ARCHIVED - Letter

Ottawa, 13 June 2011

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

BY E-MAIL

To Distribution List

Re: Request for disclosure of costing information filed in confidence  and further responses to interrogatories - Telecom Notice of Consultation CRTC 2011-77, Review of billing practices for wholesale residential high-speed access services (NoC 2011-77), as amended by NoC 2011-77-1 and NoC 2011-77-2, and Business Speed Matching proceeding

This letter addresses requests for disclosure of information designated as confidential and further responses to interrogatories made in the proceeding initiated by Telecom Notice of Consultation CRTC 2011-77, Review of billing practices for wholesale residential high-speed access services (NoC 2011-77), as amended by NoC 2011-77-1 and NoC 2011-77-2, and the Business Speed Matching proceeding.

On 31 May 2011, the following parties filed requests for disclosure of information designated as confidential or further responses to interrogatories: Canadian Network Operators Consortium Inc. (CNOC), Bell Aliant Regional Communications, Limited Partnership in Ontario and Quebec and Bell Canada (collectively the Bell companies), TELUS Communications Company (TELUS), Cogeco Cable Inc. (Cogeco), Quebecor Media Inc., on behalf of its affiliate Videotron Ltd. (QMI), Rogers Communications Partnership (Rogers), Shaw Communications Inc. (Shaw), and Primus Telecommunications Canada Inc. (Primus).

On 7 June 2011, the Bell companies, CNOC, Cogeco, QMI, Rogers, TELUS, and Shaw, filed with the Commission their responses to the above requests. The Commission did not receive responses from the Canadian Association of Internet Providers and Netflix Inc.

Disclosure

Requests for disclosure of information designated as confidential are addressed in light of sections 38 and 39 of the Telecommunications Act (the Act) and sections 30 and following of the CRTC Rules of Practice and Procedure (the Rules). In evaluating a request, an assessment is made as to whether the information falls into a category of information that can be designated confidential pursuant to section 39 of the Act. The Commission then assesses whether there is any specific direct harm likely to result from the disclosure of the information in question and whether any such harm outweighs the public interest in disclosure. In making this evaluation, a number of factors are taken into consideration, including the degree of competition and the importance of the information to the ability of the Commission to obtain a full and complete record. The factors considered by the Commission are discussed in more detail in Broadcasting and Telecom Information Bulletin CRTC 2010-961 Procedures for filing confidential information and requesting its disclosure in Commission proceedings. 

In addition, in the circumstances of this case, the Commission considered the extent to which similar information was disclosed on the public record of this proceeding and the proceeding leading to Telecom Decision CRTC 2010-255.

Having regard to all of the considerations set out above, parties are to place on the public record of this proceeding the information designated as confidential in response to the interrogatories and cost studies listed in Attachment 1, to the extent set out in that Attachment. In each case where full or partial disclosure is to occur, it is considered that the specific direct harm, if any, likely to be caused by disclosure would not outweigh the public interest in disclosure.

Further Responses

The Commission has also required parties to file further responses to interrogatories and additional information, either in response to a request from another party, or in reviewing the interrogatory responses. In doing so, the Commission has determined that this further response is necessary in order to have a complete record. Parties are to provide further responses as requested by other parties set out in Attachment 2. Parties are also to provide the additional information requested by the Commission as set out in Attachment 3.

In their responses, all parties are to provide information on the public record consistent with the previous disclosure requirements in this proceeding and those rendered in Attachment 1.

Filing Requirements

The information to be disclosed by parties as set out in Attachment 1 and further responses as identified in Attachment 2 are to be filed with the Commission and served on all parties, by 21 June 2011.

All further information requested in Attachment 3 is to be filed with the Commission and served on all parties, by 30 June 2011.

The above material must be received, not merely sent, by this date. Copies of the documents should also be sent to thomas.hui@crtc.gc.ca and doug.thurston@crtc.gc.ca.

Yours sincerely,

Original signed by:

Lynne Fancy
Director General
Competition, Costing and Tariffs
Telecommunications

cc: Yvan Davidson, yvan.davidson@crtc.gc.ca
Thomas Hui, thomas.hui@crtc.gc.ca
     Doug Thurston, doug.thurston@crtc.gc.ca

Attachment 1 - Disclosure of information designated as confidential

Refer to The Companies(CRTC)20Apr11-3 iii

The proposed rates for the access rate component for non-FTTN residential speed options under CNOC's proposed pricing model.

Refer to The Companies(CRTC)20Apr11-4 a) to f)

All rates information associated with the Commission’s request for information under the Bell companies’ former proposals for per end-user UBB rates, their proposal for AVP rates and their proposed rates under CNOC’s proposed pricing model.

Refer to TELUS(CRTC)20Apr11-1

For each speed tier and Total-Wholesale ADSL, disclose the Present Worth of Major Demand Units in Attachment 1 of TELUS(CRTC)20Apr11-1; and

Disclose all information in table titled Year-end Demand Estimates End-User Units in Attachment 2 of TELUS(CRTC)20Apr11-1.

Refer to Cogeco(CRTC)20Apr11-2 b

Refer to the table in part b on page 2 of the response to Cogeco(CRTC)20Apr11-2. For each speed tier, disclose the proposed revised access and usage driven rates in the table.

Refer to Quebecor Media(CRTC)20Apr11-1 b

Refer to the table in part b on page 2 of the response to Quebecor Media(CRTC)20Apr2011-1. For each speed tier, disclose the proposed revised Non-Usage Driven Costs Monthly Charge and Usage-Driven Costs Monthly Charge.

Refer to Rogers(CRTC)20Apr11-1 b

Refer to Tables 3, 3A, 6, 6A, 9, 9A, 12, 12A, 15, 15A, 18, 18A, in the Attachment to the response to Rogers(CRTC)20Apr11-1 a) and b). Disclose the Monthly $ Per Cable Modem Unit for the line item Present Worth of Total Revenue Impacts.

Refer to Shaw(CRTC)20Apr11-1 b

Refer to Attachments 1-5 of the response to Shaw(CRTC)20April11-1. For each speed tier in Tables 3, 6, 9, 12, and 15, disclose the $ per unit per month for the line item Present Worth of Revenue.

Attachment 2 - Further information in response to party request

Refer to CNOC(Cable Carriers)29Apr11-7 (a)

Provide an illustrative numerical example of CNOC’s 95th percentile proposal with specific reference to the proposed Cable Carriers’ POI aggregation services.

Attachment 3 - Commission interrogatories and further response

The Companies

Refer to The Companies(CRTC)20Apr11-1 TNC 2011-77

1. On page 5 of 18, the Companies stated that, “For GAS-FTTN, the Companies have performed the cost study for a cost per GB per month assuming that only one single incremental GB is required for each new FTTN end-user.  For the reasons discussed in The Companies(CRTC)15Sep10-104 TRP 2010-2010-632 Update/Revised, the Companies have assumed that for every 1 GB of use per month, the average end-user requires  # Kbps of bandwidth during the peak period, which is considered to be the busiest hour of the month.  Since the objective of that exercise was to determine the cost per incremental GB per month, the Companies did not perform a cost study for the entire forecast of GB usage.” 

a) Using the format 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 costs per GB for the four scenarios as requested in the interrogatory assuming the entire forecast of GB usage and usage growth per end-user over the study period as opposed to using one incremental GB per new end-user.

b) Provide proposed cost-based rates per GB based on the revised costs per GB provided in response to part a) above. The response should also provide all assumptions with supporting rational

2. Refer to The Companies(CRTC)20Apr11-3 (a) (iv) TNC 2011-77

a) Provide a revised response to the interrogatory assuming the entire forecast of GB usage and usage growth per end-user over the study period as opposed to using one incremental GB per new end-user. The response should also provide all assumptions with supporting rationale.

b) In the response, the Bell companies provided proposed costs per peak mbps at the 95th percentile (before development costs) but did not propose a cost-based rate per peak mbps at the 95th percentile, consistent with these costs.

i. Provide proposed cost-based rates per peak mbps at the 95th percentile. The response should be based on the revised costs per peak mbps provided in response to Part a) above, excluding development costs. The response should also provide all assumptions with supporting rationale.

ii. Explain if and how the company’s proposed rates provided in response to part i above recover the incremental (causal) costs associated with the competitor’s usage driven costs. If not, explain.

iii. Provide the company’s best estimates of the development costs and the PWAC associated with the introduction peak period pricing as proposed by CNOC. Further provide an estimate of the PWAC expressed on a per unit basis by using the present worth of the number of FTTN and non-FTTN end-users over 10 years (2011-2020). Identify the annual forecasts of the number of FTTN and non-FTTN end-users over 2011-2020.

 

3. Refer to The Companies(CRTC)05Apr11-4a, and 5 TNC 2011-77

Further, refer to The Companies’ proposed cost studies associated with the proposed wholesale monthly recurring GAS-FTTN access rates and service charge.

a) Provide the vendor fees associated with each of the following:

i. Truck roll to customer premise;
ii. Truck roll to remote;
iii. Activities at customer premise for POTS splitter installation;
iv. Activities at customer premise for line testing and optimization;
v. Activities at customer premise for modem installation; and
vi.Activities at remote.

The response should explain if and how the vendor fees identified above are separate or combined billed items by the vendor, with supporting rationale.

b) With reference to a first-time FTTN installation (i.e. where there is no existing FTTN service prior to installation), provide the following information:

i. for each of the years 2011 and 2015, the assumed percentage of time that the installation is a first-time installation for wholesale FTTN service, with supporting rationale;
ii. the frequency, time, and costs (specifying the percentage attributed from the applicable vendor fee) for the truck roll to customer premise. Further provide the percentages of the time that this cost is recovered in each of the recurring rate and service charge, with supporting rationale;
iii. the frequency, time, and costs (specifying the percentage attributed from the applicable vendor fee) of installing a POTS splitter at the customer premise. Further, confirm that this cost is only recovered in the recurring rate, if not, explain;
iv. the frequency, time, and costs (specifying the percentage attributed from the applicable vendor fee) of performing line testing activities at the customer premise. Further, confirm that this cost is only recovered in the service charge, if not, explain;
v. the frequency, time, and costs (specifying the percentage attributed from the applicable vendor fee) of performing line modem installation at the customer premise. Further, explain whether this cost is recovered in the GAS FTTN tariff and if so, specify which tariff element;
vi. the frequency, time, and costs (specifying the percentage attributed from the applicable vendor fee) of the truck roll to the remote, with supporting rationale. Further, confirm that this cost is only recovered in the service charge, if not, explain; and vii.the frequency, time, and costs (specifying the percentage attributed from the applicable vendor fee) of performing cross-connect work at the remote. Further, confirm that this cost is only recovered in the service charge, if not, explain.

c) With reference to a subsequent FTTN installation (i.e. where there is an existing FTTN service prior to installation), provide the following information:

i. for each of years 2011 and 2015, the assumed percentage of time that the installation is a subsequent installation for FTTN, with supporting rationale;

ii. the frequency, time, and costs (specifying the percentage attributed from the applicable vendor fee) for the truck roll to customer premise. Further provide the percentages of the time that this cost is recovered in each of the recurring rate and service charge, with supporting rationale;

iii. the frequency, time, and costs (specifying the percentage attributed from the applicable vendor fee) of installing a POTS splitter at the customer premise. Further, confirm that this cost is only recovered in the recurring rate, if not, explain;

iv. the frequency, time, and costs (specifying the percentage attributed from the applicable vendor fee) of performing line testing activities at the customer premise. Further, confirm that this cost is only recovered in the service charge, if not, explain;

v. the frequency, time, and costs (specifying the percentage attributed from the applicable vendor fee) of performing line modem installation at the customer premise. Further, explain whether this cost is recovered in the GAS FTTN tariff and if so, specify which tariff element. If a competitor places its own certified modem at the customer premise, explain why a truck roll and line testing activities would be required, with supporting rationale;

vi. the frequency, time, and costs (specifying the percentage attributed from the applicable vendor fee) of the truck roll to the remote, with supporting rationale. Further, confirm that this cost is only recovered in the service charge, if not, explain; and

vii. the frequency, time, and costs (specifying the percentage attributed from the applicable vendor fee) of performing cross-connect work at the remote. Further, confirm that this cost is only recovered in the service charge, if not, explain.

4. Refer to The Companies(CRTC)04Feb11-116 TNC 2011-77 and The   Companies(CRTC)04Jan11-1 TNC 2011-77

Further, refer to The Companies’ proposed cost studies associated with the proposed wholesale monthly recurring HSA-FTTN access rates and service charge.

a) Provide a proposed revised response to question 3 above, as it pertains to the proposed HSA-FTTN service, identifying the differences, if any, between the proposed HSA-FTTN and GAS-FTTN services, with supporting rationale.

5. Refer to The Companies(CRTC)04Feb11-105 TNC 2011-77

a) Based on the engineering and installation unit costs provided in the response to the above noted interrogatory, for each of engineering and installation, quantify the number of person years of work and associated annual costs that would be incurred for the engineering and installation of DSLAMs for the Bell Companies total retail and wholesale services for the forecast years of 2011 and 2012.
b) For each of engineering and installation, comment on the reasonableness of the annual number of engineers and technicians required for this activity.

c) Using the format of Tables 1, 2, 3, 5 of the cost study, provide proposed revised costs and rates per end-user for the following change in assumptions: use the average percent installation and engineering expressed as a percent of the DSLAM Installed First Cost (specifying the percentage for each of installation and engineering) of the economic study associated with the residential 5 Mbps non-FTTN GAS service filed in the proceeding leading to Decision 2010-255.

6. Refer to The Companies(CRTC)05Apr11-3 TNC 2011-77

a) With reference to BTS, given that the vendor is a wholly owned subsidiary of Bell Canada, provide an estimate of the vendor’s incremental costs for each of the services provided by the vendor with respect to GAS end-user installations. Explain why these incremental costs should not be used in the service charge cost study instead of the proposed service costs that were derived from the various vendor fees.

b) Explain why the installation-related vendor fees cannot be established based on one truck roll, similar to installation practices of other ILECs (e.g. in Bell Aliant, the technician goes to the remote and then on to the customer premises to complete the installation, or goes directly to the customer premises to perform the installation).

SaskTel

1. Refer to SaskTel(CRTC)5Apr11-1 TN 246A

a) Explain, with supporting rationale, whether SaskTel plans to do visits to its retail customer premises to perform a firmware upgrade as proposed for its wholesale service. If so, provide the expected frequency for the retail customers.

b) Comment, with supporting rationale, whether the firmware upgrades could be less frequent as the product matures.

Bell Aliant

1. Refer to Bell Aliant(CRTC)04Feb11-104 TRP 2010-632

On page 3 of 4, Bell Aliant indicated that the Company contracts out the majority of the engineering design and installations associated with the remote FTTN DSLAM cabinets.

a) Provide the contractor’s name and indicate whether the contractor is affiliated with Bell Aliant to any degree.  If the contractor is affiliated with Bell Aliant, explain with supporting rationale how the associated contract prices reflect market rates. If the contractor is wholly owned by Bell Aliant, provide an estimate of the contractor’s incremental costs for each of the services provided by the contractor with respect to aggregated DSL access and user installations.

b) Identify the duration of the current contract(s) to perform installation activities, including the expected renewal date of the contract.

c) Identify by which method Bell Aliant is charged for contractor services required for work at the remote FTTN DSLAM cabinets.  Specify whether it is flat rate per activity, time and labour, or another method.

TELUS

1. Refer to the format of TELUS’ revised cost study filed on 16 March 2011

Provide revised costs and rates for each of the following changes in assumptions:

a) Assuming a 10-year study period, a growth of 1% per month in traffic usage per end-user;

b) Assumptions in a) and annual CIFs of -2% for access driven costs components and -10% for traffic driven cost components; and

c) Assumptions in a) and annual CIFs of -4% for access driven costs components and -15% for traffic driven cost components.

MTS Allstream

1. Refer to MTS Allstream(CRTC)5Apr11-8 VDAS

The company provided annual vendor support maintenance costs per 1000 Mbps V-AHSSPI interface service.  Provide the vendor company’s name and indicate whether the vendor company is affiliated with MTS Allstream to any degree.  If the vendor company is affiliated with MTS Allstream, explain with supporting rationale how the maintenance contract expenditure identified in this as well as related interrogatories reflect market-based rates.

2. Refer to MTS Allstream(CRTC)5Apr11-4 VDAS

a) Under the company’s proposed tariff structure, confirm that a competitor who acquires two 100 MBPs V-AHSSPI interfaces would also acquire two 1 GB dedicated port interfaces.  If not, explain.

b) Explain why the company has not proposed to offer V-AHSSPI interface speeds at speeds lower than 100 Mbps, similar to that of the company’s wholesale ADSL Data Access Service (i.e., interface speeds of 10 Mbps, 30 Mbps and 50 Mbps)

c) Under a scenario where the company is required to provide the shared core network bandwidth and the 1 GB dedicated  interface under separate tariffs, provide the following:

i. Proposed monthly rates for each of the 10 Mbps, 30 Mbps, 50 Mbps,100 Mbps, 400 Mbps, and 1000 Mbps core network bandwidth service, along with supporting costs and specifying any assumptions used in the assignment of costs:

ii. Proposed monthly rates for a stand-alone 1 GB dedicated interface (excluding any shared network costs), along with supporting costs and specifying any costing assumptions with supporting rationale.

3. Refer to MTS Allstream(CRTC)15Sep10-103

Using the format of tables 6.4.5-1 to 6.4.5-9 of the revised economic study filed on 11 March 2011, and the tables of the responses to MTS Allstream(CRTC)15Sep10-103, for the VDSL high-speed data access service, provide revised cost studies and proposed revised rates per end-user for each of the following changes in assumptions:

a) Study period is 5 years, the cost increase factor for ‘DSLAM All Equipment’ is assumed to be -4% for each year of the study period; the cost increase factor for ‘Internet Computers – Hardware’ (access as well as V-AHSSPI Interfaces) is assumed to be -15% for each year of the study period; and the ‘Life Estimate’ for ‘Internet Computers – Hardware’  (access as well as V-AHSSPI Interfaces) is assumed to be 6 years (instead of 4 years)

b)  Same scenario as in a) above, but using a study period of 10 years.

4. Refer to MTS Allstream Tariff Item 5820 – ADSL Data Access Service

Provide the following for the year 2010:

a) The company’s retail demand by speed

b) The company’s wholesale access as well as AHSSPI demand by speed

Cogeco

1. Refer to Cogeco(CRTC)20Apr11-5

a) Part a) i)

Provide the company’s best estimates of annual revenues and average monthly revenue per end-user associated with the per end-user rate component broken down by speed tier.

b) Part b) ii)

Provide the company’s best estimates of the annual revenues and average monthly revenue per end-user associated with the additional usage rate components; the response should provide for each year of the study period, forecast estimates of the aggregated monthly threshold level per TPIA customer and the demand for additional aggregated usage beyond the aggregated threshold value, with supporting assumptions. 

2. Refer to tab “Network Cost” in the revised attachment 1 (network costs model) provided in the response to interrogatory Cogeco(CRTC)5Apr11-1004

Further, refer to the line number 160 where technician maintenance expense associated with CMTS port is calculated using regular maintenance configuration time per unit estimate from line number 159.

a) For each speed tier and for the sum of all speed tiers, for each year of the study period, calculate and provide the CMTS port technician maintenance hours, and the associated number of technicians required to maintain CMTS ports.  Also, provide the actual number of technicians (for the year 2010) that were required to maintain CMTS ports. Comment on the reasonableness of the annual number of technicians required for this maintenance activity.

b) For each of the 2006 and 10 December 2010 TPIA economic studies, for each year of the study period, calculate and provide the CMTS port technician maintenance expense expressed as a percent of cumulative CMTS port capital.  Explain, with supporting rationale, why the CMTS port technician maintenance expense expressed as a percent of cumulative CMTS capital has increased from the 2006 to the 2010 economic study.

c) Using the revised format of Tables 3.1 to 3.5 as outlined in Cogeco(CRTC)20Apr11-1, provide proposed revised costs and rates per end-user for the following change in assumptions: use the percent CMTS port technician maintenance expense expressed as a percent of cumulative CMTS port capital for the year 2011 of the 2006 economic study provided in response to part b) above to derive CMTS port technician maintenance expenses instead of using time estimates.

3. Refer to Attachments 1 and 3 to the response to Cogeco(CRTC)15Sept10-101

The company provided the fibre installation costs used in the study and the calculation of the aerial and buried cost fibre cable installation per km based on the percentage of aerial and fibre buried in Ontario and Quebec. 

a) Explain with supporting rationale, why the percentage of fibre buried in Ontario changes over the study period.

4. Refer to Cogeco(CRTC)20Apr11-2

The company proposed revised monthly access rates and usage driven rates for each speed tier, assuming that access rate component was defined to strictly recover non-usage-driven costs and the usage-driven rate component was defined to recover usage-driven costs.

a) Based on the usage-driven costs, provide a proposed revised rate per GB usage that is applicable to all speed tiers and describe how this rate is determined with supporting rationale.

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

Assume that the access rate component is defined to recover all incremental costs associated with the equipment/facilities between the customer premises and the CMTS (including node segmentation costs and the CMTS costs), and that the traffic rate component recovers the remaining incremental costs (i.e. all incremental costs associated with the equipment/facilities between the CMTS and the aggregated POI).

a) Using the revised format of Tables 3.1 to 3.5 as outlined in Cogeco(CRTC)20Apr11-1, provide a breakdown of the proposed incremental costs under the above noted definitions into the following:

i. the proposed per end-user access incremental costs for each speed tier; and

ii. the proposed incremental traffic cost applicable to all speed tiers, expressed on a per GB basis.

The response should include a description of how these costs are calculated, with supporting rationale.

b) Provide the proposed revised cost-based monthly access rate for each speed tier, based on the revised access costs provided in response to part a) above.

c) Provide the proposed revised cost-based rate per GB, based on the revised traffic costs provided in response to part a) above (to be applied to the ISP’s total monthly aggregated usage).

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

Assume that the access rate component is defined to recover all incremental costs associated with the equipment/facilities between the customer premises and the CMTS (including node segmentation costs and the CMTS costs), and that the traffic rate component recovers the remaining incremental costs (i.e. all incremental costs associated with the equipment/facilities between the CMTS and the aggregated POI).

a) Using the revised format of Tables 3.1 to 3.5 as outlined in Cogeco(CRTC)20Apr11-1, provide the proposed traffic costs applicable to all speed tiers, expressed on a peak period Kbps basis (at the 95th percentile proposed by CNOC, or the company’s proposed peak period Kbps) under the above noted traffic rate component definition. The response should include a description of how these incremental costs are calculated with supporting rationale and identify the peak period approach used.

b) Provide the proposed revised cost-based rate per peak period Kbps, based on the revised incremental traffic costs provided in response to part a) above (to be applied to the ISP’s peak period Kbps at the network interface during the month), with supporting assumptions and rationale.

c) In response to Cable carriers(CRTC)20Apr11-3 d), the cable carriers indicated that the proposed CNOC peak period pricing methodology focused on solely on the peak for the ISP rather than the peak for the Cable carrier’s network and would not be able to capture congestion on the cable carrier’s network nor the appropriate incremental (causal) costs. Explain if and how the company’s proposed peak period Kbps rate recovers the causal costs associated with the competitor’s use of the cable carrier’s network. If not, explain why not.

d) Provide the company’s best estimates of the development costs and the PWAC associated with the introduction of peak period pricing as proposed in b) above. Further, provide an estimate of the PWAC on a per unit basis by using the present worth of the number of ISP end-users over the 10 year study period (2011-2020).

QMI 

1. Refer to Quebecor Media(CRTC)20Apr2011-4a)

a) Part a) i)

Provide the company’s best estimates of annual revenues and average monthly revenue per end-user associated with the per end-user rate component broken down by speed tier.

b) Part b) ii)

Provide the company’s best estimate of the annual revenues and average monthly revenue per end-user associated with the additional usage rate components; the  response should provide for each year of the study period, forecast estimates of the aggregated monthly threshold level per TPIA customer and the demand for additional aggregated usage beyond the aggregated threshold value, with supporting assumptions. 

2. Refer to QMI(CRTC)04Feb2011-108

The company submitted that “Ultra High speed tiers are mapped to a specific pool of bandwidth, while non ultra high speed tiers are mapped to a separate pool”.

a) Explain how the mapping of bandwidth to separate pools impact costs.

b) Also, provide the monthly equivalent cost (MEC) associated with each of the two pools.

c) Further provide the breakdown of each of the pool’s MEC into its major cost categories (i.e. segmentation, IP Layer).

3. Refer to the tab “achat accèss” in Quebecor Media (QMI) - CONFIDENTIAL IP Network 14Dec2010 spreadsheet provided in the response to QMI(CRTC)05Feb2011-1006 

a) Provide a detailed description of the costs identified in row 52, columns L, M and N, and explain with supporting rationale why these costs are causal to the TPIA service.

b) For each speed tier, using the format of Tables 1 to 8 in the company’s updated Economic Evaluation revised 14 December 2010, provide the proposed revised costs and rates excluding the costs identified in part a) above.

4. Refer to Quebecor Media(CRTC)20Apr2011-1

The company proposed revised monthly access rates and usage driven rates for each speed tier, assuming that access rate component was defined to strictly recover non-usage driven costs and the usage driven rate component was defined to recover usage driven costs.

a) Propose revised rate per GB usage that is applicable to all speed tiers and describe how this rate is determined with supporting rationale.

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

Assume that the access rate component is defined to recover all costs incremental costs associated with the equipment/facilities between the customer premises and the CMTS (including node segmentation costs and the CMTS costs), and that the traffic rate component recovers the remaining incremental costs (i.e. all incremental costs associated with the equipment/facilities between the CMTS and the aggregated POI).

a) Using the format of Tables 1 to 8 in the company’s Economic Evaluation revised 14 December 2010, provide a breakdown of the proposed costs under the above noted definitions into the following:

i. the proposed per end-user access incremental costs for each speed tier, and;

ii. the proposed incremental traffic cost applicable to all speed tiers, expressed on a per GB basis.

The response should include a description of how these costs are calculated with supporting rationale.

b) Provide the proposed revised cost-based monthly access rate for each speed tier, based on the revised access costs provided in response to part a) above.

c) Provide the proposed revised cost-based rate per GB, based on the revised traffic costs provided in response to part a) above (to be applied to the ISP’s total monthly aggregated usage).

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

Assume that the access rate component is defined to recover all incremental costs associated with the equipment/facilities between the customer premises and the CMTS (including node segmentation costs and the CMTS costs), and that the traffic rate component recovers the remaining incremental costs (i.e. all incremental costs associated with the equipment/facilities between the CMTS and the aggregated POI).

a) Using the format of Tables 1 to 8 in the company’s Economic Evaluation revised 14 December 2010, provide the proposed traffic costs applicable to all speed tiers, expressed on a peak period Kbps basis (at the 95th percentile proposed by CNOC, or the company’s proposed peak period Kbps) under the above noted traffic rate component definition. The response should include a description of how these incremental costs are calculated with supporting rationale and identify the peak period approach used.

b) Provide the proposed revised cost-based rate per peak period Kbps, based on the revised incremental traffic costs provided in response to part a) above (to be applied to the ISP’s peak period Kbps at the network interface during the month), with supporting assumptions and rationale.

c) In response to Cable carriers(CRTC)20Apr11-3 d), the cable carriers indicated that the proposed CNOC peak period pricing methodology focused on solely on the peak for the ISP rather than the peak for the Cable carrier’s network and would not be able to capture congestion on the cable carrier’s network nor the appropriate incremental (causal) costs. Explain if and how the company’s proposed peak period Kbps rate recovers the causal costs associated with the competitor’s use of the cable carrier’s network. If not, explain why not.

d) Provide the company’s best estimates of the development costs and the PWAC associated with the introduction of peak period pricing as proposed in b) above. Further provide an estimate of the PWAC on a per unit basis by using the present worth of the number of ISP end-users over the10 year study period (2011-2020).

Rogers

1. Refer to Rogers(CRTC)20Apr11-4

a) Refer to Part a) i)

i. For each of the years 2011 to 2020, provide the company’s estimate of the breakdown of the TPIA demand forecast into Ultra Lite, Lite, Express, Extreme, Extreme Plus and Ultimate speeds.

ii. For each speed and 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, using the demand forecast provided in response to part i) above. The response should identify the rates used to estimate the revenue information.

b) Refer to Part b) ii)

i. Provide the company’s best estimate of the annual revenues and average monthly revenue per end-user associated with the additional usage rate components; the response should provide for each year of the study period, forecast estimates of the aggregated monthly threshold level per TPIA customer and the demand for additional aggregated usage beyond the aggregated threshold value, with supporting assumptions. 

2. Refer to the format of Tables 1 to 18 in the company’s revised 24 May 2011 Economic Evaluation

Provide revised proposed costs and rates for each of the following change in assumptions:

a) Increase the volume trigger for downstream segmentation per 6MHz channel (in GB)  identified in response to Rogers(CRTC)15Sept10-105 a) ii) by 10%

b) Calculate and provide the average of the daily channel volumes associated with observations (used to produce Attachment 2 of the response to Rogers(CRTC)5April11-1003) that have a corresponding % Throughput Utilization that exceed the throughput utilization threshold (where the throughput speed begins to deteriorate). Use this value as the volume trigger for downstream segmentation per 6 MHz channel (in GB). Further comment on the applicability of deriving the volume trigger as explained above.

3. Refer to Rogers(CRTC)20Apr11-1

The company proposed revised monthly access rates and usage driven rates for each speed tier, assuming that access rate component was defined to strictly recover non-usage driven costs and the usage driven rate component was defined to recover usage driven costs.

a) Propose revised rate per GB usage that is applicable to all speed tiers and describe how this rate is determined with supporting rationale.

4. Refer to the TPIA monthly per end-user costs and rates proposed in the company’s 24 May 2011 Economic Evaluation.

Assume that the access rate component is defined to recover all costs incremental costs associated with the equipment/facilities between the customer premises and the CMTS (including node segmentation costs and the CMTS costs), and that the traffic rate component recovers the remaining incremental costs (i.e. all incremental costs associated with the equipment/facilities between the CMTS and the aggregated POI.

a) Using the format of Tables 1 to 18 in the company’s revised 24 May 2011Economic Evaluation, provide a breakdown of the proposed costs under the above noted definitions into the following:

i. the proposed per end-user access incremental costs for each speed tier; and

ii. the proposed incremental traffic cost applicable to all speed tiers, expressed on a per GB basis.

The response should include a description of how these costs are calculated with supporting rationale.

b) Provide the proposed revised cost-based monthly access rate for each speed tier, based on the revised access costs provided in response to part a) above.

c) Provide the proposed revised cost-based rate per GB, based on the revised traffic costs provided in response to part a) above (to be applied to the ISP’s total monthly aggregated usage).

5. Refer to the TPIA monthly per end-user costs and rates proposed in the company’s 24 May 2011 Economic Evaluation.

Assume that the access rate component is defined to recover all incremental costs associated with the equipment/facilities between the customer premises and the CMTS (including node segmentation costs and the CMTS costs), and that the traffic rate component recovers the remaining incremental costs (i.e. all incremental costs associated with the equipment/facilities between the CMTS and the aggregated POI.

a) Using the format of Tables 1 to 18 in the company’s revised 24 May 2011 Economic Evaluation, provide the proposed traffic costs applicable to all speed tiers, expressed on a peak period Kbps basis (at the 95th percentile proposed by CNOC, or the company’s proposed peak period Kbps) under the above noted traffic rate component definition. The response should include a description of how these incremental costs are calculated with supporting rationale and identify the peak period approach used.

b) Provide the proposed revised cost-based rate per peak period Kbps based on the revised incremental traffic costs provided in response to part a) above (to be applied to the ISP’s peak period Kbps at the network interface during the month), with supporting assumptions and rationale.

c) In response to Cable carriers(CRTC)20Apr11-3 d), the cable carriers indicated that the proposed CNOC peak period pricing methodology focused on solely on the peak for the ISP rather than the peak for the Cable carrier’s network and would not be able to capture congestion on the cable carrier’s network nor the appropriate incremental (causal) costs. Explain if and how the company’s proposed peak period Kbps rate recovers the causal costs associated with the competitor’s use of the cable carrier’s network. If not, explain why not.

d) Provide the company’s best estimates of the development costs and the PWAC associated with the introduction of peak period pricing as proposed in b) above. Further, provide an estimate of the PWAC on a per unit basis by using the present worth of the number of ISP end-users over the 10 years study period (2011-2020).

Shaw

1. Refer to the 10 December 2010 submission regarding the company’s proposed per end-user model.

a)For each of the years 2011 to 2020, provide the company’s best estimate of the breakdown of the TPIA demand forecast into Lite, Regular, Xtreme, Warp and Nitro speeds.

b) For each speed and 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, using the demand forecast provided in response to part a) above.  The response should identify the rates used to estimate the revenue information.

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Date modified:

2011-06-13