would be subject to additional usage charges.  Explain, with supporting rationale, how the aggregate threshold value per ISP will be established and, if and how the aggregate threshold value per ISP would be adjusted over time.

ii. the proposed rate to be charged for additional usage beyond the aggregate threshold value identified in response to part i) above, with supporting assumptions and rationale. Also, explain whether a maximum monthly $ allowance would apply; if so, provide the allowance amount and describe how this amount would be determined and applied.

b. Confirm that, for each speed tier, the monthly costs and rates per end-user, proposed in the company’s 10 December 2010 Economic Evaluation report, would continue to be used.  If not, using the revised format of Tables 3.1 to 3.5 as outlined in question 1 above, provide revised proposed costs and rates per end-user, and provide all changes in methodology and assumptions, with supporting rationale.

4. In its comments dated 28 March 2011, CNOC proposed a pricing model that has three distinct rate components: an access rate that would capture the non-usage-based cost, an aggregation rate that would capture all usage-driven costs and would be measured on the interface at the point of interconnection between the incumbent and competitor networks, and an interface rate which would recover the flat-rate cost of the port facing the competitor network. CNOC also proposed that these rate components be priced as Conditional Essential Services.

CNOC further proposed that aggregation (measured on the interface at the point of interconnection between the incumbent and competitor networks) be charged on a per wholesale customer basis and submitted that wholesale customers would have to pay for any peak traffic that their users cause in the aggregate on incumbent networks.

a. Assuming that the company were to offer their wholesale TPIA services based on CNOC's proposed pricing model:

i. Provide an estimate of the additional development costs (PWAC and monthly equivalent cost (MEC) per end-user) the company expects to incur to implement CNOC’s proposed pricing model; the response should identify all of the changes that would be required (e.g. network and billing systems changes, changes to operations) and provide all costing assumptions, with supporting rationale.

ii. Confirm that, for each of the speed tiers, the costs and rates for the access rate component under CNOC’s proposed pricing model would be the same as those provided in response to 2 a) i) above, except for the additional development costs provided in response to part i) above.  If not, using the revised format of Tables 3.1 to 3.5 as outlined in question 1 above, provide proposed costs and rates for the access rate component under CNOC's proposed pricing model. Provide the changes in the costing methodology and assumptions relative to those used in the 10 December 2010 Economic Evaluation, with supporting rationale.

iii. Using the revised format of Tables 3.1 to 3.5 as outlined in question 1 above, provide proposed costs and rates per unit of peak traffic usage for the aggregation rate component under CNOC's proposed pricing model. Also,

- Provide the changes in the costing methodology and assumptions used to derive the proposed aggregation costs relative to those used in the 10 December 2010 Economic Evaluation, with supporting rationale.

- For each year of the study period, provide the forecast of the proposed peak traffic usage. The response should also provide the methodologies and assumptions, with supporting rationale, used to estimate the forecast of the proposed peak traffic usage.

b. Using the revised format of Tables 3.1 to 3.5 as outlined in question 1 above, for each of access and aggregation rate components as defined in responses to parts a) ii) and a) iii) above, provide revised proposed costs and rates, for each of the following change in assumptions:

i. For each year of the study period, apply a productivity factor of 15 percent for traffic driven components (e.g. CMTS, Transport and Router).

ii. the growth in traffic levels, provided on page 2 of attachment 3 in response to Cogeco(CRTC)15Sept10-101, is 20% per year, except for the first two years where the annual growth is assumed to equal the actual annual traffic growth experienced in 2010 over 2009.

iii. combine parts i) and ii) above.

c. Provide electronic copy of the revised attachments 1 and 2 of the response to Cogeco(CRTC)15Sept10-101 reflecting the costing methodology and assumptions made in response to part a) above.

d. Explain, with supporting rationale, whether the company considers that there are major concerns with CNOC's proposed pricing model; if so, provide an alternative model based on aggregated peak traffic pricing that the company can reasonably implement, and provide proposed rates and supporting cost information consistent with that provided in response to part a) above. Further provide the information requested in parts b) and c) above, as it pertains to the company’s proposed alternative pricing model.

5. The following questions address the demand and revenue information under each of the company’s proposed per end-user UBB model (as per 10 December 2010 submission), aggregated usage model, and the company’s rate proposal under CNOC's proposed pricing model.

a. Refer to the 10 December 2010 submission regarding the company’s proposed per end-user UBB model, for each speed tier:

i. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the per end-user rate component. The response should identify the rates and demand used to estimate the revenue information.

ii. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the additional usage rate component. The response should identify the rates and demand used to estimate the revenue information, including the additional usage above the threshold value and the percent of ISP end-users assumed to be subject to additional usage charges.

b. Refer to the company’s aggregated usage model submitted on 28 March 2011 and the company’s response to question 3 above. For each speed tier:

i. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the per end-user  rate component. The response should identify the rates and demand used to estimate the revenue information.

ii. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the additional usage rate components. The response should identify the rates and demand used to estimate the revenue information, including the additional usage above the aggregated threshold value and identifying any changes to the demand assumptions used in response to a) ii) above, with supporting assumptions and rationale.

c. Refer to the company’s rate proposal under CNOC's proposed pricing model and the company’s response to question 4 a) and d) above. For each speed tier:

i. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the access rate component (without usage). The response should identify the rates and demand used to estimate the revenue information.

ii. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the aggregation rate component. The response should identify the rates and demand used to estimate the revenue information.

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

1. Refer to the TPIA monthly per end-user costs and rates proposed in the company’s revised 14 December 2010 Economic Evaluation.  

a. For each speed tier, using the format of Tables 1 to 8 in the company’s updated Economic Evaluation revised 14 December 2010, provide a breakdown of the proposed costs into the following:

i. the proposed per end-user costs that would strictly capture the non-usage-driven costs, identifying all non-usage driven cost components, with supporting rationale, and

ii. the proposed per end-user costs that would strictly capture the usage-driven costs, identifying all usage driven cost components, with supporting rationale.

b. Further to the response to part a) above, for each speed tier, provide the proposed revised access and usage driven rates assuming that the access rate component is defined to strictly recover the non-usage driven cost components and the usage-driven rates strictly recover the usage driven cost components.

c. For each speed tier, for each of the years 2011 to 2020, provide the forecast of average monthly GB usage per end-user and average monthly peak traffic in kbps per end-user.  Explain, with supporting assumptions and rationale, the relationship between the forecasted annual estimates of average monthly GB usage per end-user and average monthly peak traffic in kbps per end-user.  Further provide the conversion factor(s) that reflect this relationship.

d. Further to the response to part c) above, for each speed tier, identify the year in which the average forecasted traffic exceeds the proposed volume cap.

e. Explain, with rationale, if and how customer reaction (e.g. demand curtailment) to overage UBB charges is accounted for in the cost study for developing the monthly costs and rate per end-user.  If not, explain why not, and further provide the necessary adjustments to take account of the anticipated customer reaction to UBB overage charges, with supporting assumptions and rationale.

f. Further to the response to part e) above, explain, with supporting rationale, whether the company intends to change its UBB usage thresholds over the study period;  if so, provide the necessary adjustments to take account of these changes with supporting assumptions and rationale.

2. Refer to paragraphs 56 to 62 in the attachment to the comments of Cogeco Cable Inc., Quebecor Media Inc., on behalf of its affiliate Videotron G.P., and Rogers Communications Partnership dated 28 March 2011, where the cable companies proposed to modify TPIA to an aggregated usage model where each small ISP would have its usage measured based on the average usage of all its end-users. With reference to this aggregated usage model:

a. For each speed tier, as applicable, provide the following:

i. the proposed aggregate threshold level where additional usage beyond this level would be subject to additional usage charges.  Explain, with supporting rationale, how the aggregate threshold value per ISP will be established and, if and how the aggregate threshold value per ISP would be adjusted over time.

ii. the proposed rate to be charged for additional usage beyond the aggregate threshold value identified in response to part i) above, with supporting assumptions and rationale. Also, explain whether a maximum monthly $ allowance would apply; if so, provide the allowance amount and describe how this amount would be determined and applied.

b. Confirm that, for each speed tier, the monthly costs and rates per end-user, proposed in the company’s revised 14 December 2010 Economic Evaluation report, would continue to be used.  If not, using the format of Tables 1 to 8 in the company’s updated Economic Evaluation revised 14 December 2010, provide revised proposed costs and rates per end-user, and provide all changes in methodology and assumptions, with supporting rationale.

3. In its comments dated 28 March 2011, CNOC proposed a pricing model that has three distinct rate components: an access rate that would capture the non-usage-based cost, an aggregation rate that would capture all usage-driven costs and would be measured on the interface at the point of interconnection between the incumbent and competitor networks, and an interface rate which would recover the flat-rate cost of the port facing the competitor network. CNOC also proposed that these rate components be priced as Conditional Essential Services.

CNOC further proposed that aggregation (measured on the interface at the point of interconnection between the incumbent and competitor networks) be charged on a per wholesale customer basis and submitted that wholesale customers would have to pay for any peak traffic that their users cause in the aggregate on incumbent networks.

a. Assuming that the company were to offer their wholesale TPIA services based on CNOC's proposed pricing model:

i. Provide an estimate of the additional development costs (PWAC and monthly equivalent cost (MEC) per end-user) the company expects to incur to implement CNOC’s proposed pricing model; the response should identify all of the changes that would be required (e.g. network and billing systems changes, changes to operations) and provide all costing assumptions, with supporting rationale.

ii. Confirm that, for each of the speed tiers, the costs and rates for the access rate component under CNOC’s proposed pricing model would be the same as those provided in response to 1 a) i) above, except for the additional development costs provided in response to part i) above.  If not, using the format of Tables 1 to 8 in the company’s updated Economic Evaluation revised 14 December 2010, provide proposed costs and rates for the access rate component under CNOC's proposed pricing model. Provide the changes in the costing methodology and assumptions relative to those used in the revised 14 December 2010 Economic Evaluation, with supporting rationale.

iii. Using the format of Tables 1 to 8 in the company’s updated Economic Evaluation revised 14 December 2010, provide proposed costs and rates per unit of peak traffic usage for the aggregation rate component under CNOC's proposed pricing model. Also,

- Provide the changes in the costing methodology and assumptions used to derive the proposed aggregation costs relative to those used in the revised 14 December 2010 Economic Evaluation, with supporting rationale.

- For each year of the study period, provide the forecast of the proposed peak traffic usage. The response should also provide the methodologies and assumptions, with supporting rationale, used to estimate the forecast of the proposed peak traffic usage.

b. Using the format of Tables 1 to 8 in the company’s updated Economic Evaluation revised 14 December 2010, for each of access and aggregation rate components as defined in responses to parts a) ii) and a) iii) above, provide revised proposed costs and rates, for each of the following change in assumptions:

i. for each year of the study period, apply a productivity factor of 15 percent for traffic driven components (e.g. CMTS, Transport and Router).

ii. the growth in traffic levels, provided on page 2 of the response to QMI(CRTC)15Sept10-107, is 20% per year, except for the first two years where the annual growth is assumed to equal the actual annual traffic growth experienced in 2010 over 2009.

iii. combine parts i) and ii) above.

c. Provide electronic copy of the revised economic evaluation model(s) provided in response to QMI(CRTC)15Sept2010-101 reflecting the costing methodology and assumptions made in response to part a) above.

d. Explain, with supporting rationale, whether the company considers that there are major concerns with CNOC's proposed pricing model; if so, provide an alternative model based on aggregated peak traffic pricing that the company can reasonably implement, and provide proposed rates and supporting cost information consistent with that provided in response to part a) above. Further provide the information requested in parts b) and c) above, as it pertains to the company’s proposed alternative pricing model.

4. The following questions address the demand and revenue information under each of the company’s proposed per end-user UBB model (as per revised 14 December 2010 submission), aggregated usage model, and the company’s rate proposal under CNOC's proposed pricing model.

a. Refer to the revised 14 December 2010 submission regarding the company’s proposed per end-user UBB model, for each speed tier:

i. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the per end-user  rate component. The response should identify the rates and demand used to estimate the revenue information.

ii. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the additional usage rate component. The response should identify the rates and demand used to estimate the revenue information, including the additional usage above the threshold value and the percent of ISP end-users assumed to be subject to additional usage charges.

b. Refer to the company’s aggregated usage model submitted on 28 March 2011 and the company’s response to question 2 above. For each speed tier:

i. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the per end-user  rate component. The response should identify the rates and demand used to estimate the revenue information.

ii. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the additional usage rate components. The response should identify the rates and demand used to estimate the revenue information, including the additional usage above the aggregated threshold value and identifying any changes to the demand assumptions used in response to a) ii) above, with supporting assumptions and rationale.

c. Refer to the company’s rate proposal under CNOC's proposed pricing model and the company’s response to question 3 a) and d) above. For each speed tier:

i. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the access rate component (without usage). The response should identify the rates and demand used to estimate the revenue information.

ii. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the aggregation rate component. The response should identify the rates and demand used to estimate the revenue information.

Interrogatories for Rogers Communications Inc.

1. Refer to the TPIA monthly per end-user costs and rates proposed in the company’s revised 11March 2011 Economic Evaluation.  

a. For each speed tier, using the format of Tables 1 to 18 in the company’s revised 11 March 2011  Economic Evaluation, provide a breakdown of the proposed costs into the following:

i. the proposed per end-user costs that would strictly capture the non-usage-driven costs, identifying all non-usage driven cost components, with supporting rationale, and

ii. the proposed per end-user costs that would strictly capture the usage-driven costs, identifying all usage driven cost components, with supporting rationale.

b. Further to the response to part a) above, for each speed tier, provide the proposed revised access and usage driven rates assuming that the access rate component is defined to strictly recover the non-usage driven cost components and the usage-driven rates strictly recover the usage driven cost components.

c. For each speed tier, for each of the years 2011 to 2020, provide the forecast of average monthly GB usage per end-user and average monthly peak traffic in kbps per end-user.  Explain, with supporting assumptions and rationale, the relationship between the forecasted annual estimates of average monthly GB usage per end-user and average monthly peak traffic in kbps per end-user.  Further provide the conversion factor(s) that reflect this relationship.

d. Further to the response to part c) above, for each speed tier, identify the year in which the average forecasted traffic exceeds the proposed volume cap.

e. Explain, with rationale, if and how customer reaction (e.g. demand curtailment) to overage UBB charges is accounted for in the cost study for developing the monthly costs and rate per end-user.  If not, explain why not, and further provide the necessary adjustments to take account of the anticipated customer reaction to UBB overage charges, with supporting assumptions and rationale.

f. Further to the response to part e) above, explain, with supporting rationale, whether the company intends to change its UBB usage thresholds over the study period;  if so, provide the necessary adjustments to take account of these changes with supporting assumptions and rationale

2. Refer to paragraphs 56 to 62 in the attachment to the comments of Cogeco Cable Inc., Quebecor Media Inc., on behalf of its affiliate Videotron G.P., and Rogers Communications Partnership dated 28 March 2011, where the cable companies proposed to modify TPIA to an aggregated usage model where each small ISP would have its usage measured based on the average usage of all its end-users. With reference to this aggregated usage model:

a. For each speed tier, as applicable, provide the following:

i. the proposed aggregate threshold level where additional usage beyond this level would be subject to additional usage charges.  Explain, with supporting rationale, how the aggregate threshold value per ISP will be established and, if and how the aggregate threshold value per ISP would be adjusted over time.

ii. the proposed rate to be charged for additional usage beyond the aggregate threshold value identified in response to part i) above, with supporting assumptions and rationale. Also, explain whether a maximum monthly $ allowance would apply; if so, provide the allowance amount and describe how this amount would be determined and applied.

b. Confirm that, for each speed tier, the monthly costs and rates per end-user, proposed in the company’s revised 11 March 2011 Economic Evaluation report, would continue to be used.  If not, using the format of Tables 1 to 18 in the company’s revised 11 March 2011 Economic Evaluation, provide revised proposed costs and rates per end-user, and provide all changes in methodology and assumptions, with supporting rationale.

3. In its comments dated 28 March 2011, CNOC proposed a pricing model that has three distinct rate components: an access rate that would capture the non-usage-based cost, an aggregation rate that would capture all usage-driven costs and would be measured on the interface at the point of interconnection between the incumbent and competitor networks, and an interface rate which would recover the flat-rate cost of the port facing the competitor network. CNOC also proposed that these rate components be priced as Conditional Essential Services.

CNOC further proposed that aggregation (measured on the interface at the point of interconnection between the incumbent and competitor networks) be charged on a per wholesale customer basis and submitted that wholesale customers would have to pay for any peak traffic that their users cause in the aggregate on incumbent networks.

a. Assuming that the company were to offer their wholesale TPIA services based on CNOC's proposed pricing model:

i. Provide an estimate of the additional development costs (PWAC and monthly equivalent cost (MEC) per end-user) the company expects to incur to implement CNOC’s proposed pricing model; the response should identify all of the changes that would be required (e.g. network and billing systems changes, changes to operations) and provide all costing assumptions, with supporting rationale.

ii. Confirm that, for each of the speed tiers, the costs and rates for the access rate component under CNOC’s proposed pricing model would be the same as those provided in response to 1 a) i) above, except for the additional development costs provided in response to part i) above.  If not, using the format of Tables 1 to 18 in the company’s revised 11 March 2011 Economic Evaluation, provide proposed costs and rates for the access rate component under CNOC's proposed pricing model. Provide the changes in the costing methodology and assumptions relative to those used in the 11 March 2011 Economic Evaluation, with supporting rationale.

iii. Using the format of Tables 1 to 18 in the company’s revised 11 March 2011 Economic Evaluation, provide proposed costs and rates per unit of peak traffic usage for the aggregation rate component under CNOC's proposed pricing model. Also,

- Provide the changes in the costing methodology and assumptions used to derive the proposed aggregation costs relative to those used in the 11 March 2011 Economic Evaluation, with supporting rationale.

- For each year of the study period, provide the forecast of the proposed peak traffic usage. The response should also provide the methodologies and assumptions, with supporting rationale, used to estimate the forecast of the proposed peak traffic usage.

b. Using the format of Tables 1 to 18 in the company’s revised 11 March 2011 Economic Evaluation, for each of access and aggregation rate components as defined in responses to parts a) ii) and a) iii) above, provide revised proposed costs and rates, for each of the following change in assumptions:

i. For each year of the study period, apply a productivity factor of 15 percent for traffic driven components (e.g. CMTS, Transport and Router).

ii. the growth in traffic levels, provided on page 3 of the response to Rogers(CRTC)15 Sept10-107, is 20% per year, except for the first two years where the annual growth is assumed to equal the actual annual traffic growth experienced in 2010 over 2009.

iii. combine parts i) and ii) above.

c. Provide electronic copy of the revised attachment 1 of the response to Rogers(CRTC)15Sept10-101 reflecting the costing methodology and assumptions made in response to part a) above.

d. Explain, with supporting rationale, whether the company considers that there are major concerns with CNOC's proposed pricing model; if so, provide an alternative model based on aggregated peak traffic pricing that the company can reasonably implement, and provide proposed rates and supporting cost information consistent with that provided in response to part a) above. Further provide the information requested in parts b) and c) above, as it pertains to the company’s proposed alternative pricing model.

4. The following questions address the demand and revenue information under each of the company’s proposed per end-user UBB model (as per 11 March 2011 submission), aggregated usage model, and the company’s rate proposal under CNOC's proposed pricing model.

a. Refer to the revised 11 March 2011 submission regarding the company’s proposed per end-user UBB model, for each speed tier:

i. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the per end-user rate component. The response should identify the rates and demand used to estimate the revenue information.

ii. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the additional usage rate component. The response should identify the rates and demand used to estimate the revenue information, including the additional usage above the threshold value and the percent of ISP end-users assumed to be subject to additional usage charges.

b. Refer to the company’s aggregated usage model submitted on 28 March 2011 and the company’s response to question 2 above. For each speed tier:

i. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the per end-user  rate component. The response should identify the rates and demand used to estimate the revenue information.

ii. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the additional usage rate components. The response should identify the rates and demand used to estimate the revenue information, including the additional usage above the aggregated threshold value and identifying any changes to the demand assumptions used in response to a) ii) above, with supporting assumptions and rationale.

c. Refer to the company’s rate proposal under CNOC's proposed pricing model and the company’s response to question 3 a) and d) above. For each speed tier:

i. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the access rate component (without usage). The response should identify the rates and demand used to estimate the revenue information.

ii. For each of the years 2011 to 2020, provide the forecast of revenue and average monthly revenue per end-user associated with the aggregation rate component. The response should identify the rates and demand used to estimate the revenue information.

Interrogatories for Shaw Communications Inc.

1. Refer to the TPIA monthly per end-user costs and rates proposed in the company’s 10 December 2010 Economic Evaluation.  

a. For each speed tier, using the format of Tables 1 to 15 in the company’s 10 December 2010 Economic Evaluation report, provide a breakdown of the proposed costs into the following:

i. the proposed per end-user costs that would strictly capture the non-usage-driven costs, identifying all non-usage driven cost components, with supporting rationale, and

ii. the proposed per end-user costs that would strictly capture the usage-driven costs, identifying all usage driven cost components, with supporting rationale.

b. Further to the response to part a) above, for each speed tier, provide the proposed revised access and usage driven rates assuming that the access rate component is defined to strictly recover the non-usage driven cost components and the usage-driven rates strictly recover the usage driven cost components.

c. For each speed tier, for each of the years 2011 to 2020, provide the forecast of average monthly GB usage per end-user and average monthly peak traffic in kbps per end-user.  Explain, with supporting assumptions and rationale, the relationship between the forecasted annual estimates of average monthly GB usage per end-user and average monthly peak traffic in kbps per end-user.  Further provide the conversion factor(s) that reflect this relationship.

Date modified:

2011-04-28